American Hotel Income Properties REIT LP (TSX: HOT.UN) (OTCQX: AHOTF) announced today the renewal of six rail crew lodging contracts with its largest railway customer for a term of six years, effective December 1, 2016.
CONTRACT RENEWAL HIGHLIGHTS
- The Contract Renewal encompasses three contracts maturing in 2016 and three contracts maturing in 2017, which cover six Oak Tree Inn hotels with a total of 432 guestrooms, or 11.1% of AHIP’s total rail crew guestrooms.
- The term of the renewed contracts commenced on December 1, 2016 and will expire on November 30, 2022.
- The Contract Renewal increases the weighted average remaining term of AHIP’s rail crew lodging agreements by 18% from 3.9 years to 4.6 years.
Mr. Ian McAuley, President of AHIP commented, “The length of the contract renewals is important as it signifies the vital role which the Oak Tree Inn hotels play in the future business plans of our largest railway customer. The renewed contracts provide for increased daily rates coupled with annual cost of living rate escalators and enhanced diner and transportation subsidies.”
Mr. Rob O’Neill, Chief Executive Officer of AHIP also commented, “The renewal builds on our long standing relationship with our key railway customer and will continue to provide a reliable cash flow stream for our unitholders.”
The Oak Tree Inn hotels covered by the Contract Renewal are managed by Tower Rock Hotels & Resorts Inc., a wholly-owned subsidiary of O’Neill Hotels & Resorts Ltd.
AHIP’s portfolio is currently comprised of 91 hotels totaling 8,156 guestrooms, which includes 46 rail hotels totaling 3,893 guestrooms and 45 branded hotels totaling 4,263 guestrooms.