Acrophyte Hospitality Trust (ACRO-HT) reported net property income of US$16.9 million for the six months ended Jun 30, 2026, down 6.1% year-on-year as weather-related cost surges and a smaller portfolio offset steady underlying demand. Revenue slipped 2.6% to US$76.1 million, mainly because the divestment of two hotels trimmed available rooms by 4.8%.

The stapled group did not declare an interim distribution, after the boards of its two Managers approved a suspension of payouts from 1H 2026 through at least 2H 2028 to conserve cash for mandatory refurbishments and debt refinancing. The gross operating profit fell 5.9% to US$25.1 million, with the GOP margin easing to 33.0% from 34.2%. NPI margin narrowed to 22.2% from 23.1% a year earlier.

Same-store revenue inched up 0.4% YoY, reflecting resilient demand in the United States lodging market, where first-half occupancy gained 0.9% and average daily rate rose 3.8%. Nonetheless, higher utility and insurance expenses tied to severe winter storms, renovation-related disruptions at four properties, and elevated interest costs weighed on overall profitability. The portfolio stood at 31 hotels with 4,064 rooms across 16 U.S. states, compared with 33 hotels and 4,315 rooms a year ago.

ACRO-HT faces about US$100 million of brand-mandated and maintenance capital expenditure between FY2025 and FY2027. After spending US$30.5 million last year, it expects a further US$26.6 million in FY2026 and roughly US$45 million in FY2027, costs that have risen because of more expensive imported materials and tighter labour markets.

To fund these outlays, the Managers have raised the reserve for furniture, fittings and equipment to 6% of revenue, retained 10% of distributable income since FY2024 and pursued asset sales. Even so, leverage has climbed to about 43.2%, near the regulatory ceiling, limiting additional debt capacity. Challenging market conditions have also curbed disposal proceeds, while U.S. REIT tax constraints and dilution concerns restrict equity fundraising.

The Managers said they will continue to explore non-core divestments and redeploy capital into refurbishment projects aimed at safeguarding long-term competitiveness. As at end-June, ACRO-HT held US$26.0 million in cash, of which US$4.5 million was earmarked for hotel operations.

Chief executive officer James Sung Jung noted that the first-half performance reflected both the loss of income from the two hotels sold and persistent cost inflation. He added that the trust’s immediate priority is to conserve liquidity, finalise loan extensions and execute required renovations, after which distributions could resume if market conditions improve ahead of the current 2H 2028 target.