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    APLE
    Earnings call· Mar 2026(Q1 FY26)

    Apple Hospitality REIT Q1 FY26 earnings call APLE

    May 5, 2026 Source

    Executive summary

    Apple Hospitality REIT Q1 FY26 — Strong RevPAR Growth and Raised Full-Year Guidance

    Apple Hospitality REIT reported a strong start to the year with robust RevPAR growth and margin expansion, leading to an upward revision of full-year guidance. Despite geopolitical uncertainties and a challenging acquisition market, the diversified portfolio demonstrated resilience, and management remains confident in its operational execution and capital allocation strategy. The company also completed the transition of 13 Marriott-managed hotels to franchise, with initial results being encouraging.

    Highlights

    5

    • Comparable hotels RevPAR grew over 2% despite challenging year-over-year comparisons.

    • Same-store RevPAR grew nearly 3% with 30 basis points of adjusted hotel EBITDA margin expansion.

    • Comparable hotels adjusted hotel EBITDA increased 3.6% to $108 million.

    • Adjusted EBITDAre rose 2.2% to $101 million, and MFFO per share increased 3% to $0.34.

    • Full-year RevPAR guidance was raised by 100 basis points to 1% at the midpoint.

    Concerns

    3

    • The ongoing conflict in the Middle East and its effects on global energy markets add to geopolitical and economic uncertainty.

    • The current transaction environment does not yet support accretive acquisition opportunities relative to the company's cost of capital.

    • ADR trends faced headwinds in January and February due to challenging year-over-year comparisons related to wildfire recovery and inauguration business.

    Guidance & targets

    5
    CategoryTargetConfidence
    Comparable Hotels RevPAR Change
    0% to 2%
    high materiality
    Medium
    Net Income
    $143 million to $169 million
    medium materiality
    Medium
    Comparable Hotels Adjusted Hotel EBITDA Margin
    32.9% to 33.9%
    medium materiality
    Medium
    Adjusted EBITDAre
    $436 million to $458 million
    high materiality
    Medium
    Total Hotel Expenses Increase
    approximately 3%
    low materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Pittsburgh
    RevPAR growth benefited from multiple sporting events and a strong convention calendar.
    		—23%——
    Alaska
    RevPAR growth driven by strong leisure demand, further aided by incremental crew business.
    		—21%——
    Seattle
    RevPAR growth with the return of Boeing production business and additional project-related business at a nearby shipyard.
    		—18%——
    Palm Beach
    RevPAR growth continuing to flourish with both strong leisure and business transient demand.
    		—16%——
    Memphis
    RevPAR growth capturing incremental medical personnel and airline crew business amid increased government demand.
    		—14%——

    Operational metrics

    45
    Adjusted Hotel EBITDA
    $108Mup 3.6%
    Q1 FY26
    Adjusted Hotel EBITDA Margin
    32.2%down 20 bps
    Q1 FY26
    MFFO
    $80Mup 1.9%
    Q1 FY26
    Total Debt Outstanding
    $1.6B
    as of 2026-03-31
    Weighted Average Interest Rate (Debt)
    4.6%
    as of 2026-03-31
    Weighted Average Maturity (Debt)
    3 years
    as of 2026-03-31
    Fixed or Hedged Debt
    63%
    as of 2026-03-31
    Cash on Hand
    $8M
    as of 2026-03-31
    Revolving Credit Facility Availability
    $559M
    as of 2026-03-31
    Unencumbered Hotels
    207
    as of 2026-03-31
    Property Insurance Renewal Savings
    $900,000
    Q2-Q4 FY26

    Assumed improvement to forward guidance for the last three quarters of the year.

    Capital Expenditures
    $27.5M
    Q1 FY26
    Monthly Distributions Paid
    $57M
    Q1 FY26
    Monthly Distributions Per Share
    $0.24
    Q1 FY26
    Annualized Regular Monthly Cash Distribution Per Share
    $0.96
    Annualized

    Based on Friday's closing stock price.

    Total Hotels
    216
    as of Q1 FY26
    Guest Rooms
    30,000
    as of Q1 FY26
    Markets Diversified Across
    83
    as of Q1 FY26
    States Diversified Across
    37
    as of Q1 FY26
    Hotels with No New Upper Upscale/Mid-scale Construction within 5-mile radius
    57%
    as of Q1 FY26
    Comparable Hotels Total Revenue
    $337Mup 4.3%
    Q1 FY26
    Comparable Hotels Other Revenues Growth
    10%
    Q1 FY26
    Same-Store Total Revenue Growth
    3.1%
    Q1 FY26
    Same-Store Non-Room Revenues Growth
    6%
    Q1 FY26
    Same-Store Adjusted Hotel EBITDA Growth
    4.2%
    Q1 FY26
    Same-Store Adjusted Hotel EBITDA Margin Expansion
    30 bps
    Q1 FY26
    Weekday Occupancy Change
    170 bps
    Q1 FY26
    Weekend Occupancy Change
    270 bps
    Q1 FY26
    Weekday ADR Change
    30 bps
    Q1 FY26

    After negative ADR growth in January and February, weekday ADR turned positive in March.

    Weekend ADR Change
    70 bps
    Q1 FY26

    A meaningful positive inflection that contributed to broader RevPAR gains.

    Brand.com Room Nights Mix
    39%up 40 bps year-over-year
    Q1 FY26

    Remained the largest channel.

    OTA Room Nights Mix
    13%up 170 bps year-over-year
    Q1 FY26
    Property Direct Room Nights Mix
    26%declined 90 bps
    Q1 FY26
    GDS Room Nights Mix
    18%declined 90 bps
    Q1 FY26
    BAR Room Night Growth
    120 bps
    Q1 FY26

    Led the way with impressive room night growth, particularly in February and March.

    Other Discounts Room Night Mix
    27%declining 50 bps
    Q1 FY26

    More steady.

    Corporate and Local Negotiated Room Night Mix
    17%declined 130 bps
    Q1 FY26

    Showed steady improvement throughout the quarter and contributed to overall March results.

    Government Room Night Mix
    6%grew 20 bps
    Q1 FY26

    Largely driven by comparisons to disruptions in March 2025.

    Group Business Room Night Mix
    17%improved 30 bps
    Q1 FY26

    Remained strong and provided a strong base that helped grow overall occupancy.

    Same-Store Total Hotel Expenses Growth
    2.6%
    Q1 FY26

    Down slightly to last year on a CPOR basis.

    Same-Store Variable Hotel Expense Per Occupied Room Growth
    0.3%
    Q1 FY26
    Total Payroll Per Occupied Room
    $43up 1%
    Q1 FY26
    Contract Labor as % of Total Same-Store Wages
    <7%down 80 bps or 7% year-over-year
    Q1 FY26

    Reduced reliance on contract labor.

    Non-Payroll Variable Expenses Per Occupied Room Change
    -10 bps
    Q1 FY26
    Fixed Same-Store Hotel Expenses Change
    -1.5%
    Q1 FY26

    Driven by a favorable property insurance comparison and property tax appeals.

    Industry KPIs

    6
    MetricValueDetails
    Occupancy rate73%%
    Revenue growth2.2%%
    Disposition volume$9MUSD
    Net debt adjusted EBITDA3.4xx
    Ffo core ffo normalized ffo per share$0.34USD
    Development pipeline under construction—

    Deals & partnerships

    5
    nullSale of Hampton Inn & Suites in Rochester, Minnesota$9M

    Completed in April of this year.

    nullAcquisition of Embassy Suites in Madison, Wisconsin

    Acquired in 2024.

    nullAcquisition of AC Hotel in Washington, D.C.

    Also acquired in 2024.

    nullAcquisition of Nashville Motto

    Recently received Hilton's New Build of the Year Award for the Motto brand.

    nullAcquisition of Homewood Suites Tampa-Brandon

    Acquired last year.

    Capital programs

    3
    AC Hotel Anchorageunderway
    Start: broken ground

    Forward contract for a project in early stages of development.

    Dual brand AC and Residence Inn Las Vegasannounced
    Start: construction not yet begun

    Forward contract for a project in early stages of development, located adjacent to SpringHill Suites.

    Portfolio Reinvestment and Renovationsunderway$80M-$90M
    Period spend: $27.5M
    Spent to date: $27.5M
    Funding: free cash flow from operations
    Start: FY26

    Benefit: major renovations planned at 21 hotels

    Ensuring hotels remain competitive and maintain strong value proposition for guests.

    Risks & headwinds

    4
    Geopolitical and Economic UncertaintyOngoing

    Ongoing conflict in the Middle East and its effects on global energy markets add to an uncertain geopolitical and economic backdrop.

    Mitigation: Broadly diversified rooms-focused portfolio continues to demonstrate demand resilience.

    Acquisition Market ImbalanceCurrent

    Meaningful gap between seller expectations and what the company would be willing to pay, making accretive opportunities difficult.

    Mitigation: Disciplined capital allocation, focus on maximizing long-term value, and flexibility of balance sheet to act quickly when market conditions shift.

    ADR Headwinds from Challenging ComparisonsQ1 FY26

    Negative ADR growth in January and February due to challenging year-over-year comparisons related to wildfire-related recovery business in early 2025 and the inauguration in D.C.

    Mitigation: Expectation to drive more rate as comps ease and move into seasonally higher occupancy months, leading to stronger flow-through.

    Debt MaturitiesFY26

    Approximately $1.6 billion of total debt outstanding with a weighted average maturity of approximately 3 years, with scheduled debt maturities for this year.

    Mitigation: Conversations are ongoing with unsecured lenders, and the company is confident in addressing maturities on attractive terms.

    What to watch in Q2 FY26

    5

    RevPAR Growth

    Q2 FY26
    CurrentQ1 FY26 comparable hotels RevPAR up 2.2%; April preliminary up >4%
    TargetContinued broad-based demand strength and sustained RevPAR growth

    Why it matters

    Indicates the underlying health of the lodging market and the company's ability to capture demand, potentially exceeding conservative guidance.

    Demand momentum has continued into the second quarter. Preliminary reports for the month of April indicate comparable hotels RevPAR growth of over 4%, supported by continued strength in demand and the benefit of favorable year-over-year comparisons related to the negative effects of DOGE, Liberation Day and the resulting general macroeconomic uncertainty🌐.

    Q&A highlights

    7

    Does margin guidance assume RevPAR growth is driven by occupancy or ADR? What are the flow-through implications if driven by ADR?

    Liz Perkins explained that guidance took a measured approach, primarily incorporating Q1 outperformance. The balance between occupancy and ADR for the remainder of the year is similar to initial expectations, but they anticipate driving more rate as they lap easier comps, which could lead to stronger flow-through.

    “That is not entirely built into the guide. When we look to revise guidance for Q1, we, given how close in proximity it was to when we reported at year-end and the fact that we're still early in the year, took a more measured approach and really, for the most part, exclusively incorporated the outperformance of Q1 and some improvement in April as well.”

    asked by Joshua Friedland · answered by Liz Perkins

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 Performance Highlights

    The company reported a strong first quarter for 2026, with comparable hotels RevPAR increasing 2.2% to $115, driven by a 0.1% rise in ADR to $157 and a 2.1% increase in occupancy to 73%. Performance accelerated through the quarter, with March comparable hotels RevPAR growing 5.8%. On a same-store basis, RevPAR grew 2.8%, leading to a 4.2% increase in adjusted hotel EBITDA and 30 basis points of margin expansion.

    02

    April Preliminary Results and Outlook

    Preliminary results for April indicate comparable hotels RevPAR growth of over 4%, benefiting from continued demand strength and favorable year-over-year comparisons. Management believes the revised full-year RevPAR guidance of 0% to 2% (1% midpoint) could prove conservative, citing stronger-than-anticipated transient📎 demand, potential incremental leisure travel from the FIFA World Cup, and easier comparisons to periods negatively affected by government spending cuts and shutdowns in 2025.

    03

    Portfolio Strategy and Diversification

    Apple Hospitality REIT owns a diversified portfolio of 216 upscale rooms-focused hotels with almost 30,000 guest rooms across 83 markets in 37 states and the District of Columbia. The company emphasizes that historically low supply growth from new hotel construction in its markets materially reduces the overall risk profile, limits potential downside, and enhances potential upside, with 57% of hotels having no new upper upscale or upper mid-scale product under construction within a 5-mile radius.

    04

    Capital Allocation and Reinvestment

    The company maintains a disciplined capital allocation strategy, balancing near- and long-term investments. For 2026, it expects to reinvest between $80 million and $90 million in its portfolio, including major renovations at 21 hotels. Capital expenditures totaled approximately $27.5 million in Q1 FY26. This reinvestment ensures competitiveness and maintains a strong value proposition, with average annual CapEx spend of approximately 6% of revenues.

    05

    Balance Sheet Strength and Liquidity

    As of March 31, 2026, the company had approximately $1.6 billion of total debt outstanding, representing 3.4x its trailing 12-month EBITDA. The debt has a weighted average interest rate of 4.6% and a weighted average maturity of approximately 3 years, with 63% fixed or hedged. The company had $8 million of cash on hand and $559 million of availability under its revolving credit facility, providing meaningful liquidity.

    06

    Marriott-Managed Hotels Transition

    In January 2026, the company completed the transition of 13 Marriott-managed hotels to franchise, consolidating management with third-party companies already operating hotels in those markets. This move is expected to drive incremental operational synergies and enhance the marketability of these hotels for future dispositions. Initial results from these transitions are encouraging.

    AI-generated summary of the company’s earnings call. Not investment advice.