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    APLE
    Earnings call· Dec 2025(Q4 FY25)

    Apple Hospitality REIT Q4 FY25 earnings call APLE

    Feb 24, 2026 Source

    Executive summary

    Apple Hospitality REIT Q4 FY25 — Strategic Capital Allocation and Portfolio Optimization

    Apple Hospitality REIT navigated a challenging 2025 by strategically optimizing its portfolio through dispositions and share repurchases, while maintaining strong cost controls and an industry-leading EBITDA margin. The company's forward guidance for 2026 anticipates flat comparable RevPAR, reflecting a measured base case despite potential tailwinds from easier comparisons and the FIFA World Cup, as it continues to adapt dynamically to market conditions.

    Highlights

    5

    • Comparable hotels EBITDA margin was 31.1% for Q4 FY25 and 34.3% for FY25, demonstrating industry-leading profitability.

    • Successfully completed the transition of 13 Marriott-managed hotels to franchise, enhancing operational flexibility and marketability.

    • Sold 7 hotels for approximately $73 million, repurchasing 4.6 million common shares for $58 million at an attractive spread.

    • Four of six hotels purchased in 2023 achieved yields in excess of 10% in FY25.

    • Total hotel expenses increased by only 1% in Q4 FY25 and 1.9% for FY25, reflecting effective cost control.

    Concerns

    5

    • Comparable hotels RevPAR declined by 2.6% in Q4 FY25 and 1.6% for FY25, impacted by policy uncertainty and government travel pullback.

    • Comparable hotels adjusted hotel EBITDA decreased by 8% in Q4 FY25 and 6% for FY25 compared to prior year.

    • MFFO per share decreased by 3.1% to $0.31 in Q4 FY25 and 5.6% to $1.52 for FY25.

    • January 2026 comparable hotels RevPAR declined by approximately 1.5% due to challenging comps and winter storms.

    • Fixed expenses remained a headwind with 7% growth in Q4 FY25.

    Guidance & targets

    6
    CategoryTargetConfidence
    Net Income
    $133 million to $160 million
    high materiality
    Medium
    Comparable Hotels RevPAR Change
    negative 1% and positive 1%
    high materiality
    Medium
    Comparable Hotels Adjusted Hotel EBITDA Margin
    32.4% and 33.4%
    medium materiality
    Medium
    Adjusted EBITDAre
    $424 million and $447 million
    high materiality
    Medium
    Total Hotel Expenses Increase
    approximately 3% at the midpoint
    medium materiality
    Medium
    Capital Expenditures
    $80 million and $90 million
    medium materiality
    High

    Operational metrics

    81
    Comparable Hotels EBITDA
    $99 million
    Q4 FY25

    Comparable hotels EBITDA for the fourth quarter.

    Comparable Hotels EBITDA
    $474 million
    FY25

    Comparable hotels EBITDA for the full year.

    Comparable Hotels EBITDA Margin
    31.1%
    Q4 FY25

    Industry-leading comparable hotels EBITDA margin for the fourth quarter.

    Comparable Hotels EBITDA Margin
    34.3%
    FY25

    Industry-leading comparable hotels EBITDA margin for the full year.

    Shares Repurchased
    4.6 million
    FY25

    Common shares repurchased during the year.

    Share Repurchase Value
    $58 million
    FY25

    Total value of shares repurchased.

    Share Repurchase Spread vs Dispositions
    2.4 turn
    FY25

    Spread to dispositions completed during the year.

    Share Repurchase EBITDA Multiple Spread vs Dispositions
    6.5 turn
    FY25

    EBITDA multiple spread after considering brand-mandated capital investments.

    Disposition Cap Rate
    6.5%
    FY25

    Blended cap rate for the 7 hotels sold in 2025.

    Disposition EBITDA Multiple (before CapEx)
    12.4x
    FY25

    EBITDA multiple for the 7 hotels sold in 2025 before CapEx.

    Disposition Cap Rate (after estimated CapEx)
    4.9%
    FY25

    Cap rate for the 7 hotels sold in 2025 after estimated $24 million in anticipated capital improvements.

    Disposition EBITDA Multiple (after estimated CapEx)
    16.5x
    FY25

    EBITDA multiple for the 7 hotels sold in 2025 after estimated $24 million in anticipated capital improvements.

    Yields on 2023 Acquisitions
    >10%
    FY25

    Four of the six hotels purchased in 2023 achieved yields in excess of 10% last year.

    Annual CapEx Spend as % of Total Revenue
    5% to 6%
    historical

    Historical annual CapEx spend relative to total revenue.

    Capital Expenditures
    $88 million
    FY25

    Total capital expenditures for the year ended December 31, 2025.

    Distributions Paid
    $57 million
    Q4 FY25

    Total distributions paid during the fourth quarter.

    Dividend Per Share
    $0.24
    Q4 FY25

    Per common share distribution for the fourth quarter.

    Distributions Paid
    $240 million
    FY25

    Total distributions paid for the full year.

    Dividend Per Share
    $1.01
    FY25

    Per common share distribution for the full year.

    Annualized Regular Monthly Cash Distribution Yield
    7.8%
    annualized

    Based on Friday's closing stock price.

    Comparable Hotels Total Revenue
    $319 milliondown approximately 2%
    Q4 FY25

    Comparable hotels total revenue for the quarter.

    Comparable Hotels Total Revenue
    $1.4 billiondown approximately 1%
    FY25

    Comparable hotels total revenue for the full year.

    Comparable Hotels Adjusted Hotel EBITDA
    $99 milliondown approximately 8%
    Q4 FY25

    Comparable hotels adjusted hotel EBITDA for the quarter.

    Comparable Hotels Adjusted Hotel EBITDA
    $474 milliondown approximately 6%
    FY25

    Comparable hotels adjusted hotel EBITDA for the full year.

    ADR
    $152down 90 basis points
    Q4 FY25

    Average Daily Rate for the fourth quarter.

    ADR
    $159down 10 basis points
    FY25

    Average Daily Rate for the full year.

    Occupancy
    70%down 1.7%
    Q4 FY25

    Occupancy for the fourth quarter.

    Occupancy
    74%down 1.6%
    FY25

    Occupancy for the full year.

    STAR Report RevPAR
    $100
    FY25

    Industry RevPAR as reported by STAR.

    STAR Report Occupancy
    62%
    FY25

    Industry average occupancy as reported by STAR.

    Weekday Occupancy
    down 140 basis points
    Q4 FY25

    Weekday occupancy change compared to prior year.

    Weekend Occupancy
    down 50 basis points
    Q4 FY25

    Weekend occupancy change compared to prior year.

    Weekday Occupancy Growth
    up 10 basis points
    December

    Weekday occupancy growth in December after being down around 2% in October and November.

    Weekend Occupancy Growth
    up 90 basis points
    December

    Weekend occupancy growth in December after being down around 1% in October and November.

    Weekday ADR Decline
    down 1%
    Q4 FY25

    Weekday ADR decline for the quarter.

    Weekend ADR
    essentially flat
    Q4 FY25

    Weekend ADR for the quarter.

    Brand.com Bookings
    40%flat year-over-year
    Q4 FY25

    Share of occupancy mix from Brand.com bookings.

    OTA Bookings
    14%up 110 basis points
    Q4 FY25

    Share of occupancy mix from OTA bookings.

    Property Direct Bookings
    25%up 70 basis points
    Q4 FY25

    Share of occupancy mix from Property Direct bookings.

    GDS Bookings
    16%down 80 basis points
    Q4 FY25

    Share of occupancy mix from GDS bookings.

    BAR Segmentation
    33%around flat
    Q4 FY25

    Share of occupancy mix from Best Available Rate.

    Other Discounts Segmentation
    31%grew 30 basis points
    Q4 FY25

    Share of occupancy mix from other discounts.

    Corporate and Local Negotiated Segmentation
    16%declined 150 basis points
    Q4 FY25

    Share of occupancy mix from corporate and local negotiated business.

    Government Segmentation
    4%declined 100 basis points
    Q4 FY25

    Share of occupancy mix from government business.

    Group Business Mix
    15%improved 130 basis points
    Q4 FY25

    Share of occupancy mix from group business.

    Other Revenues Growth
    5%
    Q4 FY25

    Growth in other revenues on a comparable basis during the quarter, driven by parking revenue and cancellation fees.

    Other Revenues Growth
    6%
    YTD FY25

    Growth in other revenues on a comparable basis year-to-date, driven by parking revenue and cancellation fees.

    Comparable Hotels Total Hotel Expenses Increase
    1%
    Q4 FY25

    Increase in comparable hotels total hotel expenses for the fourth quarter.

    Comparable Hotels Total Hotel Expenses Increase
    1.9%
    FY25

    Increase in comparable hotels total hotel expenses for the full year.

    Comparable Hotels Total Hotel Expenses Increase (CPOR basis)
    2.5%
    Q4 FY25

    Increase in comparable hotels total hotel expenses on a CPOR basis for the fourth quarter.

    Comparable Hotels Total Hotel Expenses Increase (CPOR basis)
    3.3%
    FY25

    Increase in comparable hotels total hotel expenses on a CPOR basis for the full year.

    Same-Store Total Hotel Expenses Increase
    1%
    Q4 FY25

    Increase in same-store total hotel expenses for the fourth quarter.

    Same-Store Total Hotel Expenses Increase
    1%
    FY25

    Increase in same-store total hotel expenses for the full year.

    Payroll Per Occupied Room (Same-Store)
    $43up 3.5%
    Q4 FY25

    Total payroll per occupied room for same-store hotels.

    Payroll Per Occupied Room (Same-Store)
    $41up 3%
    FY25

    Total payroll per occupied room for same-store hotels.

    Contract Labor as % of Total Same-Store Wages
    7%down 120 basis points or 14%
    Q4 FY25

    Decrease in contract labor.

    Comparable Hotels Variable Hotel Expenses Increase
    0.5%
    Q4 FY25

    Increase in comparable hotels variable hotel expenses.

    Comparable Hotels Variable Hotel Expenses Increase (Per Occupied Room Basis)
    1.9%
    Q4 FY25

    Increase in comparable hotels variable hotel expenses on a per occupied room basis.

    Comparable Operating Expense Growth
    80 basis points
    Q4 FY25

    Comparable operating expense growth.

    Hotel Administrative Expense Growth
    30 basis points
    Q4 FY25

    Hotel administrative expense growth.

    Sales and Marketing Expenses
    flat
    Q4 FY25

    Sales and marketing expenses were flat.

    Utilities and Repair and Maintenance Expense Growth
    2%
    Q4 FY25

    Utilities and repair and maintenance expense grew slightly higher.

    Fixed Expenses Growth
    7%
    Q4 FY25

    Fixed expenses remained an expected headwind.

    Comparable Hotels Adjusted Hotel EBITDA Margin
    31.1%down 210 basis points
    Q4 FY25

    Comparable hotels adjusted hotel EBITDA margin for the fourth quarter.

    Comparable Hotels Adjusted Hotel EBITDA Margin
    34.3%down 190 basis points
    FY25

    Comparable hotels adjusted hotel EBITDA margin for the full year.

    Adjusted EBITDAre
    $93 milliondown approximately 3.6%
    Q4 FY25

    Adjusted EBITDAre for the quarter.

    Adjusted EBITDAre
    $444 milliondown approximately 5.1%
    FY25

    Adjusted EBITDAre for the full year.

    MFFO
    $73 million
    Q4 FY25

    MFFO for the quarter.

    MFFO Per Share
    $0.31down 3.1%
    Q4 FY25

    MFFO per share for the quarter.

    MFFO
    $361 million
    FY25

    MFFO for the full year.

    MFFO Per Share
    $1.52down 5.6%
    FY25

    MFFO per share for the full year.

    Total Outstanding Debt
    $1.5 billion
    as of 2025-12-31

    Total outstanding debt at year-end.

    Net Debt/Trailing 12 Months EBITDA
    3.4x
    as of 2025-12-31

    Leverage ratio.

    Weighted Average Interest Rate
    4.7%
    as of 2025-12-31

    Weighted average interest rate on debt.

    Weighted Average Debt Maturities
    3 years
    as of 2025-12-31

    Weighted average debt maturities at quarter end.

    Cash on Hand
    $9 million
    as of 2025-12-31

    Cash balance at quarter end.

    Availability Under Revolving Credit Facility
    $587 million
    as of 2025-12-31

    Availability under revolving credit facility at quarter end.

    Fixed or Hedged Debt
    64%
    as of 2025-12-31

    Percentage of total debt outstanding that was fixed or hedged.

    Unencumbered Hotels
    207
    as of 2025-12-31

    Number of unencumbered hotels in the portfolio.

    Same-Store Total Hotel Expense Growth (Midpoint)
    1.6%
    FY26

    Same-store total hotel expense growth at the midpoint of guidance, excluding noise from Hotel 57 and Nashville.

    Benefit from Brand Conferences and Fee Reductions
    $5 million
    FY26

    Net benefit from not having brand conferences in 2026 and fee reductions for brands.

    Industry KPIs

    5
    MetricValueDetails
    Occupancy rate70%%
    Revenue growthdown 1.6%%
    Disposition volume$73 millionUSD
    Net debt adjusted EBITDA3.4xx
    Ffo core ffo normalized ffo per share$0.31USD/share

    Deals & partnerships

    1
    MarriottTransition of 13 Marriott-managed hotels to franchise agreements

    Completed in January 2026, consolidating management with third-party companies already operating hotels in market. Provides additional flexibility and increases marketability of hotels.

    Capital programs

    6
    Homewood Suites Tampa Brandon Acquisitionclosed
    Funding: 1031 exchanges from hotel sales

    Acquisition using 1031 exchanges, adjacent to existing Embassy Suites.

    Motto by Hilton Nashville Downtown Acquisitionclosed

    Acquired in late December upon completion of construction. Ramping nicely.

    AC Hotel Anchorage Developmentunderway
    Start: broken ground

    One of two future hotel development projects with forward commitments.

    Dual Brand AC and Residence Inn Las Vegas Developmentannounced
    Start: not yet begun

    One of two future hotel development projects with forward commitments, adjacent to existing SpringHill Suites.

    Major Renovations (21 hotels)planned$80 million to $90 million
    Period spend: $80 million to $90 million
    Start: FY26

    Planned reinvestment in the portfolio for 2026, including the conversion of Residence Inn Seattle Lake Union.

    Residence Inn Seattle Lake Union Conversion to Homewood Suitesplanned
    Start: Q4 FY26

    Conversion will happen as it reaches the end of its current franchise term, driven by competitive supply dynamics and brand incentives.

    Risks & headwinds

    5
    Policy uncertainty and government travel pullbackFY25, ongoing into FY26

    Midweek occupancy temporarily disrupted; government room nights down ~12% and negotiated down 5-6% in FY25.

    Mitigation: Adjusted strategy to optimize business mix, layering on additional group business; teams have ability to act on existing demand in market.

    Challenging year-over-year comparisonsQ1 FY26

    January 2026 comparable hotels RevPAR declined by approximately 1.5% due to wildfire recovery-related business and presidential inauguration comps from 2025.

    Mitigation: Guidance for 2026 accounts for these challenging comps, with easier comparisons expected in later parts of the year.

    Winter storms and travel disruptionQ1 FY26

    Weighed on January and early February 2026 results.

    Mitigation: Occupancies have improved meaningfully in recent weeks; teams are experienced in navigating shifting market conditions.

    Fixed expenses growthFY25, ongoing

    7% growth in Q4 FY25.

    Mitigation: Offset by strong cost control in variable expenses and overall operational efficiency efforts.

    Macroeconomic headwindsFY25, ongoing

    Comparable hotels adjusted hotel EBITDA down 8% in Q4 FY25 and 6% for FY25.

    Mitigation: Preserving balance sheet to safeguard against potential macroeconomic volatility and protect ability to act quickly on future accretive acquisition opportunities.

    What to watch in Q1 FY26

    5

    Comparable RevPAR Growth

    Q1 FY26
    Currentdown 1.5% in January 2026
    Targetpositive growth

    Why it matters

    To assess if the early year headwinds (weather, challenging comps) are subsiding and if the portfolio is tracking towards its flat RevPAR guidance midpoint.

    Based on preliminary results for the month of January 2026, comparable hotel [indiscernible] declined by approximately 1.5% as compared to January 2025, impacted by travel disruption related to winter weather, challenging comps related to wildfire recovery-related business and the presidential inauguration last year as well as ramp from our Nashville Motto, which opened at the end of December. Performance has improved in February, bringing comparable RevPAR growth slightly positive year-to-date.

    Q&A highlights

    6

    What was the total RevPAR drag in 2025 from Liberation Day and the government shutdown, and how much of that is expected to return as a benefit in 2026?

    Government room nights were down about 12% and negotiated business down 5-6% in 2025, which could represent about 1 point in occupancy if it returns. However, some of the 'Doge' related business may not return, and the team actively replaced this with group business.

    “If you look at room nights for government on a same-store basis for the full year, they were down about 12% and negotiated was down 5% to 6%, which really that trend did not start until Doge and certainly ebbed and flowed throughout the year.”

    asked by Jackson Armstrong · answered by Liz Perkins

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Portfolio Optimization and Capital Allocation

    In 2025, Apple Hospitality REIT executed a disciplined capital allocation strategy, selling 7 hotels for approximately $73 million and repurchasing 4.6 million common shares for $58 million. This strategy capitalized on the stock's implied discount to private market values, with repurchases priced at a 2.4 turn spread to dispositions and a 6.5 turn EBITDA multiple spread after CapEx. The company aims to continue selective dispositions to redeploy proceeds into higher-producing opportunities and manage future CapEx needs.

    02

    Operational Performance and Cost Management

    Despite a challenging backdrop, the company achieved comparable hotels EBITDA of $99 million for Q4 FY25 and $474 million for FY25, with an industry-leading EBITDA margin of 31.1% and 34.3%, respectively. Total hotel expenses increased by only 1% in Q4 and 1.9% for the full year, reflecting effective cost control. Variable expenses increased by 0.5% in Q4, while fixed expenses grew 7%, primarily due to challenging year-over-year comparisons.

    03

    Manager Transition and Flexibility

    Apple Hospitality REIT successfully transitioned 13 Marriott-managed hotels to franchise in January 2026, consolidating management with existing third-party companies. This move is expected to drive incremental operational synergies and cost savings, particularly from overhead allocations. The transition also provides greater flexibility and increases the marketability of these assets for future select dispositions, as they are now unencumbered by brand management.

    04

    Development Pipeline and Future Growth

    The company has forward commitments for two future hotel development projects: a dual-brand AC and Residence Inn in Las Vegas (expected Q2 2028) and an AC in Anchorage, Alaska (expected late 2027). These projects are in early stages, with the Anchorage AC having broken ground. The company does not have any pending acquisitions slated for 2026, focusing instead on optimizing its existing portfolio and leveraging its strong balance sheet for future accretive opportunities.

    05

    Market Dynamics and Demand Shifts

    Leisure travel remained strong in 2025, but policy uncertainty and a pullback in government travel impacted midweek demand, temporarily disrupting occupancy trends. The company's teams adjusted strategies to optimize business mix, layering on additional group business to bolster market share. Preliminary January 2026 RevPAR declined by 1.5% due to challenging comps (wildfire recovery, presidential inauguration) and winter storms, though February showed improved RevPAR growth.

    06

    Capital Expenditures and Portfolio Reinvestment

    Capital expenditures totaled approximately $88 million in 2025. For 2026, the company expects to reinvest between $80 million and $90 million, with major renovations planned for approximately 21 hotels. This includes the conversion of the Residence Inn Seattle Lake Union to a Homewood Suites, expected to be complete in Q2 2027. The historical annual CapEx spend is between 5% and 6% of total revenue, lower than full-service peers, enabling higher free cash flow.

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