Apple Hospitality REIT, Inc. (APLE) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary reflects a positive sentiment with strong financial performance, disciplined expense management, and optimistic guidance regarding government demand and World Cup bookings. The Q&A section supports this with management's conservative approach and potential upside from events not fully reflected in guidance. The company's strategic focus on asset management and shareholder returns further bolsters the positive outlook. Given the market cap, a positive stock price movement of 2% to 8% is expected over the next two weeks.
Key Financial Performance
Comparable Hotels RevPAR $115, up 2.2% year-over-year. Growth attributed to strengthening business and leisure demand, despite challenging comparisons to wildfire-related recovery business in early 2025.
ADR (Average Daily Rate) $157, up 0.1% year-over-year. Growth driven by positive ADR trends in March, with weekday ADR up 1.4% and weekend ADR up 3.5%.
Occupancy 73%, an increase of 2.1% year-over-year. Growth supported by broad-based demand strength across the portfolio.
Comparable Hotels Total Revenue $337 million, up 4.3% year-over-year. Growth supported by continued strength in other revenues, which were up 10%.
Comparable Hotels Adjusted Hotel EBITDA $108 million, up 3.6% year-over-year. Growth driven by efficient operating models and disciplined expense management.
Adjusted Hotel EBITDA Margin 32.2%, a reduction of just 20 basis points year-over-year. Results reflect ongoing ramp of recently opened hotels and seasonal impacts.
Same-Store RevPAR Grew by 2.8% year-over-year. Growth supported by strong top-line growth and disciplined cost management.
Same-Store Total Revenue Grew by 3.1% year-over-year. Growth supported by continued strength in non-room revenues, which grew 6%.
Same-Store Adjusted Hotel EBITDA Grew by 4.2% year-over-year. Growth driven by strong top-line growth and disciplined cost management.
Same-Store Adjusted Hotel EBITDA Margin Expanded by 30 basis points year-over-year. Growth attributed to disciplined cost management and strong top-line growth.
Capital Expenditures $27.5 million for the quarter. Investments focused on maintaining competitiveness and value proposition of hotels.
Distributions to Shareholders $57 million or $0.24 per common share for the quarter. Represents an annualized yield of approximately 7.2%.
Adjusted EBITDAre Approximately $101 million, up 2.2% year-over-year. Growth supported by strong portfolio performance and disciplined expense management.
Modified Funds From Operations (MFFO) Approximately $80 million or $0.34 per share, up 1.9% year-over-year. Growth supported by strong portfolio performance.
Total Debt Outstanding Approximately $1.6 billion as of March 31, 2026, with a weighted average interest rate of 4.6% and a weighted average maturity of approximately 3 years.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New Hotel Developments: Forward contracts for two projects in early stages of development: an AC in Anchorage, Alaska (expected delivery in late 2027) and a dual-brand AC and Residence Inn in Las Vegas (expected completion in Q2 2028).
Recent Acquisitions: Embassy Suites in Madison, Wisconsin, AC Hotel in Washington, D.C., Nashville Motto, and Homewood Suites Tampa-Brandon have shown strong performance. Nashville Motto received Hilton's New Build of the Year Award.
Market Diversification: Portfolio includes 216 hotels with nearly 30,000 guest rooms across 83 markets in 37 states and D.C. 57% of hotels have no new upper upscale or upper mid-scale product under construction within a 5-mile radius.
Market Performance: Top-performing markets include Pittsburgh (+23% RevPAR), Alaska (+21%), Seattle (+18%), Palm Beach (+16%), and Memphis (+14%).
Operational Efficiency: Efficient operating models and disciplined expense management led to strong flow-through from top-line growth to bottom-line results. Same-store adjusted hotel EBITDA grew by 4.2% with a 30 basis point margin expansion.
Expense Management: Total hotel expenses grew 2.6%, with reduced reliance on contract labor and favorable property insurance renewals.
Capital Allocation: Completed sale of Hampton Inn & Suites in Rochester, Minnesota for $9 million. Proceeds to be reinvested for enhanced shareholder returns.
Portfolio Reinvestment: Planned reinvestment of $80-$90 million in 2026, including major renovations at 21 hotels.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Geopolitical and Economic Uncertainty: The ongoing conflict in the Middle East and its effects on global energy markets contribute to an uncertain geopolitical and economic backdrop, which could impact demand and operational stability.
Market-Specific Challenges: Certain markets faced challenging year-over-year comparisons, such as wildfire-related recovery business in California and reduced government travel in Washington, D.C., which could affect revenue consistency.
Debt Maturities and Interest Rates: Scheduled debt maturities in 2026 and a weighted average interest rate of 4.6% could pose financial risks if refinancing terms are unfavorable or if interest rates rise.
Construction and Development Risks: Forward contracts for projects in Anchorage and Las Vegas are in early stages, with potential delays or cost overruns impacting future returns.
Operational Transition Risks: The transition of 13 Marriott-managed hotels to franchise management could lead to short-term disruption and transition expenses, potentially affecting operational performance.
Economic Sensitivity: The company acknowledges economic and geopolitical uncertainty, which could impact consumer demand and overall financial performance.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
RevPAR Guidance: The company has raised its full-year RevPAR guidance by 100 basis points to 1% at the midpoint, reflecting confidence in demand momentum and favorable year-over-year comparisons.
Future Demand Trends: Demand momentum has continued into the second quarter, with preliminary April reports indicating comparable hotels RevPAR growth of over 4%. Early summer performance may benefit from incremental leisure travel tied to the FIFA World Cup.
Capital Expenditures: For the full year, the company expects to reinvest between $80 million and $90 million, including major renovations planned at 21 hotels.
Development Projects: The company has forward contracts for two projects: an AC in Anchorage, Alaska, expected to be delivered in late 2027, and a dual-brand AC and Residence Inn in Las Vegas, expected to be completed in Q2 2028.
Expense Management: Total hotel expenses are expected to increase by approximately 3% at the midpoint for the full year, with a favorable property insurance renewal generating incremental monthly savings.
Financial Projections: For the full year, net income is projected to be between $143 million and $169 million, adjusted EBITDAre between $436 million and $458 million, and comparable hotels adjusted hotel EBITDA margin between 32.9% and 33.9%.
Market Conditions: The company acknowledges economic and geopolitical uncertainties but remains confident in the resilience of travel demand and the strength of its portfolio.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Monthly Distributions: During the first quarter, the company paid distributions totaling approximately $57 million or $0.24 per common share. Based on Friday's closing stock price, the annualized regular monthly cash distribution of $0.96 per share represents an annual yield of approximately 7.2%.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Does the margin guidance assume RevPAR growth is driven entirely by occupancy or a composition of occupancy and ADR?
A:The margin guidance assumes a balance between occupancy and ADR for the remainder of the year, similar to what was anticipated at the beginning of the year. However, if trends continue and demand improves, there is potential to drive more rate growth.
Q:What is the company's perspective on price sensitivity among consumers and potential macro risks?
A:The company is not currently seeing significant price sensitivity among customers. They have taken a conservative approach to guidance, assuming limited growth in occupancy or rate. They anticipate growth during higher occupancy months will come from rate increases, which will drive incremental margins.
Q:Can you elaborate on the potential upside from government demand and World Cup leisure demand?
A:The company is encouraged by the improvement in government demand, which has shown a 13% improvement in mix. They are optimistic about continued strength in government demand throughout the year. Regarding the World Cup, strong bookings have been observed, especially in smaller markets, but the current guidance does not include potential upside from this event.
Q:What insights can you provide about World Cup bookings and their impact on demand?
A:Most current bookings are domestic, with a small percentage being international. The company anticipates domestic bookings will remain the primary driver, with any uptick in international bookings being incremental.
Q:What are the forward booking trends, and how do they align with guidance?
A:Forward booking trends show improvements in occupancy and rate within a 90-day window, including positive impacts from advanced World Cup bookings. However, these trends are not fully reflected in the conservative guidance.
Q:What is the company's view on the transaction market and acquisition activity?
A:The company sees improving fundamentals and increased interest in the transaction market. However, there is a gap between seller expectations and what the company is willing to pay. They prioritize acquisitions that compare favorably to alternative uses of capital, such as share repurchases.
Q:Can you quantify the insurance savings and discuss expense trends?
A:The property insurance renewal is expected to result in a $900,000 improvement to forward guidance for the last three quarters. Expense trends are steady, with properties operating under good cost control. The company has factored in these trends into their guidance.
Q:What is the company's approach to potential asset sales and buyer interest?
A:The company continually tests the market for potential dispositions and has seen increased buyer interest. They prioritize assets for potential sale and are prepared to act quickly if the market becomes more active.
Q:What are the company's expectations for consumer travel to unique events?
A:Early indications suggest positive consumer travel trends to unique events, with strong demand observed in markets hosting such events.
Q:What is the company's stance on development takeout transactions?
A:The company has a limited appetite for new development, targeting within $100 million annually. They currently have no pending deals in this area and are focused on existing assets and shares for capital allocation.
Q:What are the early operating trends for the formerly Marriott-managed hotels?
A:The transition of the 13 formerly Marriott-managed hotels has been positive, with new managers driving improvements. However, there were transition-related expenses and some disappointment with prior sales efforts by Marriott management.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the percentage of overall EBITDA represented by the 13 formerly Marriott-managed hotels, stating they would need to follow up with the exact figure.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AC Anchorage
AC Residence
Alaska brand
Award Motto
Brandon yield
Build Award
Columbia Travel
Construction Las
Cup period
DOGE Liberation
Day uncertainty
Demand momentum
Director
District Columbia
East effect
Hilton New
Inn transaction
Instructions conference
Las Vegas
Middle East
Minnesota sale
Motto brand
New Build
Reconciliations Vice
Relations addition
Residence Inn
RevPAR comparison
brand AC
confidence
house
portfolio hotel
room hotel
shareholder
summer
APLE Transcript
Apple Hospitality REIT, Inc. (APLE) Q1 2026 Earnings Call Transcript
Positive5-5
The earnings call summary reflects a positive sentiment with strong financial performance, disciplined expense management, and optimistic guidance regarding government demand and World Cup bookings. The Q&A section supports this with management's conservative approach and potential upside from events not fully reflected in guidance. The company's strategic focus on asset management and shareholder returns further bolsters the positive outlook. Given the market cap, a positive stock price movement of 2% to 8% is expected over the next two weeks.
Apple Hospitality REIT, Inc. (APLE) Q4 2025 Earnings Call Transcript
Unknown2-24
The earnings call summary reveals weak RevPAR guidance and no immediate benefits from Marriott transitions. The Q&A section highlights concerns about unclear management responses on FIFA World Cup impacts and Marriott transitions. Despite optimistic future benefits, current financial metrics and guidance adjustments suggest a negative sentiment. The market cap indicates a moderate reaction, leading to a predicted stock price movement of -2% to -8% over the next two weeks.
Apple Hospitality REIT, Inc. (APLE) Q3 2025 Earnings Call Transcript
Unknown11-4
The earnings call reveals a mix of positive and negative elements. The guidance downgrade due to macroeconomic uncertainties and government shutdown impacts, coupled with increased expenses, suggest potential challenges. Although there are strategic developments and optimistic market dynamics, these are overshadowed by the negative financial outlook and lack of clear guidance. The market cap suggests a moderate reaction, leading to a prediction of a negative stock price movement.
Apple Hospitality REIT, Inc. (APLE) Q2 2025 Earnings Call Transcript
Unknown8-8
The earnings call summary presents a mixed picture. Financial performance is stable but not exceptional, with RevPAR expected to decline in Q3 before improving in Q4. The guidance is slightly weak, and expenses are rising. However, the company is optimistic about market opportunities and has strategic plans in place. The Q&A reveals cautious optimism, with management acknowledging some market weaknesses but also highlighting potential growth areas. Overall, the sentiment is balanced, leading to a neutral stock price prediction.
APLE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
