Apple Hospitality (APLE) Q3 2026 Earnings Call Transcript

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DATE

Friday, Nov. 6, 2026

CALL PARTICIPANTS

• vice president. Investor relations – Kelly Campbell Clarke
• chief executive officer – Justin G. Knight
• chief Financial Officer – Elizabeth S. Perkins

TAKEAWAYS

• Comparable Hotels RevPAR — $134, up 7.3% year over year, driven by broad-based demand from business and leisure travelers.
• Adjusted EBITDAre — $140 million, representing 13.3% growth versus the third quarter of 2025.
• MFFO Per Share — $0.50, up 16.3% compared to $0.43 in the prior-year period.
• Comparable Hotels Adjusted Hotel EBITDA Margin — 37.1%, expanding 210 basis points due to disciplined expense management and top-line growth.
• October Preliminary Results — Approximately 10% RevPAR growth, reflecting performance beyond the benefit of comparisons to last year’s government shutdown.
• FY 2026 RevPAR Guidance — 5.1% to 6.1%, with the midpoint raised 35 basis points to 5.6%.
• FY 2026 Margin Guidance — 35.0% to 35.5%, representing a midpoint increase of 105 basis points.
• FY 2026 Adjusted EBITDAre Guidance — $482 million to $493 million, up $23 million at the midpoint from the prior outlook.
• Asset Dispositions — $72 million under contract for five hotels, including properties in Santa Clarita, Davenport, and Sacramento.
• Capital Expenditures — $85 million to $95 million projected for the full year, with $58 million invested through the first nine months.
• Debt and Leverage — $1.5 billion in total debt outstanding, approximately 3 times trailing 12-month EBITDA.
• Total Liquidity — $700 million available under the revolving credit facility and $43 million in cash on hand.
• Weekday Performance — Same-store weekday occupancy grew 3% during the quarter, moderately outpacing weekend growth of 2.6%.
• Segmentation Mix — Group business grew 120 basis points to over 16% of the mix, while discount demand declined 210 basis points.
• Unencumbered Hotels — 210 properties following the repayment of a $49.6 million mortgage loan in October 2026.
• Forward Purchase Contracts — $209.2 million committed for two hotel developments in Anchorage and Las Vegas, scheduled for delivery in late 2027 and Q3 2028.
• Hotel Operating Expenses — 3.7% increase for the quarter, growing at roughly half the rate of revenue.
• Shareholder Distributions — $57 million paid in the third quarter, representing an annual yield of approximately 5.1% based on recent share prices.
• Channel Mix Trends — Brand.com room nights rose 80 basis points to 40% of the mix, while online travel agency volume declined 100 basis points.
• Top Market Performance — RevPAR grew 23% in Anchorage, 16.5% in Washington D.C., and 16% in Chicago due to leisure and citywide event demand.

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RISKS

• Perkins stated, “Utilities and repairs and maintenance were our primary headwinds growing 7.1%, 6.5%, respectively,” noting specific cost pressures during the quarter.
• Knight noted that the company will lap the benefit of the World Cup in host markets during the second quarter of 2027, which management expects to be a “modest headwind.”

SUMMARY

Apple Hospitality REIT, Inc. (APLE +2.67%) reported accelerated RevPAR growth and margin expansion during the third quarter, driven by strengthening midweek business travel and stable leisure demand. Management raised full-year 2026 guidance for revenue, margins, and earnings, citing third-quarter results that exceeded prior expectations and a positive outlook for the fourth quarter. The company continues to recycle capital by selling older assets and targeting newer vintage properties or value-add opportunities in markets with limited new supply. Management stated that the company remains focused on operating efficiency and disciplined capital allocation to drive shareholder value through varying economic cycles.

• Knight stated that 50% of the portfolio has no upper upscale, upscale, or upper midscale product under construction within a five-mile radius.
• Perkins noted that the 13 Marriott-managed hotels transitioned to franchise management in January achieved RevPAR growth of nearly 10%, outpacing the overall portfolio.
• Knight stated, “it would be reasonable to assume… that we would be meaningfully more acquisitive than we have been recently,” given current balance sheet strength.
• Management reported that the shift away from online travel agencies and toward direct brand channels is lowering overall distribution costs.
• Knight indicated that travel trends tend to pick up momentum, and management remains optimistic about business transient demand heading into 2027.
• Perkins reported that business tied to semiconductor manufacturing in Phoenix has begun to improve and is expected to remain strong through the fourth quarter.
• Knight stated, “pricing for the hotels we target has moved closer to our underwriting,” facilitating a more active evaluation of potential deals.

INDUSTRY GLOSSARY

• ADR: Average Daily Rate; a measure of the average rate paid for rooms sold.
• BAR: Best Available Rate; the lowest non-restricted rate available to all guests at a given time.
• EBITDAre: EBITDA for Real Estate; a non-GAAP measure defined by Nareit to evaluate REIT performance.
• GDS: Global Distribution System; a network used by travel agents to book hotel rooms and other travel services.
• MFFO: Modified Funds From Operations; a non-GAAP financial measure used to evaluate the operating performance of a REIT.
• OTA: Online Travel Agency; third-party websites such as Expedia or Booking.com used for hotel reservations.
• RevPAR: Revenue Per Available Room; calculated by multiplying a hotel’s ADR by its occupancy rate.
• SOFR: Secured Overnight Financing Rate; a benchmark interest rate for dollar-denominated derivatives and loans.
• STR: Smith Travel Research; a global hospitality data and analytics company that provides market benchmarking.

Full Conference Call Transcript

Operator: Greetings and welcome to the Apple Hospitality Third Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kelly Campbell Clarke, vice president. Investor relations.

Kelly Campbell Clarke: Thank you.

Operator: You may begin.

Kelly Campbell Clarke: Good morning, and welcome to Apple Hospitality REIT’s Third Quarter 26 Earnings Call. Today’s call is based on the earnings release and Form 10 Q, which we distributed and filed yesterday afternoon. Before we begin, please note that today’s call may include forward looking statements as defined by federal securities laws. These forward looking statements ar

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