Apple Hospitality REIT : Operational Update
APLE
FORWARD-LOOKING STATEMENTS
Certain statements made in this presentation are forward-looking statements. These forward-looking statements include statements regarding our intent, belief or current expectations and are based on various assumptions. These statements involve substantial risks and uncertainties. Actual results or events could differ materially from the
plans, intentions and expectations disclosed in the forward-looking statements that we make. Forward-looking statements may include, but are not limited to, statements regarding net asset value and potential trading prices. Words such as "anticipates," "believes," "expects," "estimates," "projects," "plans," "intends," "may," "will," "would," "outlook," "strategy," "targets," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results or outcomes may differ materially from those contemplated by the forward-looking statement. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise any forward-looking statement to reflect changed assumptions or the occurrence of unanticipated events or changes to future operating results, unless required to do so by law. Such factors include, but are not limited to, the ability of Apple Hospitality REIT, Inc. (the "Company," "Apple Hospitality," "Apple" or "APLE") to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism and acts of war; travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the U.S.; inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires; government shutdowns, airline strikes or equipment failures or other disruptions; adverse changes in the real estate and real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; changes in laws or regulations or interpretations of current laws and regulations that impact the Company's business, assets or classification as a real estate investment trust; or other risks detailed in filings made by Apple Hospitality with the Securities and Exchange Commission ("SEC"). Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this presentation will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved.
COVER PHOTO: ALOFT PORTLAND DOWNTOWN WATERFRONT ME
COMPANY PROFILE AND PROVEN INVESTMENT STRATEGY
Apple Hospitality is a publicly traded real estate investment trust that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States.
Scale Ownership of Upscale,
Rooms-Focused Hotels
Industry-Leading Brands and
Operators
Broad Geographic
Diversification
Consistent Reinvestment(1)
Strong, Flexible Balance Sheet(2)
219
HOTELS
29,558
GUEST ROOMS
99%
ROOMS-FOCUSED
15
BRANDS
16
MANAGEMENT COMPANIES
37
STATES
84
MARKETS
5 yrs
AVERAGE EFFECTIVE AGE
4.3
AVERAGE TRIPADVISOR®
RATING
28%
NET TOTAL DEBT
TO TOTAL CAPITALIZATION
75%
OUTSTANDING DEBT EFFECTIVELY FIXED
207
HOTELS UNENCUMBERED
Note: Hotel portfolio statistics as of March 31, 2025. The Company's portfolio also includes one non-hotel property. Market categorization based on STR designation.
(1) Average Effective Age represents years since hotels were built or last renovated. Average actual age of hotels is 16 years. The Tripadvisor® rating is based on lifetime scores for the Apple Hospitality portfolio of hotels through December 31, 2024.
(2) Net Total Debt to Total Capitalization calculation based on (as of December 31, 2024) total debt outstanding, net of cash and cash equivalents ("net total debt outstanding"), divided by net total debt outstanding plus equity market capitalization based on the Company's closing share price of $15.35 and outstanding common shares. Based on hotels owned as of December 31, 2024.
COMPANY OVERVIEW
$1.4 Billion
IN REVENUE
Full Year 2024
$1.61
2024 MFFO PER SHARE(1)
$0.89 Net Income Per Share
$243.7 Million
DISTRIBUTIONS PAID
In 2024
+20.1 ppts
TSR Outperformance vs. MSCI US REIT Index for the 2022-2024 Period
8 Hotels
ACQUIRED SINCE JANUARY 2023
+21.4 ppts
TSR Outperformance vs. Nareit Lodging/Resorts Index for the 2022-2024 Period
EXCHANGE: TICKER
NYSE: APLE
DIVIDEND YIELD at 3/31/2025
7.4% annual yield, annual rate of $0.96 per share, paid monthly
AVERAGE TRADING VOLUME TTM 3/31/2025
2.1 Million shares per day
EQUITY MARKET CAP at 12/31/2024
$3.7 Billion
NET DEBT at 12/31/2024
$1.5 Billion, 28% net total debt outstanding to total capitalization
TOTAL ENTERPRISE VALUE at 12/31/2024
$5.1 Billion
COMPARABLE HOTELS REVENUE(1) TTM 12/31/2024
$1.4 Billion
COMPARABLE HOTELS ADJUSTED HOTEL EBITDA MARGIN(1) TTM 12/31/2024
36.0%
2025 ESTIMATED CAPEX
$80 Million to $90 Million
EXECUTIVE TARGET COMPENSATION STRUCTURE
78% executive target compensation incentive based
(1) See following pages for reconciliation to actual revenue and net income.
Note: Statistics above compare the Company's performance with the performance of specific industry indices using total shareholder return ("TSR"). Net Total Debt to Total Capitalization calculation based on (as of December 31, 2024) total debt outstanding, net of cash and cash equivalents ("net total debt outstanding"), divided by net total debt outstanding plus equity market capitalization based on the Company's closing share price of $15.35 and outstanding common shares.
• Average executive tenure with the Apple REIT Companies is 18 years
• Established and operated 8 public hospitality REITs
• Raised and invested approximately $7.4 billion of equity in hotel assets
• Purchased 456 hotels
• Purchased as many as 74 hotels in a single year through individual hotel and small portfolio transactions
• Managed over $1.2 billion in CapEx and renovation spending
• Sold 4 REITs in 3 transactions totaling $2.7 billion
• Merged 3 REITs and listed Company on NYSE
• Completed $1.3 billion Apple REIT Ten merger
• Representation on over 30 brand and industry advisory boards and councils
MISSION
We are a leading real estate investment company committed to increasing shareholder value through the distribution of attractive dividends and long-term capital appreciation.
VALUES
Hospitality - We are thoughtful in our interactions with others and know that strong, caring relationships are the core of our industry.
Resolve - We are passionate about the work we do and are steadfast in our commitment to our shareholders.
Excellence - We are driven to succeed and improve through innovation and perseverance.
Integrity - We are trustworthy and accountable.
Teamwork - We support and empower one another, embracing diversity of opinion and background.
Concentrate on Upscale, rooms-focused hotels
• Efficient operating model yields higher margins
• Resilient group business
• Scale ownership minimizes relative G&A load and provides fixed cost efficiencies
• Unparalleled access to data and operational expertise
Align with the best brands in the rooms-focused category
• Invested in Marriott®, Hilton® and Hyatt® branded hotels with broad consumer appeal which benefit from strong reservation systems and loyalty programs
Hire industry-leading operators and maximize performance through benchmarking and asset management
• Strong regional and national operators with unique management structure align owner and operator to maximize performance in all market environments
• Analytical data-driven asset management maximizes property-level results
• Strategic revenue management optimizes mix of business and maximizes bottom-line performance
Pursue broad geographic diversification
• Broad geographic diversification reduces portfolio volatility and provides exposure to a wide variety of demand generators
Enhance portfolio through accretive acquisitions, opportunistic dispositions and strategic reinvestment
• Well-maintained portfolio with average effective age of 5 years ensures competitiveness
• Strategic acquisitions and dispositions optimize portfolio for long-term growth
• Prudent capital allocation preserves balance sheet capacity for investments at optimal point in cycle
Maintain a strong, flexible balance sheet
• Strong balance sheet provides security through cycles
• Positioned to pursue accretive opportunities
• Conservative capital structure with staggered maturities lowers capital costs and preserves equity value
Q1 OPERATIONAL UPDATE
• First quarter 2025 Comparable Hotels RevPAR down less than 1% as compared to first quarter 2024, based on preliminary results
• Weather related travel disruption negatively impacted January and February results
• Southern California hotels, which benefitted early in the quarter from wildfire-related recovery, experienced softer demand in the back half of the quarter
• Reduced government travel negatively impacted a number of markets in March
• Heightened macroeconomic uncertainty weighing on travel demand
• Overall occupancy remained strong on an absolute basis with growth in ADR
• The Company remains well positioned
• Select-service hotels franchised with industry-leading brands provide strong value proposition and have proven appeal with broadest group of customers
• Broad geographic diversification provides exposure to wide variety of markets and demand generators
• Limited near-term portfolio impact from new supply
• Data-driven asset management team and industry-leading operators maximize property-level performance
• Well-maintained, institutional-quality portfolio with substantial long-term value
• Strong, flexible balance sheet
7
AC HOTEL LOUISVILLE DOWNTOWN
Rooms-focused operating model produces strong margins
2024 Hotel EBITDA Margin and RevPAR Comparison
36%
36%
35%
APLE (1)
INN CLDT
Upscale/Rooms-Focused
Source: Company filings. Assumptions may vary by company.
HST RLJ
DRHRevPAR
Upper Upscale/Full-Service
(1) See explanation and reconciliation of Adjusted Hotel EBITDA to net income included in subsequent pages.
PK AHT SHO PEB
Upscale & Upper Upscale Combined
XHR
Continued Strength in Comparable Hotels Occupancy
Occupancy
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
80%
79%
81%
78%
78%
78%
80%
+1%
+1%
+3%
+2%
+1%
+1%
+3%
+2%
+1%
+9%
+2%
% Change in Occupancy Compared to Same Period of Prior Year
58%
74%
65%
Jan 2024
Feb 2024
76%
Mar 2024
72%
62%
Apr 2024
70%
70%
70%
66%
50%
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
1/4/25
1/11/25
1/18/25
1/25/25
2/1/25
2/8/25
-3%
Week ended
78%
78%
78%
78%
75%
2/15/25
2/22/25
3/1/25
3/8/25
3/15/25
3/22/25
3/29/25
-1%
-4%
-
-6%
-3%
-3%
+6%
73%
75%
Note: Comparable Hotels is defined as the 219 hotels owned and held for use by the Company as of December 31, 2024, and excludes one non-hotel property. For hotels acquired during the periods noted, the Company has included, as applicable, results of those hotels for periods prior to the Company's ownership, and for dispositions and assets held for sale, results have been excluded for the Company's period of ownership. Results for periods prior to the Company's ownership have not been included in the Company's actual Consolidated Financial Statements and are included only for comparison purposes. Results included for periods prior to the Company's ownership are based on information from the prior owner of each hotel and have not been audited or adjusted.
Source: Weekly data provided by STR for hotels owned by the Company and may differ from actual results achieved.
Leisure Travel Strength Continues
Weekday Weekend
100%
90%
Occupancy
80%
70%
60%
50%
40%
30%
20%
10%
0%
1/4/25
64%
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Monthly Data
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
1/11/25
1/18/25
1/25/25
2/1/25
2/8/25
2/15/25
2/22/25
Weekly Data
3/1/25
Source: Data provided by STR for hotels owned by the Company for the periods noted and may differ from actual results achieved. Weekday occupancy includes Sunday through Thursday nights and weekend occupancy includes Friday and Saturday nights.
3/8/25
3/15/25
3/22/25
3/29/25
10
Disclaimer
Apple Hospitality REIT Inc. published this content on April 07, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 07, 2025 at 13:24 UTC.