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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 11 a.m. ET Chief Executive Officer - Justin G. Knight Chief Financial Officer - Elizabeth S. Perkins Operator: Good morning, and welcome to Apple Hospitality REIT's Second 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 are based on current views and assumptions and as a result are subject to numerous risks, uncertainties, and the outcome of future events that could cause actual results, performance, or achievements to materially differ from those expressed, projected, or implied. Any such forward looking statements are qualified by the risk factors described in our filings with the SEC, including in our 2025 annual on Form 10-K, and speak only as of today. The company undertakes no obligation to publicly update or revise any forward looking statements except as required by law. In addition, non GAAP measures of performance will be discussed during this call. Reconciliations of those measures to GAAP measures and definitions of certain items referred to in our remarks are included in yesterday's earnings release and other filings with the SEC. For a copy of the earnings release or additional information about the company, please visit applehospitalityreit.com. This morning, Justin G. Knight, our chief executive officer, and Elizabeth S. Perkins, our chief financial officer, will provide an overview of our results for the second quarter 26 and an operational outlook for the remainder of the year. Unless otherwise stated, all changes in performance metrics refer to year over year changes for the comparable period. All reference to year to date performance refer to the 6 month period ending 06/30/2026. Following the overview, we will open the call for Q&A. At this time, it is my pleasure to turn the call over to Justin. Justin G. Knight: Good morning, and thank you for joining us today for our second quarter 2020 earnings call. We are pleased to report comparable hotels RevPAR growth of more than 5% for second quarter. Driven by broad based improvements in both business and leisure travel demand. Approximately 3 quarters of our hotels delivered RevPAR growth, up from 2-thirds in the first quarter. The efficient operating model of our hotels combined with prudent management of expenses enabled us to convert approximately 58¢ of each incremental revenue dollar into comparable hotels adjusted hotel EBITDA. That flow through produced 120 basis points of margin expansion and an NFFO of $0.52 per share. An increase of more than 8% Demand momentum has continued into the third quarter with preliminary reports for the month of July indicating comparable hotels RevPAR growth of more than 5.5%. Weekday occupancy improvement outpaced weekend occupancy improvement during the quarter, indicative of strengthening business travel across our portfolio. While the 26 FIFA World Cup drove significant pricing power in our host markets, RevPAR excluding those markets grew nearly 5%. Demonstrating that the improvement we are seeing is broad based and not tied to a temporary catalyst. Reflecting our year to date outperformance and continued strength in forward bookings, we are raising our full year RevPAR growth guidance 25 basis points to 3.25% at the midpoint. And raising our full year comparable hotels adjusted hotel EBITDA margin guidance 75 basis points at the midpoint. To an increase of 25 basis points year over year. Even at the revised midpoint, our outlook implies more modest growth in the second half than we delivered in the first. And we believe it could continue to prove conservative. Transient demand has been stronger than anticipated, and our group business continues to build. Providing strong base business at attractive rates. We also lap periods adversely affected by reduced government travel, and last year's government shutdown, which represents potential upside not fully reflected at the midpoint of our outlook. To date, we have not experienced any adverse impact from the escalation of energy attributable to the ongoing conflict in The Middle East. However, should this begin to impact consumer spending, our hotels offer a value proposition that has historically held up well during periods of economic uncertainty. In July, we completed a series of refinancing that extended our maturities, improved our pricing, increased the capacity of our revolving credit facility, which Liz will address in more detail. Karen together, they leave us with meaningful liquidity, no near term maturities of consequence, and the flexibility to grow when the opportunity is right. Our approach to capital allocation is comparative in nature, with each potential use of capital measured against the alternatives available to us to maximize value for shareholders. In April, we completed the sale of our Hampton Inn and Suites in Rochester, Minnesota for approximately $9 million. The sale price represents a 5% cap rate or 14.5x EBITDA before capital expenditures. And a 4% cap rate or 19.6x EBITDA after taking into consideration an estimated $3 million in anticipated capital improvements. Buyers for these types of assets remain active, though pricing varies meaningfully by a hotel and by market. We continue to evaluate select assets where we believe a sale with the redeployment of proceeds creates more value than continued ownership. The motto Nashville downtown, which recently received Hilton's new build of the year award for the brand, achieved ADR of approximately $243 during the second quarter. A meaningful premium to the Nashville market with occupancy continuing to build as the hotel ramps. At the Homewood Suites Tampa Brandon acquired last year, we recently began a comprehensive renovation that once complete will further strengthen the hotel's competitive position in its market. Turning to our year commitments, we continue to have forward contracts for 2 projects under development. An AC hotel in Anchorage, Alaska, which we expect to be delivered in late 2027, and a dual branded AC and Residence Inn adjacent to our existing SpringHill suite in Las Vegas. Which we expect to be delivered in the second quarter of 2028. Construction is underway on both, and in each case, the developer carries the project under a fixed price forward purchase contract. Our cash outlays occur only at completion. Allowing us to secure newly built, well located assets at a known cost without deploying capital until delivery. Both are markets we know well, Our 2 hotels in Anchorage grew RevPAR nearly percent during the second quarter. Operating at approximately 95% occupancy at an average daily rate of $346. And our SpringHill Suites in Las Vegas has grown RevPAR nearly 5% year to date. Development has been a consistent part of how we grow. Though most markets construction costs continue to rise faster than hotel fundamentals, limiting new projects and keeping industry supply growth near historic lows. To the benefit of the hotels we already own. At quarter end, 55% of our hotels had no new upper upscale, upscale, or upper midscale product under construction. Within a 5 mile radius, which limits potential downside and enhances potential upside. There continues to be a product in the market that would be attractive to us. The primary constraint remains the gap between seller expectation and what we are willing to pay. The gap is narrowed, the current transaction environment does not yet support accretive opportunities relative to our cost of capital. We do not currently have any agreements for acquisitions in 2026. We remain actively engaged, and the flexibility of our balance sheet and our reputation for execution position us to act quickly as conditions change. We also continue to strategically reinvest in our portfolio. Ensuring that our hotels remain competitive within their respective markets, and maintain a strong value proposition for our guests. For the 6 months ended June 30, capital expenditures totaled $40 million. For the full year, we expect to reinvest between $85 million and $95 million, a $5 million increase to our earlier range with comprehensive renovations now planned at 18 hotels. As we refined our plan, we prioritized 2 larger projects, the renovation of our Embassy Suites in Anchorage, 1 of our strongest performing hotels in a market where demand has been exceptional, and the rebranding of our Seattle Residence Inn, which we expect to meaningfully improve its competitive position in that market. We continue to invest across the portfolio at levels that keep our hotels competitive, while weighing our larger investments towards the highest returning assets. At the midpoint of our revised range, reinvestment represents approximately 6% of revenues, consistent with our historical average and supported by the stronger operating performance we have seen this year. The scale of our--the efficient design of our rooms focused hotels and our experienced in house project management team allow us to renovate and maintain our hotels for meaningfully less than full service portfolios, Combined with stronger operating margins, this efficiency translates into exceptional free cash flow. From operations. Which we use to fund shareholder distributions and strategic investments. During the second quarter, we paid distributions totaling $57 million or $0.24 per common share. Based on Monday's closing stock price, our annualized regular monthly cash distribution of $0.96 per share represents an annual yield of approximately 5.8%. Together with our board of directors, we will continue to evaluate these distributions in the context of portfolio performance, capital needs, and other accretive opportunities to create long term shareholder value. Throughout our 26 year history in the lodging industry, have refined our strategy with intention. We invest in high quality hotels that appeal to a broad set of business and leisure customers. We diversify our portfolio across markets, industries, and demand generators. We maintain a strong and flexible balance sheet with low leverage. We reinvest strategically in our portfolio. And we work closely with the experienced management teams who operate our hotels. Together, those principles differentiate our portfolio from our peers. Efficient rooms focused hotels produce strong operating margins and require less capital to maintain. And our lower leverage leaves more of the resulting cash flow available to fund distributions reinvest in our hotels, and pursue growth. Through the first 6 months of the year, NFFO per share grew more than 7% to $0.86, reflecting both the strength of our model and the execution of our teams While we cannot control the broader economic environment, we can control how well our hotels are operated. How prudently we allocate capital, and the integrity with which we conduct our business. Those remain our priorities, and we believe that they are what will create lasting value for our shareholders over time. It is now my pleasure to turn the call over to Liz for additional details on our balance sheet, financial performance during the quarter and outlook for the remainder of the year. Elizabeth S. Perkins: You, Justin, and good morning. Last quarter, we noted that as we moved into seasonally higher occupancy months, and saw greater contribution from rate growth, we would expect stronger flow through to the bottom line. That is what the second quarter delivered. Comparable hotels ADR grew 3.5% driving RevPAR growth that combined with the disciplined expense management we converted into 120 basis points of hotel EBITDA margin expansion, and NFFO of $0.52 per share. For the quarter, comparable hotels RevPAR was $136. up 5.3%. With ADR of $170, up 3.5%, and occupancy of 80.1%. Up 130 basis points. For the 6 months ended June 30, comparable hotels RevPAR was $125. Up 3.8%. With ADR of $164, up 1.9%, and occupancy of 76.5%, up 140 basis points. Comparable hotel's RevPAR grew 4.8% in April 4% in May, and 7% in June, with results for the quarter well ahead of our expectations. World Cup events in our host markets contributed approximately 150 basis points to June RevPAR growth. And approximately 50 basis points to the quarter. Preliminary results for July of more than 5.5% RevPAR growth reflect continued momentum across the portfolio. July also included the balance of World Cup activity. But unlike June, saw minimal contribution from World Cup matches. With our non World Cup markets performing similarly to our host markets. With the tournament concluding mid month, we do not expect any continuing impact for the balance of the quarter. Comparable hotel's total revenue was $402 million for the quarter, and $739 million year to date. Up 6.2% and 5.3% respectively. Supported by continued strength in other revenues, which were up 8% for the quarter and 9% year to date. For the quarter, comparable hotels adjusted hotel EBITDA was $153 million, up 9.7%, with an adjusted hotel EBITDA margin of 38.1%, up 120 basis points. Year to date, comparable hotels adjusted hotel EBITDA was $262 million, up 7.1% with margin of 35.4% up 60 basis points. In January, we completed the transition of our 13 Marriott managed hotels to franchise. Consolidating management with third party operators who, in most cases, were already running hotels for us in those markets. Second quarter results for this group were encouraging with RevPAR growth of over 7% and adjusted hotel EBITDA margin expansion of over 300 basis points. Well ahead of the portfolio overall. These hotels represent approximately 8% of our adjusted hotel EBITDA. That performance reflects significant effort by our asset management team and our new operators. Who managed the transition and moved quickly to integrate these hotels into their existing platforms and market clusters. Performance was broad based across the portfolio. With our top 30 markets growing RevPAR 5%, and all other markets growing 5.9%. Several markets stood out, In our World Cup host markets, RevPAR growth came almost entirely from rate. For example, Kansas City RevPAR grew 17% on ADR growth of 16%. And Fort Worth Arlington RevPAR grew 16% on ADR growth of 14%. Elsewhere, we continue to see healthy demand fundamentals. With occupancy leading RevPAR growth in a number of markets. South Bend RevPAR grew 24% on midweek group demand tied to Notre Dame. Anchorage RevPAR grew 17% on strong leisure demand supplemented by military and airline crew business. Washington, DC grew RevPAR nearly 8% as National Guard deployment compressed the market. St. Louis grew RevPAR 13%, recovering from a softer period last year and aided by group business. And Chicago grew RevPAR 13% on strong leisure trends and continued recovery in midweek demand. Not every market shared in this growth, Phoenix saw RevPAR decreased 5%. With a decline in both occupancy and rate. Driven in part by a pullback in semiconductor related business. That said, we are encouraged by announcements of continued investment in the market and believe this segment's long term fundamentals remain strong. Looking at the portfolio more broadly, same store weekday occupancy improved 240 basis points during the quarter. Outpacing weekend improvement of a 120 basis points. Consistent with the highlighted strength in business demand. That strength was consistent throughout the quarter with weekday occupancy up 280 basis points in April, 310 basis points in May, and up 130 basis points in June. Weekday and weekend ADR each grew approximately 350 basis points in the second quarter. Punctuated by 6% growth in June with the start of FIFA World Cup. Shifting to same store booking channel trends, Brand.com remained our largest channel at 40% of room nights, up 80 basis points year over year, while GDS bookings grew 100 basis points to 18%. OTA bookings were flat at 13% of mix and property direct declined a 140 basis points to 25%. Growth in our GDS bookings reflect continued strength in business travel, while gains in Brand.com support both our lowest distribution cost and some of our highest rated segments. Turning to segmentation. Bar grew 120 basis points to 33% of our occupancy mix while negotiated declined 160 basis points to 15%. With midweek occupancy improvement outpacing weekends, that shift indicates the incremental business travel we captured came largely at retail rates rather than contracted rates. Which supported our rate growth for the quarter. Group grew 60 basis points to 18% of mix. Providing a base of occupancy that supported our ability to drive rate, and remains our second highest rated segment. Government grew 30 basis points nearly 5.5% and discount declined 50 basis points to 28%. Moving to expenses with same store revenue growth of 4.7% operating expenses grew 3.5%. While fixed expenses declined, bringing total same store hotel expenses up 3.3% for the quarter and 3% year to date. Increases of 1.3% and 0.6%, respectively, on a per occupied room basis. That discipline and expense control delivered 80 basis points of adjusted hotel EBITDA margin expansion. Wage growth continued to moderate. With rooms wages up less than 3% or less than 1% per occupied room. Utilities and repair and maintenance were our primary headwinds, growing 9%, 6%, respectively. The decline in fixed expenses reflected the favorable property insurance renewal that took effect in April as well as successful real estate tax appeals. Adjusted EBITDAre was approximately $145 million for the quarter, up 7.5%. And $245 million year to date, up 5.3%. NFFO was $123 million for the quarter or $0.52 per share. up 9% and 8.3% respectively. Year to date, NFFO was approximately $204 million or $0.86 per share up 6.1% or 7.5% respectively. As a reminder, effective January 1, 2026, we began excluding share based compensation expense from adjusted EBITDAre and NFFO. Prior year results have been updated to conform with the current presentation so the growth rates I have referenced are on a consistent basis. Turning to our balance sheet. As of 06/30/2026, we had approximately $1.5 billion of total debt outstanding. Approximately 3.2x our trailing 12 months EBITDA, with a weighted average interest rate of 4.8% and a weighted average maturity of approximately 2 years. Nearly 60% of our total debt was fixed or hedged, and we had approximately $10 million of cash on hand $602 million of availability under our revolving credit facility. During the quarter, we repaid 1 secured mortgage loan for a total of approximately $19 million, bringing the number of unencumbered hotels in our portfolio to 207. In July, subsequent to quarter end, we completed a series of refinancing transactions that further strengthen our balance sheet and position us well for the years ahead. We amended and restated our primary unsecured credit facility. Increasing total capacity from $1.2 billion to approximately $1.3 billion. Extending maturities and generally improving the pricing grid. The facility now consists of a $700 million revolving credit facility maturing in 2030, a $275 million term loan maturing in 2031, and a $300 million term loan maturing in 2032. We also amended and restated our $130 million term loan. Increasing it to $160 million and extending the maturity by 7 years. We conformed the improved pricing on an additional $470 million of term loan, extending those benefits across our capital structure. Taken together, these transactions enhance our financial flexibility Our weighted average debt maturity is nearly 5 years, We have no outstanding revolver balance, and our next significant unsecured maturity is in 2029. We are grateful for the continued support of our bank group throughout this process. The strength of these relationships, and the confidence our lenders have shown in our strategy and in the underlying fundamentals of our business, are a real testament to the quality of our portfolio and platform. As a result, our capital structure gives us considerable flexibility to be opportunistic as we look ahead. Turning to guidance. For the full year, we now expect comparable hotels RevPAR change between 2.25% to 4.25%, Comparable hotels adjusted hotel EBITDA margin between 33.7% to 34.7%, adjusted EBITDAre between $453 million and $476 million and net income between $152 million and $180 million. As a result of the improvement in RevPAR growth expectations, our guidance assumes total hotel expense growth of approximately 4% at the midpoint. On a per occupied room basis, expense growth remains unchanged at 2%. Continuing to reflect the favorable property insurance renewal that took effect in April along with continued moderation in wage growth. The revised guidance range incorporates our stronger than anticipated second quarter performance and an increase in our outlook for the remainder of the year. Driven by improved business and leisure travel demand. We are encouraged by the setup for the remainder of the year given the broad based demand strength across our markets and favorable comparisons to prior periods impacted by government related disruptions. Our outlook is based on our current view, which is limited and does not take into account any unanticipated developments in our business or changes in the operating environment. Nor does it take into account any unannounced hotel acquisitions or dispositions. Growth in both occupancy and rate through the quarter along with continued strength in booking trends, reflects the resilience of travel demand and the specific appeal of our hotels. Our strongest gains came midweek at a portfolio average daily rate of $170. Because rate growth carries higher flow through than occupancy, that mix contributed to margin expansion and cash flow growth that we delivered for the quarter. Our capital allocation decisions have strengthened the portfolio, and our July refinancing extended our maturities and increased our capacity. Together with growing cash flow from operations after capital expenditures, that leaves us with meaningful flexibility to pursue accretive opportunities as they arise. We believe that combination positions us well to navigate changing market conditions and to continue growing cash flow and creating long term value for shareholders. That concludes our prepared remarks, and we will now open the call for questions. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in queue. You may press 2 if you would like to remove before pressing the star keys. 1 moment please while we poll for questions. Our first question is from Ari Klein with BMO Capital Markets. Please go ahead. Ari Klein: Thanks, and good morning. Hoping you could, elaborate a little bit on what you are seeing from BT. And how that continues to trend? It seems like it is been doing pretty well. You know, what are some of the drivers, I guess, behind that? Is it SMB driven or, you know, maybe broader than that? And then you also highlighted group. it is not, I guess, a huge driver for you, just curious what you have been seeing there and what is been driving that. Thank you. Elizabeth S. Perkins: Good morning, Ari. We have been very encouraged by the business transient trends that we have seen really since March. And while we began to see in Q1, some ability to shift the mix of our business outside of negotiated corporate rates into. We really started to see that, continue to amplify in Q2. So if you look at both Brand.com and Bar related business, you can see the improvement there. As I mentioned in my prepared remarks, and through GDS, a channel that is predominantly driven, we saw an increase there, which is the first time we have seen meaningful change in many years. So both of those, I think, are clear indications that we are seeing, you know, both overall demand strength on peak nights where we can compress the hotel and drive business transient into our highest rated segments, but also that we are seeing, you know, the sheer improvement in demand overall. Justin G. Knight: And I would add to that. 1 of the things that we are most excited about is as you look across our portfolio, the growth is widespread. And thinking about how we have assembled our portfolio, we have intentionally looked to create exposure to a variety of different industries. And, you know, I think to see multiple industries contributing to BT business across multiple geographies, I think indicates a trend that we feel good about and continue to feel good about moving into the back half of the year. Ari Klein: Thanks. Was it next part section, Aryeh. Sorry? What was the second part of your question? Oh, just on group. Oh, just on group. What you have been seeing there. Elizabeth S. Perkins: Group, similar to BT, really strong trends. We were at 18% of our occupancy mix for the quarter, which is 1 of our strongest quarters. Historically, we have run more in the 15% to 16% range. it is our second highest rated segment. So, again, not only are we seeing strength there, we see an ability to capture high rates in that segment, which is driving overall RevPAR growth. it is a mix between corporate and leisure. Depending on sort of day of week, stay pattern, and market. So like Justin mentioned, when speaking about overall demand and how broad based it is in a across segments, group also is benefiting from seeing it both on the business transient or the business group side. Remembering ours is more small group, but also on the leisure side. Thanks for that. And then maybe just on expense trends. They seem to be pretty encouraging in terms of what you are seeing I realize it is early, looking ahead to 2027, but just, you know, how should we think about it or the level you are growing at right now from an expense standpoint? Sort of what you would expect next year. Any reason to think it would be, you know, higher or lower at this point? You know, it is a little early to give definitive guidance on 2027, but we have seen fairly consistent performance on the expense side and feel really comfortable that barring any meaningful changes, to the environment overall and that would sort of impact you know, things more broadly than just our portfolio, we would expect similar trends to what we have seen both year to date, but, really, you know, we have seen it especially on the variable cost side, really, really well controlled over the past couple years. Appreciate it. Thanks for the color. Operator: Thank you. Our next question is from Michael Bellisario with JPMorgan. Please go ahead. Analyst: Hi there, and thank you for taking my question. Could you help us further unpack the broad-based demand you are seeing? Is it more so with your higher end travelers or also with the lower end? And then are there any segments that are not as strong? Justin G. Knight: So I will take that. I think looking across our portfolio, it is been broad based. You know, I think an important point of clarification is we do not own economy or even mid scale hotels. So, you know, I think cannot speak based on our own experience to the performance and behaviors of low end travelers. You know, average daily rate was nearly $200 for our portfolio, which I think speaks to the type of travelers staying at our hotels You know, I think looking across markets, you know, that seemed to be the more preeminent driver we have highlighted. Phoenix was down slightly. In terms of industries driving that market, we continue to feel really good about what is happening in that market and feel that will be a market that rebounds. And on the flip side, you have markets like Anchorage, that, have been strong for years that continued to see outsized growth. I think as I said, earlier, what pleased us most about the quarter is we came into it thinking that World Cup would be the primary driver of growth during the quarter if it manifests, remembering that we had been conservative in our guide related to World Cup potential World Cup business. As we emerge from the quarter, we saw you know, the majority of our markets experiencing RevPAR growth. And given the diversity of our exposure, we see that as a broad based positive indicator for the type of business that we attract to our hotels, both business travel and leisure. Thank you. Elizabeth S. Perkins: And as a quick follow-up, you mentioned that upside from lapping the easier government comparisons is not baked into the midpoint of the guide. So I am just wondering, you know, how is that pacing, you know, in the third quarter and the second half? And what are your expectations for government travel? You know, I think we do expect that we would see an improvement in RevPAR relative to the government shutdown in the fourth quarter in particular, our third quarter comp relative to last year is not as significant in the third quarter. We had started to improve and not be down quite as much in government in Q3 as we were in Q2 and obviously Q4 of last year. So we have seen year to date improvement in the government segment, but with the you know, demand across segments that we have seen, we have also been able prioritize higher rated business. So to quantify precisely what government would be if we did not have other, you know, other demand to supplement that or to take from a higher rated segment. You know, I cannot I cannot perfectly ascertain what I think it would have been just you know, without that improvement in overall demand. But for Q4, you know, even at the midpoint, you know, we have some growth in the fourth quarter related to that. But really, when you combine the current trends that we are seeing, with the lapse in government comps, you know, you see that more baked in at the high end of our range. Thank you. Operator: Our next question is from Rich Hightower with Barclays. Please go ahead. Rich Hightower: Hey. Good morning, guys. So, Justin, I know you talked about this a little bit in the prepared comments, but I am wondering about the prospect to accelerate or kind of increase some of these development property forward purchase deals? And then kind of as an offshoot to that question, when you think about the different, you know, the moving parts to getting a development deal done, whether it is, you know, the equity part of the capital stack, the debt part, or just simply operating fundamentals. Keeping up with construction costs, where do you see the biggest gap today? And how long do you think it would take to sort of you know, plug that gap to see new construction again broadly? Justin G. Knight: I appreciate the question. We are incredibly excited about the 3 hotels, the 2 development projects we currently have under contract. Especially in Anchorage, which will be the first of the projects to come online. The market has done incredibly well. And we feel exceptionally good about our underwriting there. We have seen increased strength in Vegas as well, which gives us incremental confidence. The SpringHill Suite that we purchased, you know, where we will be building additional hotels is yielding 11% right now on our acquisitions price, which all of that feels really good. The reality is that it is difficult to underwrite and to find deals that pencil like the deals we currently have under contract. And while we are given regular occasion to, look at potential additional development deals. A variety of factors have made them more difficult to pencil, and you highlighted the primary factors there. Certainly, interest rates are elevated relative to where they once were even if they are closer to historical averages when you zoom out and look at a more extended period of time. But, really, the primary driver of the disconnect has been a really rapid increase in overall construction costs some of which started before COVID. And certainly, we saw an accelerated run up afterwards. The year over year growth rate seems to have slowed a little bit, but talk of tariffs, increased shipping costs, and challenges with freight and things of that sort continue to plague development deals from a cost standpoint. And then many markets really have been slower to rebound from a operating performance standpoint relative to the meaningful increases we have seen overall construction costs. And so when we look across markets, and I highlighted in my prepared remarks as well, we continue to have very limited exposure to new construction, whether or not we are involved in it, across markets where we have ownership. I think that continues. And as we think about near term we are much more likely, I think, over the next 6 to 12 months to be signing up existing deals than we are to be entering into new forward commitments just given where we see values for, you know, the 2 different options. I think the brands have spoken to things they are doing to try to reaccelerate. Or to sustain their development pipelines. And, certainly, we have experienced that, in the form of key money and other incentives. I think for the foreseeable future, you know, that is going to continue to exist. And about our portfolio specifically, where we are heavily invested in select service assets, supply has historically impacted our sector specifically. The meaningful pullback, we think and I have said this in prepared remarks for several earnings calls now, but we think meaningfully shifts the risk profile of a portfolio like ours decreasing the downside risk and meaningful meaningfully increasing the upside potential. I think this past quarter, we began to see that with strong performance across markets, and the ability to flow that to the bottom line. And given what we are looking at today in terms of forward booking pace, through the remainder of the year, you know, we think we continue to benefit. that is great color. Thanks. Operator: Our next question is from Michael Bellisario with Baird. Please proceed with your question. Michael Bellisario: Good morning. Thanks, everyone. Justin, I want to first discuss capital allocation as a follow-up there. Just could you dig into the bid ask spread that you mentioned in your prepared remarks? Maybe help us understand how wide is it? What looks more or less interesting today from an investment perspective? And then what do you think needs to happen for that spread to reach parity? Justin G. Knight: Yeah. Sure. You know, it is interesting. I think my expectations were at this point in the cycle, especially given the strength we have seen recently, we would be experiencing or seeing more happen in our space. I think we are more optimistic based on products that we are underwriting today and, you know, product coming to market that we are nearing a point where we could see meaningful greater deal flow. But the reality is for some period of time, and this varies pretty dramatically by market. For some period of time, there is been a fairly wide bid-ask spread, you know, as much as 200 or 300 basis points from a cap rate standpoint depending on market and product. I think what we have observed happening is product that has been on the market for an extended period of time is starting to look, in some cases, more reasonable given the recent run up in operating performance, which is making yields more attractive. And, you know, should current trends continue, which we feel reasonably confident they will, you know, I think that alone gets us to a point where more deals pencil and we are able to get more, more active on the acquisitions front. You know, aligned with that somewhat is the fact that we have seen improvement in our share price over the past several months. And as we think about uses of capital, our underwriting can consistently weighs potential acquisitions against purchases of our shares. And, you know, I think up until recently, the map clearly pointed towards share purchases. I will tell you today, and I said in my prepared remarks, there is still a gap. And, you know, as we think about valuation, especially on days where share price pulls back, You know, I think we still feel that there is meaningful value and upside in our shares. But the gap's shrinking. And, you know, I could see, I could see us, becoming more active on the acquisitions front end. And, really, quite frankly, that market in total becoming more active as we move towards the end of the year, especially to the extent we continue to see positive indicators for how 2027 might shape up. Thanks. that is all very helpful. Michael Bellisario: I wanna also go back and ask on some of the revenue management topics. And probably for Liz here, just maybe how have operators shifted their approach? I mean, I know you gave some of the stats, but maybe help us understand sort of where they are leaning in or pulling back. Are they holding out for more short term high rated business Just sort of any updates here on sort of on the ground strategies would be helpful. that is all for me. Thank you. Elizabeth S. Perkins: Yeah. I think that a combination of, you know, the revenue management system and our revenue management teams, you know, have focused their efforts on maximizing you know, total RevPAR through, you know, segmentation really capitalizing on the pickup in near term demand where we, you know, had some opportunity last year was where transient was not picking up last minute the way it had historically, and we certainly attributed a good part of that to the overall uncertainty, the pullback in government and government adjacent business. And that really created a scenario where we needed to think through other forms of base business. You know, base business is typically always a good idea, Just depends on what rate you are putting it on the books for. And I would say 1 of you know, 1 of the strategies our teams have taken in markets where we are seeing strength, which is more than not right now, is putting on good group based business. You saw an--or I have highlighted in my prepared remarks, we were up to 18 in the quarter, which is very high for us. You know, at really, really strong rates. Further compressing the hotel not taking it at rates that would diminish our overall ADR, you know, penetration from an index perspective and really capitalized on the pickup in that near-term transient business. And we are, you know, seeing really good success that way. You know, part of our performance was based on World Cup markets, but we saw that phenomenon outside of those markets, too. And so we are really encouraged by that. And, again, 1 of the things that gives us confidence to increase the back half of the year from a guidance perspective is the consistency across markets and consistency over time periods where we are seeing, you know, near term transient picking up in a positive way. Helpful. Thank you. Thank you. Operator: Our next question is from Floris Van Dykum with Ladenburg Thalmann. Please go ahead. Analyst: Hey. Thanks, guys. Question. I am encouraged by the improvement in your conversion assets. Obviously, it is only a quarter. What kind of impact do you think, you know, that putting new management teams on those assets could do to the EBITDA, which I think you had alluded to was 8% of total EBITDA prior to the conversion, how much upside further upside is there ahead in your view? Elizabeth S. Perkins: We are really pleased with the transitions and how quickly the teams have reacted to, you know, integrate them into, you know, the new management organizations, the market clusters that we have in many cases where we transition to managers that we, that have presence, you know, in those markets as well, leveraging that from, you know, an economies of scale perspective, from a market expertise perspective, both helping to drive the top line, and also cost synergies. For managing multiple assets across a given market. So we are we are really pleased at how quickly they integrated into, the new management, the near-term margin expansion that we have seen. You know, there was some transition related to moving those contracts to new managers, meaning, you know, we had open positions and things of the sort, I think we will end up in a very favorable place from, you know, a margin gain perspective, for those assets long term. We anticipated that when we made the transition And we really think that between the cost synergies and the top line benefit, that we will continue to see margin and, you know, EBITDA contribution, in excess of what we would if we had stayed and not transitioned. If you think back to my prepared remarks in the quarter, those assets had 300 basis points of margin gain. That was about a 15 basis point impact on same store margin. You know, hopefully, we will be able to continue to see some of that, but there were some transition related, impacts that helped drive that. But overall, very, very pleased. And, again, how quickly we were able to integrate and start driving the top line especially, puts us in a really good position as we continue to move through the year. Thanks, Cliff. Analyst: And then maybe my other question is more on the on the capital market side. You talked a little bit, Justin, about the disconnect still Are there specific as you look at your portfolio, you know, what are the areas where you would like to have more exposure if you could? If the if the markets continue to, you know, move in your favor and you continue to, you know, to see opportunities. And pricing disconnect between buyers and sellers narrows what are the what are the sort of things that we should expect you to allocate capital? Is it is it more urban markets, or is it, you know, like the deals in San-- you know, sorry, Las Vegas and in DC, or is it more your traditional suburban markets? Justin G. Knight: I think you will continue to see us pursue assets that are a mix of locations. You know, I think thinking about how our portfolio performed over the quarter, we saw strength in both our urban markets and our suburban markets. Recent acquisitions are indicative of the types of hotels and markets that we would love to be in. And they have been a combination of more urban locations and high density suburban markets. For us, the key is adequate density and demand on both the business and leisure side to enable us to achieve premium rates and drive efficiencies from an operating standpoint. And, you know, the reality is if I look at recent acquisitions like the South Jordan Embassy, which is in a suburban suburb of Salt Lake City, we are yielding 11% on that asset. You know? And we have done incredibly well Downtown Salt Lake. Where we are yielding just under 11% on the courtyard and the Hyatt House that we bought most recently. So I think you know, you should expect the makeup of our portfolio to be, you know, relatively similar to what we have now with continued investments. Looking much like, the types of assets that we have acquired recently. Thanks. Operator: Our next question is from Jack Armstrong. With Wells Fargo. Please go ahead. Jack Armstrong: Hey. Good morning, and thanks for taking the question. We have spent a lot of time talking about the BT strength you saw in the quarter, even outside of your larger markets and those with a little bit of exposure. Do you have a sense of the specific industries that are driving that strength? Is that related at all to the higher infrastructure spend we are seeing around the country? Or maybe an uptick in some of the consulting businesses that have historically been pretty impactful for your portfolio or anything else you would highlight there? Justin G. Knight: I would say yes to all of that. You know, I think I commented earlier Our portfolio is intentionally diversified, not only across geographic areas, but across exposure to different industries, and we have seen strength across a variety of different industries. and business types. I think certainly encouraged with some improvement in consulting type business, which had been really slow to rebound. And tech business, which had also been slow to rebound. But looking outside of that, we have benefited from a broad variety of different sectors. Certainly, on the margin, whether directly or indirectly through compression, I believe that we are benefiting from incremental infrastructure spending, but not exclusively that. And, you know, looking across markets that performed really well for us, the drivers of those markets is very diverse. Helpful there. Jack Armstrong: And then is there any meaningful change in the renovation disruption you are expecting this year as you shift to the projects in Alaska and Seattle? Justin G. Knight: I mean, that is a good question. They are larger assets. And high EBITDA producing assets. We have intentionally timed the renovations to minimize disruption. And they will be spread over fourth quarter and first quarter of next year. Such that the impact will be felt across both. I think relative to past years, we work to manage renovations in a way that minimizes overall disruption. And as a result, you do not hear us speak to it regularly. We do not anticipate disruption to be out. I would make 1 comment, though. The work that we are doing in Seattle Lake Union is different in that beyond the renovation to disruption, we are rebranding that hotel And so we do anticipate a ramp period for that hotel which would be factored into next year's guidance. Really helpful. Thank you. Absolutely. Operator: Once again, if you would like to ask a question, please press 1 on your telephone keypad. Our next question is from Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead. Austin Wurschmidt: Thanks. Good morning. I wanted to go back to the comment around cost per occupied room, and, you know, I was just wondering if the back half, you know, what is really driving the increase in cost per occupied room in the back half of the year relative to what you achieved in the first half given some of the mix shift benefits and opportunities that you have talked about? Elizabeth S. Perkins: it is a good question. I on a cost per occupied room basis related to variable costs, it is very similar. Across the guidance range as well as relative to how we performed in the first half of the year. Really, it is a fixed cost phenomenon. You know, we had a favorable real estate tax appeal that hit in the fourth quarter of last year. It was our largest of last year. We have them hit throughout the year, but the largest 1 was in the fourth quarter. So we have that hurdle baked in. And then we also had mentioned at the beginning of the year that we had assumed that we would have an increase beginning in November related to an insurance renewal. You know, that may prove to be conservative, but that is baked in there too. So it is an assumption across the guidance range that fixed costs will be driving the CPOR differential and the better that we do on the top line. You know, the easier that hurdle will be. But overall, really pleased with you know, where we have been trending from a total hotel perspective both from a dollar standpoint and growth but also on a CPOR basis. Really proud of the team. And how they have been able to manage our variable costs and how our partners have been able to help us with appeals. We have been successful this year. We had a credit in the second quarter as well that was helpful. That impacted April flow through. In a positive way and, you know, we are we continue to work, and we may see more of that as we move through the year. But do have relative to last year, a little bit of a hurdle in Q4. Understand. Austin Wurschmidt: And then I was just wondering, Justin, I mean, any preliminary thoughts given your exposure to Marriott properties around, you know, the intent to recommend and just how you are thinking your portfolio might stack up within a relative scoring system versus, you know, other hotels. Justin G. Knight: I appreciate the question. Details are still limited at this point. So we do not yet know where Marriott intends to set those thresholds. We have a high quality portfolio of hotels, and I think, assuming reasonable thresholds, we would anticipate benefiting from it. I think more importantly, you know, I think what we have seen recently is increased effort on the part of the brands to work with owners to find ways to drive incremental profitability. And I think Marriott's, you know, move to implement an incentive program designed to drive intended to recommend, and to reward owners for investment to that end, improves the consumer experience at Marriott Hotels, and, you know, provides owners with a pathway towards incremental profitability, which from our vantage point, is a win. Appreciate the thoughts. Thank you. Operator: We have reached the end of the question and answer session. I would like to turn the floor back over to Justin G. Knight for closing remarks. Justin G. Knight: Thank you. I am going to end today on a bit of a personal note. We recently lost our chief accounting officer, Rachel Labrecque, to cancer. Rachel was 1 of the most exceptional individuals I have ever known. And her loss has been felt across the entire company. I wanted specifically to express my appreciation to her team, who is really stepped up in amazing ways. Ways that I am confident would make Rachel incredibly proud. We own amazing real estate at the end of the day, it is our people who differentiate us, and Rachel was 1 of our best. She will be deeply missed. I also want to thank you for joining us today. We are pleased with our strong results for the quarter and appreciate your continued interest. As always, I hope that as you travel, you take the opportunity to stay with us at 1 of our hotels, and we look forward to meeting with many of you over the coming months. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Apple Hospitality REIT, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple Hospitality REIT wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Apple Hospitality REIT (APLE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Apple Hospitality REIT, Inc.? Here are five stocks we like better. Strong Q2 performance: Comparable-hotel RevPAR rose 5.3% to $136, driven by higher rates, improved occupancy and broad-based gains in business and leisure travel. Adjusted hotel EBITDA increased 9.7%, while the margin expanded 120 basis points to 38.1%. 2026 outlook raised: Apple Hospitality increased its full-year comparable RevPAR growth forecast to 2.25%–4.25% and expects a 33.7%–34.7% adjusted hotel EBITDA margin. Management cited strong forward bookings, transient demand and favorable comparisons. Balance sheet strengthened: July refinancing expanded the primary unsecured credit facility to approximately $1.3 billion, extended maturities through 2032 and moved the next significant unsecured maturity to 2029. The company had $1.5 billion of debt and no outstanding revolver balance at the refinancing date. Apple Hospitality REIT (NYSE:APLE) reported stronger second-quarter operating results, citing broad-based gains in business and leisure travel, improved weekday occupancy and disciplined expense management. The lodging REIT raised its full-year RevPAR and hotel EBITDA margin outlook after comparable-hotel RevPAR increased 5.3% in the quarter. Chief Executive Officer Justin Knight said approximately three-quarters of the company’s hotels posted RevPAR growth during the period, compared with roughly two-thirds in the first quarter. Comparable-hotel RevPAR reached $136, supported by a 3.5% increase in average daily rate to $170 and a 130-basis-point increase in occupancy to 80.1%. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth “Weekday occupancy improvement outpaced weekend occupancy improvement during the quarter, indicative of strengthening business travel across our portfolio,” Knight said. Preliminary July results pointed to comparable-hotel RevPAR growth of more than 5.5%, he added. Comparable-hotel revenue rose 6.2% to $402 million in the second quarter, while comparable-hotel adjusted hotel EBITDA increased 9.7% to $153 million. Adjusted hotel EBITDA margin expanded 120 basis points to 38.1%. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Chief Financial Officer Liz Perkins said the company converted approximately $0.58 of each incremental revenue dollar into comparable-hotel adjusted hotel EBITDA. Operating expenses rose 3.5% against 4.7% same-store revenue growth, while fixed expenses declined. Wage growth moderated, with rooms wages rising less than 3%, or less than 1% per occupied room. Utilities and repairs and maintenance were expense headwinds, increasing 9% and 6%, respectively. However, lower fixed expenses reflected a favorable property insurance renewal that took effect in April and successful real estate-tax appeals, Perkins said. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Modified funds from operations, or MFFO, was $123 million, or $0.52 per share, during the quarter, rising 9% and 8.3%, respectively. For the first six months of 2026, MFFO totaled approximately $204 million, or $0.86 per share, up 6.1% in dollars and 7.5% per share. Management pointed to a strengthening mix of business transient and group demand. Same-store weekday occupancy increased 240 basis points in the second quarter, exceeding the 120-basis-point improvement in weekend occupancy. Brand.com accounted for 40% of room nights, up 80 basis points year over year, while global distribution system bookings rose 100 basis points to 18% of room nights. Perkins said the increase in GDS bookings was a notable indication of business-travel strength. The company also saw business travelers booking at retail rates rather than negotiated corporate rates, helping support rate growth. Best available rate business rose 120 basis points to 33% of occupancy mix, while negotiated business fell 160 basis points to 15%. Group business represented 18% of occupancy mix, up 60 basis points from a year earlier. Perkins said that was among the company’s strongest quarterly group contributions, compared with a historical range of roughly 15% to 16%, and noted that group was the company’s second-highest-rated segment. Performance was broad across markets, according to the company. Kansas City RevPAR increased 17% and Fort Worth/Arlington rose 16%, with rate growth driving results in markets hosting FIFA World Cup events. World Cup activity contributed approximately 50 basis points to second-quarter RevPAR growth, including roughly 150 basis points in June, Perkins said. Excluding World Cup host markets, Knight said portfolio RevPAR still grew nearly 5%. Other notable markets included South Bend, where RevPAR increased 24% on midweek group demand connected to Notre Dame; Anchorage, where RevPAR rose 17%; and Chicago and St. Louis, where RevPAR each increased 13%. Phoenix was an exception, with RevPAR declining 5% amid lower occupancy and rate, partly due to a pullback in semiconductor-related business. Apple Hospitality raised its full-year comparable-hotel RevPAR growth outlook to a range of 2.25% to 4.25%. At the midpoint, the forecast represents a 225-basis-point increase from the company’s prior outlook. The company now expects comparable-hotel adjusted hotel EBITDA margin of 33.7% to 34.7%, with the midpoint implying a 25-basis-point year-over-year increase. Adjusted EBITDAre guidance: $453 million to $476 million Net income guidance: $152 million to $180 million Expected full-year capital expenditures: $85 million to $95 million Knight said the revised midpoint still assumes more modest second-half growth than the company generated in the first half. Management cited continued forward-booking strength, potential benefits from comparisons with prior periods affected by reduced government travel and last year’s government shutdown, and stronger-than-anticipated transient demand. In July, subsequent to quarter-end, the company completed refinancing transactions that increased its primary unsecured credit facility to approximately $1.3 billion, extended maturities and improved pricing terms. The facility includes a $700 million revolver maturing in 2030, a $275 million term loan maturing in 2031 and a $300 million term loan maturing in 2032. Apple Hospitality also increased a separate term loan to $160 million from $130 million and extended its maturity by seven years. Perkins said the transactions lifted the weighted average debt maturity to nearly five years, left the company with no outstanding revolver balance and pushed its next significant unsecured maturity to 2029. At June 30, the company had approximately $1.5 billion of total debt, a weighted average interest rate of 4.8%, and approximately $602 million available under its revolving credit facility. During the quarter, it repaid a secured mortgage loan totaling about $19 million, increasing its number of unencumbered hotels to 207. The company also said it has no acquisition agreements for 2026, as seller expectations have generally remained above levels it considers accretive relative to its cost of capital. It continues to evaluate asset sales and potential acquisitions, while maintaining forward purchase commitments for an AC Hotel in Anchorage expected in late 2027 and a dual-branded AC and Residence Inn project in Las Vegas expected in the second quarter of 2028. Apple Hospitality REIT (NYSE: APLE) is a publicly traded real estate investment trust that focuses on acquiring, owning and operating high-quality, upscale, select-service hotels. The company's portfolio primarily consists of properties operated under premium franchise agreements with leading lodging brands such as Marriott, Hilton and Hyatt. Apple Hospitality REIT is self-managed and internally advised, overseeing property management, revenue optimization and asset-level operations through its in-house team of hospitality professionals. The company's holdings encompass over 200 hotels featuring more than 30,000 guest rooms across a diverse array of markets in the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Apple Hospitality REIT Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved RevPAR growth of over 5% driven by broad-based improvements in both business and leisure travel demand across approximately three-quarters of the portfolio. Weekday occupancy gains outpaced weekend improvements, signaling a significant strengthening in business travel fundamentals across multiple industries and geographies. Converted 58 cents of every incremental revenue dollar into adjusted hotel EBITDA, resulting in 120 basis points of margin expansion through disciplined expense management. Transitioned 13 Marriott-managed hotels to third-party franchise operators, yielding 7% RevPAR growth and over 300 basis points of margin expansion for that group. Maintained a defensive supply position with 55% of the portfolio having no new upper-midscale to upper-upscale product under construction within a five-mile radius. Successfully executed a series of refinancings in July that extended weighted average debt maturity to nearly five years and increased revolving credit capacity to $700 million. Raised full-year RevPAR growth guidance to a midpoint of 3.25% and adjusted hotel EBITDA margin guidance by 75 basis points at the midpoint. Guidance assumes more modest growth in the second half of 2026 compared to the first half, which management characterized as potentially conservative. Anticipates potential upside from lapping prior-year periods negatively impacted by government travel reductions and the 2025 government shutdown. Expects to reinvest between $85 million and $95 million in capital expenditures for 2026, including comprehensive renovations at 18 hotels. Forward purchase contracts for development projects in Anchorage and Las Vegas are scheduled for delivery in late 2027 and Q2 2028, respectively. Completed the sale of a Hampton Inn and Suites in Rochester, Minnesota at a 5% cap rate to redeploy capital into higher-value opportunities. Initiated a rebranding of the Seattle Residence Inn, which is expected to require a ramp-up period following renovation completion. Management noted that while Middle East conflicts have not yet impacted consumer spending, the portfolio's value proposition historically performs well during economic uncertainty. Acknowledged a 5% RevPAR decline in the Phoenix market due to a pullback in semiconductor-related business, though long-term fundamentals remain supported by new investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that GDS channel bookings grew for the first time in years, indicating a shift from negotiated corporate rates to higher-rated retail segments. Group business reached 18% of the occupancy mix, driven by a combination of corporate and leisure small groups at attractive rates. The gap between seller expectations and buyer willingness remains at approximately 200 to 300 basis points in cap rate terms depending on the market. Management indicated the gap is narrowing as operating performance improves, making current yields more attractive relative to the company's cost of capital. Rapid increases in construction costs and interest rates have made new development deals difficult to pencil, which management believes limits competitive supply growth. The company prefers signing existing deals over new forward commitments for the next 6 to 12 months due to current market valuations. Projected increases in cost per occupied room (CPOR) for the second half are driven by fixed-cost hurdles, including a large real estate tax appeal credit from Q4 2025. Variable costs are expected to remain consistent with first-half performance, supported by moderating wage growth.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Apple Hospitality REIT Inc (NYSE:APLE) reported strong second-quarter comparable hotels RevPAR growth of over 5%, driven by broad-based improvements in both business and leisure travel demand. The company achieved significant operational efficiency, converting each incremental revenue dollar into strong flow-through, resulting in 120 basis points of margin expansion and MFFO per share growth of over 8%. Business travel demand strengthened, with weekday occupancy improving 240 basis points during the quarter, and the company saw continued strength in group bookings, which reached 18% of occupancy mix at high rates. The company successfully completed a series of refinancing transactions in July, extending maturities, improving pricing, and increasing credit facility capacity, leaving it with strong liquidity and no significant unsecured maturities until 2029. The transition of 13 Marriott-managed hotels to new operators proved successful, with these properties delivering RevPAR growth of over 7% and margin expansion of over 300 basis points, well ahead of the portfolio average. Management raised full-year RevPAR growth guidance by 225 basis points and margin guidance by 75 basis points, reflecting confidence in continued strong demand trends and favorable comparisons. Apple Hospitality REIT Inc (NYSE:APLE) noted that the gap between buyer and seller expectations remains a primary constraint on acquisitions, limiting the company's ability to deploy capital into new deals despite active engagement. The company experienced a decline in Phoenix RevPAR of 5%, driven by a pullback in semiconductor-related business, highlighting potential vulnerability in specific markets tied to cyclical industries. Utility and repair/maintenance expenses were primary cost headwinds, growing 9% and 6% respectively, which could pressure margins if these trends continue. The company faces a more modest growth outlook for the second half of the year, with guidance implying slower RevPAR growth than the first half, and potential hurdles from a favorable real estate tax appeal in Q4 of last year. Management acknowledged that the midpoint of guidance does not fully reflect potential upside from lapping easier government travel comparisons, indicating some uncertainty in the pace of recovery in that segment. The company is undertaking larger renovation projects, including a rebranding in Seattle, which is expected to cause a ramp period and potential disruption that could impact near-term performance. Warning! GuruFocus has detected 10 Warning Signs with APLE. Is APLE fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on what you're seeing from business transient (BT) demand, the drivers behind it, and what's driving the strength in group business?A: Justin Knight (CEO) noted that BT trends have been very encouraging since March, with a shift in business mix from negotiated corporate rates to retail rates, evidenced by growth in brand.com and GDS bookings. The improvement is broad-based across multiple industries and geographies, reflecting the portfolio's intentional diversification. Liz Perkins (CFO) added that group business reached 18% of occupancy mix, one of the strongest quarters historically, driven by both corporate and leisure groups, and it remains the second-highest rated segment, contributing to RevPAR growth. Q: Can you help unpack the broad-based demand you're seeingis it more with higher-end or lower-end travelers, and are there any segments that aren't as strong?A: Justin Knight (CEO) clarified that the portfolio does not include economy or mid-scale hotels, with an average daily rate of nearly $200, indicating a focus on higher-end travelers. The strength was broad-based across markets, with Phoenix being a notable exception due to a pullback in semiconductor-related business. He emphasized that the majority of markets experienced RevPAR growth, and the diversity of exposure suggests a positive indicator for both business and leisure travel. Q: You mentioned that upside from lapping easier government comparisons is not baked into the midpoint of the guide. How is that pacing for the quarter and second half, and what are your expectations for government travel?A: Liz Perkins (CFO) explained that they expect improvement in RevPAR relative to the government shutdown in Q4, as the third-quarter comps are not as significant. While there has been improvement in the government segment, the company has prioritized higher-rated business. At the midpoint of guidance, some growth is baked in for Q4, but the combination of current trends and lapping government comps is more reflected at the high end of the range. Q: What are the prospects to accelerate or increase development property forward purchase deals, and where do you see the biggest gap in getting new construction to pencil?A: Justin Knight (CEO) expressed excitement about the two development projects under contract, particularly in Anchorage and Las Vegas, which are performing well. However, he noted that it's difficult to underwrite new deals that pencil due to elevated interest rates and a rapid increase in construction costs, which have outpaced operating performance recovery. He expects that over the next 6-12 months, the company is more likely to pursue existing asset acquisitions rather than new forward commitments, given the current value proposition. Q: Can you dig into the bid-ask spread you mentionedhow wide is it, what looks more or less interesting from an investment perspective, and what needs to happen for that spread to reach parity?A: Justin Knight (CEO) indicated that the bid-ask spread has been as wide as 200-300 basis points from a cap rate standpoint, varying by market and product. However, products that have been on the market for an extended period are starting to look more reasonable given the recent run-up in operating performance. He noted that the gap is shrinking, and with improved share price, the company is weighing acquisitions against share repurchases. He could see becoming more active on the acquisition front as the year progresses, especially with positive indicators for 2027. Q: How have operators shifted their approach following the management transitions, and are they leaning into short-term high-rated business?A: Justin Knight (CEO) explained that the revenue management teams have focused on maximizing total RevPAR through segmentation, capitalizing on the pickup in near-term demand. They are putting on good group-based business at strong rates to compress the hotel without diminishing ADR penetration. This strategy has been successful, even outside World Cup markets, and gives confidence in the back-half guidance. Q: What kind of impact do you think putting new management teams on the converted assets could do, and how much further upside is there ahead?A: Liz Perkins (CFO) noted that the transitions have been successful, with teams quickly integrating into new management platforms and market clusters, driving both top-line growth and cost synergies. The converted assets delivered over 300 basis points of margin expansion in Q2, and while some of that was transition-related, the company expects continued margin gains long-term, exceeding what would have been achieved without the transition. Q: Do you have a sense of the specific industries driving the BT strength, and is it related to infrastructure spend or consulting businesses?A: Justin Knight (CEO) confirmed that the strength is broad-based across various industries, with improvements in consulting and tech businesses that had been slow to rebound. The portfolio benefits from incremental infrastructure spending, but it's not exclusive to that. The diversity of demand drivers across markets that performed well indicates a wide-ranging recovery. Q: Is there any meaningful change in renovation disruption expected this year as you shift to projects in Alaska and Seattle?A: Justin Knight (CEO) stated that the renovations are larger assets and high EBITDA producers, but they are intentionally timed to minimize disruption, spread over Q4 and Q1 of next year. The Seattle Lake Union project is different as it involves a rebranding, which will require a ramp period factored into next year's guidance. Q: What's driving the increase in cost per occupied room in the back half of the year relative to the first half?A: Liz Perkins (CFO) explained that on a variable cost basis, the trends are similar, but the increase is driven by fixed costs, including a favorable real estate tax appeal from Q4 of last year that creates a hurdle, and an assumed increase in insurance renewal costs beginning in November. The better the top-line performance, the easier that hurdle will be, and the team has been successful in managing variable costs. Q: Given your exposure to Marriott properties, do you have any preliminary thoughts on the "recommend" incentive program and how your portfolio might stack up?A: Justin Knight (CEO) noted that details are still limited, but assuming reasonable thresholds, the high-quality portfolio would likely benefit. He views Marriott's move to implement an incentive program designed to drive intent to recommend as a win-win, improving the consumer experience and providing owners with a pathway to incremental profitability. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

RICHMOND, Va., August 05, 2026--(BUSINESS WIRE)--Apple Hospitality REIT, Inc. (NYSE: APLE) (the "Company" or "Apple Hospitality") today announced results of operations for the second quarter ended June 30, 2026. Justin Knight, Chief Executive Officer of Apple Hospitality, commented, "We are pleased to report Comparable Hotels RevPAR growth of more than 5% for the second quarter, driven by broad-based improvements in both business and leisure travel demand that extend beyond the impact of last year's headwinds. Improvement in weekday occupancy outpaced improvement in our already strong weekend occupancy, indicative of strengthening business travel and continued robust leisure demand across our portfolio. Our asset management and operating teams did an excellent job managing expenses across our efficient, rooms-focused hotels, achieving exceptional flow through of top-line improvements to deliver meaningful margin expansion and strong bottom-line growth. Demand momentum has continued into the third quarter, with preliminary reports for the month of July indicating Comparable Hotels RevPAR growth of more than 5.5% as compared to the same period last year. While FIFA World Cup 2026 events drove incremental demand and pricing power in our host markets, they were not the primary driver of our outperformance during the quarter. We are pleased with the improved performance we are seeing throughout our portfolio as consumers continue to prioritize travel and demand for our broadly diversified, rooms-focused hotels remains resilient. "We successfully refinanced our primary unsecured credit facility and one of our term loans in July, further enhancing the strength and financial flexibility of our balance sheet and bolstering our already strong liquidity position," said Mr. Knight. "In addition to extended staggered maturities and improved pricing, the refinancing upsized our revolving credit facility and one of our term loans, ensuring we are well positioned to achieve our strategic growth and capital allocation priorities in the coming years. We greatly appreciate the support of our lenders, their conviction in our core strategy and their continued confidence in the underlying fundamentals of our business." Mr. Knight continued, "Our outstanding results during the quarter highlight the strength of our corporate and on-site management teams and further validate our proven strategy of investing in a diversified portfolio of high-quality, rooms-focused hotels with low leverage. During the quarter, we completed the sale of our Hampton Inn & Suites Rochester-North for a gross sales price of approximately $9 million. We have a demonstrated record of transacting at optimal times in the cycle, balancing both near- and long-term investment decisions to enhance our existing portfolio, optimize our capital reinvestment program and maximize total returns for our shareholders over time. We are encouraged by the demand outlook for the remainder of the year and confident we are well positioned for the long term." Hotel Portfolio Overview As of June 30, 2026, Apple Hospitality owned 216 hotels with an aggregate of 29,459 guest rooms located in 83 markets throughout 37 states and the District of Columbia. Second Quarter 2026 Highlights Operating performance: For the second quarter 2026, the Company achieved Comparable Hotels ADR of approximately $170, up 3.5% as compared to the second quarter 2025; Comparable Hotels Occupancy of approximately 80%, up 1.6% as compared to the second quarter 2025; and Comparable Hotels RevPAR of approximately $136, up 5.3% as compared to the second quarter 2025. The Company's Comparable Hotels ADR, Occupancy and RevPAR exceeded industry averages as reported by STR for the second quarter 2026. Preliminary results for the month of July 2026 indicate an increase in RevPAR of more than 5.5% as compared to July 2025. Bottom-line performance: For the second quarter 2026, the Company achieved Comparable Hotels Adjusted Hotel EBITDA of approximately $153 million, up 9.7% as compared to the second quarter 2025; Comparable Hotels Adjusted Hotel EBITDA Margin of 38.1%, up 120 bps as compared to the second quarter 2025; Adjusted EBITDAre of approximately $145 million, up 7.5% as compared to the second quarter 2025; and MFFO of approximately $123 million, up 9.0% as compared to the second quarter 2025. Refinancing transactions: In July 2026, the Company amended and restated its existing unsecured $1.2 billion credit facility, increasing the total credit facility to approximately $1.3 billion and extending and staggering the maturity dates while achieving improved pricing terms. The Company also amended and restated its $130 million term loan, increasing the amount of the term loan to $160 million and extending the maturity date by seven years. Balance sheet: The Company has maintained the strength and flexibility of its balance sheet. At June 30, 2026, the Company’s total debt to total capitalization, net of cash and cash equivalents, was approximately 27.4%. Transactional activity: In April 2026, the Company sold the 124-room Hampton Inn & Suites Rochester-North, in Rochester, Minnesota, for a gross sales price of approximately $8.7 million. Monthly distributions: During the three months ended June 30, 2026, the Company paid distributions totaling $0.24 per common share. Based on the Company’s common stock closing price of $16.56 on August 3, 2026, the current annualized regular monthly cash distribution of $0.96 per common share represents an annual yield of approximately 5.8%. The following table highlights the Company’s Comparable Hotels monthly performance during the second quarter 2026 as compared to the second quarter 2025 (in thousands, except statistical data): Portfolio Activity Contract for Potential Acquisition As previously announced, the Company has entered into a fixed-price, forward-purchase contract for the purchase of an AC Hotel by Marriott that is under development in Anchorage, Alaska, for an anticipated total purchase price of $65.5 million with an expected 160 rooms, which the Company anticipates acquiring in the fourth quarter 2027. There are many conditions to closing on this hotel that have not yet been satisfied, and there can be no assurance that closing on this hotel will occur under the outstanding purchase contract. Development Project As previously announced, the Company has entered into a fixed-price, forward-purchase contract with a third-party developer to develop a dual-branded property, consisting of an AC Hotel by Marriott and a Residence Inn by Marriott in Las Vegas, Nevada, for an anticipated total purchase price of approximately $143.7 million. The two hotels are under development on the land the Company owns adjacent to its existing SpringHill Suites by Marriott Las Vegas Convention Center. The Company anticipates the AC Hotel and the Residence Inn will be completed and opened for business in the second quarter 2028. Upon completion, the AC Hotel is expected to have approximately 237 guest rooms and the Residence Inn is expected to have approximately 160 guest rooms. As of June 30, 2026, the Company has capitalized $9.9 million related to the construction of the two hotels. Disposition As previously announced, in April 2026, the Company sold the 124-room Hampton Inn & Suites by Hilton Rochester-North, in Rochester, Minnesota, for a gross sales price of approximately $8.7 million, resulting in a gain on sale of approximately $0.2 million. Capital Improvements Apple Hospitality consistently reinvests in its hotels to maintain and enhance each property’s relevance and competitive position within its respective market. During the six months ended June 30, 2026, the Company invested approximately $40 million in capital expenditures. The Company anticipates investing approximately $85 million to $95 million in capital improvements during 2026, which now includes comprehensive renovation projects for approximately 18 hotels. The increase of $5.0 million at the midpoint of the Company's previous estimate of anticipated capital expenditures for 2026 and the decrease in the number of comprehensive renovation projects are primarily a result of prioritizing two larger projects: the renovation of the Embassy Suites by Hilton Anchorage and the rebranding of the Residence Inn by Marriott Seattle Downtown/Lake Union to a Homewood Suites by Hilton. The Company's expectations reflect its ongoing prioritization and management of its overall capital spending to keep its hotels competitive, while weighing larger investments toward the highest return opportunities. The Company's estimates of future capital expenditures are subject to change, and inflationary pressures, supply chain disruptions, tariffs, or other factors could result in additional cost increases or delays to anticipated projects. Balance Sheet and Liquidity Summary As of June 30, 2026, the Company had approximately $1.5 billion of total outstanding debt with a current combined weighted-average interest rate of approximately 4.8%, cash on hand of approximately $10 million and availability under its revolving credit facility of approximately $602 million. Excluding unamortized debt issuance costs and fair value adjustments, the Company’s total outstanding debt as of June 30, 2026, was comprised of approximately $162 million in property-level debt secured by nine hotels and approximately $1.3 billion outstanding under its unsecured credit facilities. During the second quarter, the Company repaid in full one secured mortgage loan, for a total of approximately $19 million, bringing the number of unencumbered hotels in the Company’s portfolio as of June 30, 2026, to 207. The Company’s total debt to total capitalization, net of cash and cash equivalents at June 30, 2026, was approximately 27.4%, which provides Apple Hospitality with financial flexibility to fund capital requirements and pursue opportunities in the marketplace. As of June 30, 2026, the Company’s weighted-average debt maturities were approximately two years. Refinancing Transactions In July 2026, the Company amended and restated its existing unsecured $1.2 billion credit facility (the "Main Credit Facility"), increasing the borrowing capacity to approximately $1.3 billion, extending maturity dates and achieving improved pricing terms across the majority of the credit agreement’s leverage-based pricing grid. The Main Credit Facility is comprised of a term loan of $275 million with an extended maturity date of July 24, 2031; a term loan of $300 million with an extended maturity date of January 23, 2032; and a revolving credit facility of $700 million with an initial maturity date of July 24, 2030, which may be extended up to one year subject to certain conditions. The amendments under the Main Credit Facility provide for additional capacity of $50 million under the revolving credit facility, improve certain financial covenants, and update pricing. The amended and restated credit agreement includes an accordion feature in which the amount of the total Main Credit Facility may be increased from approximately $1.3 billion to $1.75 billion. The pricing grid on the Main Credit Facility ranges from a SOFR rate plus 1.35% to 2.30%, depending on the specific loan and the Company’s leverage ratio as calculated under the terms of the credit agreement. The Company also successfully worked with its lenders to conform the pricing grid on two other unsecured credit facilities, totaling $470 million, to match the improved pricing under the Main Credit Facility. The amendments did not change the principal amounts of the two term loans or their maturity dates. The Company also amended and restated its $130 million term loan, increasing the amount of the term loan to $160 million and extending the maturity date by seven years (the "Seven-Year Term Loan") to July 24, 2033. The $30 million increase in the Seven-Year Term Loan amount from $130 million to $160 million was funded at closing and was used to repay the Company’s then-outstanding revolving credit facility balance and secured debt maturities. The credit agreement for the Seven-Year Term Loan includes an accordion feature in which the total facility may be increased from $160 million to $300 million. Pricing ranges from a SOFR rate plus 1.70% to 2.65%, depending on the Company’s leverage ratio as calculated under the terms of the credit agreement. Following the completion of these refinancing transactions, the Company has no significant debt maturities until 2029, reinforcing Apple Hospitality's conservative, well-laddered debt maturity schedule and financial flexibility. The Company has extended the weighted average maturity of its total consolidated debt to nearly five years and has no outstanding borrowings under its revolving credit facility, preserving substantial available liquidity to support the Company’s long-term growth strategy. Capital Markets Share Repurchase Program The Company has in place a Share Repurchase Program that provides for share repurchases in open market transactions. The Company did not repurchase any common shares under the Share Repurchase Program during the three and six months ended June 30, 2026. As of June 30, 2026, the Company had approximately $242.5 million remaining under its Share Repurchase Program for the repurchase of shares. ATM Program The Company also has in place an at-the-market offering program (the "ATM Program"). No shares were sold under the ATM Program during the three and six months ended June 30, 2026. As of June 30, 2026, the Company had $500 million remaining under its ATM Program for the issuance of shares. Shareholder Distributions During the three months ended June 30, 2026, the Company paid distributions totaling $0.24 per common share. Based on the Company’s common stock closing price of $16.56 on August 3, 2026, the current annualized regular monthly cash distribution of $0.96 per common share represents an annual yield of approximately 5.8%. While the Company currently expects monthly distributions to continue, each distribution is subject to approval by the Company’s Board of Directors. The Company’s Board of Directors, in consultation with management, will continue to monitor the Company’s distribution rate and timing relative to the performance of its hotels, capital improvement needs, varying economic cycles, acquisitions, dispositions, other cash requirements and the Company’s REIT status for federal income tax purposes, and may make adjustments as it deems appropriate. Updated 2026 Outlook The Company is updating its operational and financial outlook for 2026. This outlook, which is based on management’s current view of both operating and economic fundamentals of the Company's existing portfolio of hotels, does not take into account any unanticipated developments in its business or changes in its operating environment, nor does it take into account any unannounced hotel acquisitions or dispositions. The revised guidance range reflects the Company's stronger-than-anticipated second quarter 2026 performance and an increase in its outlook for the remainder of the year, driven by improved business and leisure travel demand. The Company is encouraged by the setup for the remainder of the year, given the broad-based demand strength across its markets and upcoming favorable comparisons to prior periods impacted by government-related disruptions. As compared to the midpoint of previously provided 2026 guidance, the Company is increasing Net income by $10 million, increasing Adjusted EBITDAre by $17.5 million, increasing Comparable Hotels RevPAR Change by 225 bps, increasing Comparable Hotels Adjusted Hotel EBITDA Margin % by 75 bps, and increasing Capital expenditures by $5 million. Comparable Hotels RevPAR Change guidance, which is the change in Comparable Hotels RevPAR in 2026 compared to 2025, and Comparable Hotels Adjusted Hotel EBITDA Margin % guidance include properties acquired, as if the hotels were owned as of January 1, 2025, and exclude dispositions since January 1, 2025. Results for periods prior to the Company’s ownership are not included in the Company’s actual Consolidated Financial Statements, are based on information from the prior owner of each hotel, and have not been audited or adjusted. For the full year 2026, the Company anticipates its 2026 results will be in the following range: Second Quarter 2026 Earnings Conference Call The Company will host a quarterly conference call for investors and interested parties at 11 a.m. Eastern Time on Thursday, August 6, 2026. The conference call will be accessible by telephone and the internet. To access the call, participants from within the U.S. should dial 877-407-9039, and participants from outside the U.S. should dial 201-689-8470. Participants may also access the call via live webcast by visiting the Investor Information section of the Company's website at ir.applehospitalityreit.com. A replay of the call will be available from approximately 3 p.m. Eastern Time on August 6, 2026, through 11:59 p.m. Eastern Time on August 20, 2026. To access the replay, the domestic dial-in number is 844-512-2921, the international dial-in number is 412-317-6671, and the passcode is 13760939. The archive of the webcast will be available on the Company's website for a limited time. About Apple Hospitality REIT, Inc. Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust ("REIT") that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality’s portfolio consists of 216 hotels with approximately 29,500 guest rooms located in 83 markets throughout 37 states and the District of Columbia. Concentrated with industry-leading brands, the Company’s hotel portfolio consists of 114 Hilton-branded hotels, 96 Marriott-branded hotels, five Hyatt-branded hotels and one independent hotel. For more information, please visit www.applehospitalityreit.com. Apple Hospitality REIT Non-GAAP Financial Measures The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations ("FFO"); Modified FFO ("MFFO"); Earnings Before Interest, Income Taxes, Depreciation and Amortization ("EBITDA"); Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate ("EBITDAre"); Adjusted EBITDAre; Adjusted Hotel EBITDA; Comparable Hotels Adjusted Hotel EBITDA; and Same Store Hotels Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other operating GAAP measure. FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA, Comparable Hotels Adjusted Hotel EBITDA and Same Store Hotels Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company’s results between periods and with other REITs. Reconciliations of these non-GAAP financial measures to net income (loss) are provided in the following pages. Forward-Looking Statements Disclaimer This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically identified by use of statements that include phrases such as "may," "believe," "expect," "anticipate," "intend," "estimate," "project," "target," "goal," "plan," "should," "will," "predict," "potential," "outlook," "strategy," and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the ability of the Company 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 tariffs, 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; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a REIT. 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 press release 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. In addition, the Company’s qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended. Readers should carefully review the risk factors described in the Company’s filings with the Securities and Exchange Commission, including, but not limited to, those discussed in the section titled "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Any forward-looking statement that the Company makes speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law. For additional information or to receive press releases by email, visit www.applehospitalityreit.com. Apple Hospitality REIT, Inc.Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA(Unaudited) (in thousands) EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance. In addition to EBITDA, the Company also calculates and presents EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts ("Nareit"), which defines EBITDAre as EBITDA, excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), plus real estate related impairments, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company presents EBITDAre because it believes that it provides further useful information to investors in comparing its operating performance between periods and between REITs that report EBITDAre using the Nareit definition. The Company also considers the exclusion of non-cash straight-line operating ground lease expense and share-based compensation expense from EBITDAre useful, as these expenses do not reflect the underlying performance of the related hotels (Adjusted EBITDAre). The Company further excludes corporate expense, defined as actual corporate-level general and administrative expense, excluding share-based compensation expense, for the Company as well as Adjusted EBITDAre from the non-hotel property (the New York Property) from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control. The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels. In addition, Adjusted EBITDAre and Adjusted Hotel EBITDA are both components of key compensation measures of operational performance within the Company's 2026 incentive plan. The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA on a quarterly basis for 2025 and 2026: Apple Hospitality REIT, Inc.Reconciliation of Net Income to FFO and MFFO(Unaudited)(in thousands) The Company calculates and presents FFO in accordance with standards established by Nareit, which defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated affiliates. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company further believes that by excluding the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that report FFO using the Nareit definition. FFO as presented by the Company is applicable only to its common shareholders, but does not represent an amount that accrues directly to common shareholders. The Company calculates MFFO by further adjusting FFO for the exclusion of amortization of finance ground lease assets, amortization of favorable and unfavorable operating leases, net, non-cash straight-line operating ground lease expense, and share-based compensation expense, as these expenses do not reflect the underlying performance of the related hotels. The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance. In addition, MFFO is a component of a key compensation measure of operational performance within the Company's 2026 incentive plan. The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and six months ended June 30, 2026 and 2025: Apple Hospitality REIT, Inc.2026 Guidance Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA(Unaudited) (in thousands) The guidance of net income, EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA (and all other guidance given) are forward-looking statements and are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause actual results and performance to differ materially from those expressed or implied by these forecasts. Although the Company believes the expectations reflected in the forecasts are based upon reasonable assumptions, there can be no assurance that the expectations will be achieved or that the results will not be materially different. Risks that may affect these assumptions and forecasts include, but are not limited to, the following: changes in political, economic, competitive and specific market conditions; the amount and timing of announced or future acquisitions and dispositions of hotel properties; the level of capital expenditures may change significantly, which will directly affect the level of depreciation expense, interest expense and net income; the amount and timing of debt repayments may change significantly based on market conditions, which will directly affect the level of interest expense and net income; the amount and timing of transactions involving the Company's common stock may change based on market conditions; and other risks and uncertainties associated with the Company's business described herein and in filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The following table reconciles the Company’s GAAP net income guidance to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted Hotel EBITDA and Comparable Hotels Adjusted Hotel EBITDA guidance for the year ending December 31, 2026: View source version on businesswire.com: https://www.businesswire.com/news/home/20260804020158/en/ Contacts Apple Hospitality REIT, Inc.Kelly Clarke, Vice President, Investor [email protected]

S&P Global Inc. SPGI is scheduled to release second-quarter 2026 results on July 28, before market open. SPGI has a decent history of earnings surprises, having surpassed the Zacks Consensus Estimate in the past three trailing quarters and missing once, with an average surprise of 3.6%. S&P Global Inc. price-eps-surprise | S&P Global Inc. Quote The Zacks Consensus Estimate for revenue is pegged at $3.7 billion, indicating a 2.9% decline from the year-ago quarter’s actual. The consensus mark for revenues from market intelligence is close to $1.3 billion, which is indicated to improve 3.6% year over year. Growth in this segment is likely to have been attributed to product strength, fast-paced AI integration, strategic M&A, and robust commercial sales. Strong renewals and net sales across the franchise are anticipated to have driven subscription revenues. The With Intelligence buyout is expected to have provided a continued impetus to the segment’s growth. For ratings, the Zacks Consensus Estimate for revenues is set at $1.3 billion, a 14.4% jump from the year-ago actuals. Expansion in transactional and non-transactional revenues is anticipated to have improved this segment’s growth. Transactional revenues are likely to have been supported by rising billed issuance, driven by solid investment-grade debt activity. Higher annual fees and strong CRISIL performance are relevant factors expected to have improved non-transactional revenues. The Zacks Consensus Estimate for mobility revenues is set at $473 million, up 8% year over year. Solid subscription momentum, coupled with customer wins across CARFAX and automotiveMastermind, is expected to have supported this segment’s growth. Momentum in subscription adoption and discretionary spending is likely to have aided manufacturing revenues, adding to the segment’s growth. The consensus mark for revenues from indices is pinned at $534.8 million. It is anticipated to improve 19.9% year over year. Asset-linked fees and consistent net inflows into the S&P 500 are expected to have been the primary factors improving the segment’s revenues. Other factors, including high trading volumes, innovation in decentralized finance and robust business demand in data and custom subscriptions, are likely to have contributed to growth. The consensus estimate for earnings per share is set at $4.49, indicating a 1.4% increase on a year-over-year basis. Our proven model does not conclusively predict an earnings beat for S&P Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter. SPGI has an Earnings ESP of 0.00% and a Zacks Rank of 5 (Strong Sell). Here are a few stocks that, according to our model, have the right combination of elements to beat on earnings this time around. Chatham Lodging Trust CLDT: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is $86.9 million, suggesting an 8.2% year-over-year rise. For earnings, the consensus estimate is kept at 45 cents per share, indicating a 25% uptick from the year-ago quarter’s actual. The company beat the consensus estimate in the trailing four quarters, with an average surprise of 15.6%. CLDT has an Earnings ESP of +2.22% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. The company is scheduled to declare second-quarter 2026 results on Aug. 4. Apple Hospitality REIT APLE: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $393.7 million, indicating year-over-year growth of 2.4%. For earnings, the consensus estimate is 49 cents, suggesting a 4.3% gain from the year-ago quarter’s reported figure. The company beat the consensus estimate in the trailing quarters, with an average of 4.5%. APLE has an Earnings ESP of +2.04% and a Zacks Rank of 1 at present. The company is scheduled to declare second-quarter 2026 results on Aug. 5. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report S&P Global Inc. (SPGI) : Free Stock Analysis Report Chatham Lodging Trust (REIT) (CLDT) : Free Stock Analysis Report Apple Hospitality REIT, Inc. (APLE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Apple Hospitality REIT stock has delivered a solid 49.9% total return over the past five years, and the current valuation picture suggests the shares screen as undervalued on earnings multiples but with only a mixed overall value score. Around 49.9% total return over five years points to shareholders being rewarded for staying invested over a full cycle. For a hotel focused REIT, expectations around steady occupancy and room rates can support the share price, while any sustained pressure on cash flows or refinancing costs may weigh on what investors are willing to pay. Apple Hospitality REIT scores 4 out of 6 on the valuation checks, which presents a mixed picture rather than a clear bargain or a clearly expensive stock. The issue now is whether Apple Hospitality REIT's current price of US$16.34 still leaves enough valuation upside to attract new investors after this run. Find out why Apple Hospitality REIT's 46.1% return over the last year is lagging behind its peers. The P/E ratio suits Apple Hospitality REIT because earnings are a key reference point for many investors in income focused real estate stocks. On this metric, Apple Hospitality REIT trades at about 22.4x earnings, which is above the Hotel and Resort REITs industry average of roughly 15.1x but well below the peer group average of about 43.9x. The fair P/E that reflects Apple Hospitality REIT's profile is estimated at around 33.8x. The current 22.4x level is materially lower than that tailored benchmark. That gap suggests the market is pricing the stock at a discount to what this model implies based on factors such as sector, profitability and risk. On the P/E multiple, Apple Hospitality REIT stock appears undervalued relative to the fair ratio implied by its fundamentals and peer group. See what the numbers say about this price — find out in our valuation breakdown. For Apple Hospitality REIT, Simply Wall St Narratives sit between the current valuation puzzle and the assumptions that might justify a higher or lower share price, spelling out what would need to happen to future growth, margins and earnings for each scenario. Each narrative ties a fair value estimate to a specific view of Apple Hospitality REIT's potential catalysts and risks, so you can see over time which version of the story appears to be taking shape on the Community page. You can add your voice to the Apple Hospitality REIT story by sharing a Narrative that lays out your number driven view on where its growth, margins and execution go from here. Set out your thesis in the Simply Wall St community and see how it holds up as new data arrives. Do you think there's more to the story for Apple Hospitality REIT? Head over to our Community to see what others are saying! For Apple Hospitality REIT, the key takeaway is that the earnings multiple points to the stock trading on an undervalued P/E compared with a tailored fair ratio and parts of its peer group. The broader checks are more mixed, so the valuation case is not one sided and still leaves room for debate. From here, what matters most is whether Apple Hospitality REIT can sustain the earnings profile that underpins that P/E gap, or whether investors decide the discount is deserved given the risks around cash flows and refinancing costs for hotel focused REITs. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include APLE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

RevPAR growth: Apple Hospitality delivered a strong Q1 with comparable hotels RevPAR up 2.2% to $115 (same-store RevPAR nearly 3%) and March RevPAR accelerating 5.8%, with weekday and weekend occupancy and ADR improving as the quarter progressed. Guidance nudged higher but cautious tone maintained: Management raised full‑year RevPAR guidance 100 basis points to a 1% midpoint (comparable hotels RevPAR guidance 0%–2%) and provided adjusted EBITDARE guidance of $436M–$458M while emphasizing conservative assumptions amid macro and geopolitical uncertainty. Prudent capital allocation and solid liquidity position: The REIT has about $1.6B debt (~3.4x EBITDA) with a 4.6% average rate and $559M revolver available, expects $80M–$90M in FY capex, is not pursuing acquisitions in 2026, and favors returning capital (paid ~$57M in Q1 distributions) over buying assets at current prices. Interested in Apple Hospitality REIT, Inc.? Here are five stocks we like better. Apple Hospitality REIT (NYSE:APLE) reported first-quarter 2026 results that management said exceeded expectations, prompting the lodging REIT to raise its full-year RevPAR outlook while maintaining what executives characterized as a measured stance given ongoing macro and geopolitical uncertainty. Chief Executive Officer Justin Knight said the company delivered “a strong start to the year,” citing comparable hotels RevPAR growth of more than 2% despite “challenging year-over-year comparisons to the first quarter of 2025.” He added that roughly two-thirds of the portfolio posted RevPAR growth, and that on a same-store basis RevPAR rose nearly 3% with margin expansion. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Chief Financial Officer Liz Perkins said comparable hotels RevPAR for the quarter was $115, up 2.2%. ADR was $157, up 0.1%, and occupancy increased 2.1 percentage points to 73%. Perkins attributed the quarter’s improving trend to a strong finish to February and acceleration into March, adding that March RevPAR rose 5.8% year over year. Perkins detailed the month-to-month pattern: January comparable hotels RevPAR declined 1.6%, which she said was driven in part by a difficult comparison to early 2025, including wildfire-related recovery business. February RevPAR rose 1.5% despite some weather disruption, and March delivered the strongest results. Excluding California hotels that benefited from wildfire recovery demand last year, Perkins said first-quarter RevPAR grew 3%. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Perkins also said weekday occupancy increased 170 basis points and weekend occupancy increased 270 basis points. ADR trends improved as the quarter progressed, with weekday ADR turning positive in March and weekend ADR rising 3.5% in March. Excluding the Los Angeles and Washington, D.C., markets—where comparisons were affected by wildfire recovery and inauguration-related demand—both weekday and weekend ADR grew more than 1% for the quarter, according to Perkins. Comparable hotels total revenue increased 4.3% to $337 million, which Perkins said was supported by a 10% increase in other revenues. She said the company’s “efficient operating models” and “disciplined expense management” helped convert top-line gains into bottom-line growth. → Tyson Foods' Total Returns: Tasty Treats for Income Investors? Comparable hotels adjusted hotel EBITDA was $108 million, up 3.6%, and the adjusted hotel EBITDA margin was 32.2%, down 20 basis points. Perkins said results were affected by the ongoing ramp of the recently opened Motto by Hilton Nashville Downtown and the seasonal impact of Hotel 57. On a same-store basis excluding the Motto property, the Hotel 57 transition, and the recently acquired Homewood Suites by Hilton Tampa-Brandon, Perkins said RevPAR grew 2.8%, total revenue rose 3.1%, and adjusted hotel EBITDA increased 4.2% with 30 basis points of margin expansion. On the cost side, Perkins said same-store total hotel expenses rose 2.6% and were slightly lower year over year on a cost-per-occupied-room (CPOR) basis. Same-store variable hotel expense per occupied room increased 0.3%, and total payroll per occupied room was $43, up 1%. She added that contract labor fell to under 7% of total same-store wages, down 80 basis points year over year, while fixed same-store hotel expenses declined 1.5% due to a favorable property insurance comparison and property tax appeals. For company-wide profitability metrics, Perkins reported adjusted EBITDARE of approximately $101 million, up 2.2%, and modified funds from operations (MFFO) of approximately $80 million, or $0.34 per share, up 1.9% and 3%, respectively. Knight said demand momentum continued into the second quarter, with preliminary April results indicating comparable hotels RevPAR growth of more than 4%. He attributed the comparison in part to disruption and uncertainty tied to prior-year government policy-related announcements, while noting that the conflict in the Middle East and its impact on energy markets added to an uncertain backdrop. Reflecting year-to-date performance, Knight said Apple Hospitality raised its full-year RevPAR guidance “100 basis points to 1% at the midpoint.” Perkins provided updated guidance ranges, saying the company expects: Net income of $143 million to $169 million Comparable hotels RevPAR change of 0% to 2% Comparable hotels adjusted hotel EBITDA margin of 32.9% to 33.9% Adjusted EBITDARE of $436 million to $458 million Perkins said guidance assumes total hotel expenses increase about 3% at the midpoint, or 2% on a CPOR basis. She also said the company achieved a favorable property insurance renewal that will generate incremental savings versus initial expectations, quantifying the benefit as about a $900,000 improvement from the second quarter through year-end. During Q&A, management emphasized that its updated outlook may not fully reflect potential upside. Knight said transient demand has been stronger than expected and that early summer performance could benefit from incremental leisure travel tied to the FIFA World Cup. Perkins said the company is encouraged by improvement in government demand as it laps earlier-year headwinds related to “DOGE and Liberation Day,” noting that in March and April the company was able to accept incremental government demand as occupancy increased. Addressing consumer behavior, Knight said the company is “not currently seeing significant price sensitivity,” and suggested that as the company enters higher-occupancy months, more of the growth could come from rate, which would support margins. Knight said Apple Hospitality completed the sale of a Hampton Inn & Suites in Rochester, Minnesota, in April for approximately $9 million. He described the pricing as a 5% cap rate or 14.5x EBITDA multiple before CapEx, and a 4% cap rate or 19.6x EBITDA multiple after factoring in an estimated $3 million of anticipated capital improvements. Management also highlighted performance of recent acquisitions. Knight said the Embassy Suites in Madison, Wisconsin, improved after completing its first full year of operations, while the AC Hotel in Washington, D.C. produced full-year 2025 RevPAR of $205 and a 43% house profit margin despite reduced government travel and a weaker convention calendar last year. He added that the Nashville Motto has been ramping, with average RevPAR approaching $200 in recent weeks, and that the Homewood Suites Tampa-Brandon has produced strong yields ahead of a renovation and repositioning planned for this summer. Looking ahead, Knight said the REIT has forward contracts for two development projects: an AC in Anchorage, Alaska, which has broken ground and is expected to be delivered in May 2027, and a dual-brand AC and Residence Inn in Las Vegas expected to be completed in the second quarter of 2028, with construction not yet started. He said the company has no agreements for acquisitions in 2026, arguing that the “current transaction environment does not yet support accretive opportunities relative to our cost of capital.” In response to questions about acquisitions, Knight said the company is seeing improving buyer interest but still views its own shares as a more attractive use of capital than acquiring assets at current pricing, given a “meaningful gap” between seller expectations and what Apple Hospitality is willing to pay. On the disposition side, he said the company is seeing an increased number of potential buyers engaging with marketed assets, and noted that recent successful dispositions have often been to local owner-operators who underwrite differently than cap-rate buyers. For capital reinvestment, Knight said the company expects to spend $80 million to $90 million for the full year, including major renovations at 21 hotels. First-quarter capital expenditures totaled about $27.5 million, according to Knight. On shareholder returns, Knight said the company paid approximately $57 million of distributions in the first quarter, or $0.24 per common share, and noted that the annualized regular monthly distribution of $0.96 per share implied an annual yield of about 7.2% based on the prior Friday’s closing stock price. Perkins said that as of March 31, 2026, the company had about $1.6 billion of total debt outstanding, or roughly 3.4x trailing 12-month EBITDA, with a weighted average interest rate of 4.6% and a weighted average maturity of about three years. She said 63% of debt was fixed or hedged, with $8 million of cash on hand and $559 million available under the revolving credit facility. Perkins added that the company had 207 unencumbered hotels at quarter end and said discussions were ongoing with unsecured lenders regarding scheduled debt maturities this year. Perkins also noted an accounting presentation change effective Jan. 1, 2026: the company began excluding share-based compensation expense from the calculation of adjusted EBITDA and MFFO, describing it as non-cash and consistent with covenant calculations and peer practices. Apple Hospitality REIT (NYSE: APLE) is a publicly traded real estate investment trust that focuses on acquiring, owning and operating high-quality, upscale, select-service hotels. The company's portfolio primarily consists of properties operated under premium franchise agreements with leading lodging brands such as Marriott, Hilton and Hyatt. Apple Hospitality REIT is self-managed and internally advised, overseeing property management, revenue optimization and asset-level operations through its in-house team of hospitality professionals. The company's holdings encompass over 200 hotels featuring more than 30,000 guest rooms across a diverse array of markets in the United States. The article "Apple Hospitality REIT Q1 Earnings Call Highlights" was originally published by MarketBeat.