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.
First-quarter performance and demand trends
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.
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%.
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.
Revenue, margins, and expense management
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.
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.
Guidance raised as management cites conservative assumptions
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.
Portfolio activity, capital spending, balance sheet, and transactions
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.
About Apple Hospitality REIT NYSE: APLE
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.
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