Apple Hospitality Reit, Inc. · NYSE:APLE
Apple Hospitality Reit — Q1 2025 Earnings Presentation
52 slides from Apple Hospitality Reit's earnings presentation, May 2, 2025
Slide 1: Investor Presentation May 2025
IN VE ST O R PRESENTATION M AY 2 0 2 5 • N Y S E : A P L E
Slide 2: Forward-Looking Statements
F O R WA R D - L O O K I N G S TAT E M E N T S Certain statements made in this presentation are forward-looking statements. These forward-looking statements include statements regarding our intent, belief or current expectations and are based on various assumptions. These statements involve substant
Slide 3: Company Profile and Proven Investment Strategy
C O M PA N Y P R O F I L E A N D P R O V E N I N V E S T M E N T S T R AT E G Y Apple Hospitality is a publicly traded real estate investment trust that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Scale Ownership of Upscale, Industry-Lea
Slide 4: Company Overview
C O M PA N Y O V E R V I E W $1.4 Billion $1.61 $243.7 Million IN REVENUE 2 0 2 4 M F F O P E R S H A R E (1) D I S T R I B U T I O N S PA I D Full Year 2024 $0.89 Net Income Per Share In 2024 +20.1 ppts +18.9 ppts +21.4 ppts TSR Outperformance vs. Nareit Lodging/Resorts Index TSR Outperformance vs.
Slide 5: Mission and Values
MANAGEMENT TEAM WITH DEEP INDUSTRY E X P E R I E N C E O V E R M U LT I P L E H O T E L C Y C L E S • Average executive tenure with the Apple REIT MISSION We are a leading real estate investment Companies is 18 years company committed to increasing shareholder • Established and operated 8 public hos
Slide 6: Proven Investment Strategy
P R O V E N I N V E S T M E N T S T R AT E G Y • Efficient operating model yields higher margins • Resilient group business ✓ Concentrate on Upscale, • Scale ownership minimizes relative G&A load and provides rooms-focused hotels fixed cost efficiencies • Unparalleled access to data and operational
Slide 7: Key Takeaways
KEY TAKEAWAYS • Achieved first quarter 2025 Comparable Hotels RevPAR of $111, Occupancy of 71% and ADR of $157 • Although a variety of factors weighed on hotel performance during the first quarter 2025 and Comparable Hotels RevPAR modestly declined 0.5% compared to the first quarter of 2024, demand
Slide 8: First Quarter 2025 Performance at a Glance
YEAR-OVER-YEAR PERFORMANCE First Quarter 2025 Performance at a Glance ($ in thousands except statistical data and per share amounts) Three Months Ended March 31, % CHANGE 2025 2024 to 2024 Comparable Hotels ADR $156.56 $155.05 1.0% Comparable Hotels Occupancy 71.1% 72.2% (1.5%) Comparable Hotels Rev
Slide 9: Rooms-focused operating model produces strong margins
E F F I C I E N T O P E R AT I O N S Rooms-focused operating model produces strong margins 2024 Hotel EBITDA Margin and RevPAR Comparison 36% 36% 35% 29% 29% 28% 27% 27% 26% 25% 25% $216 $205 $214 $212 $187 $172 $136 $145 $124 $134 $119 APLE (1) INN CLDT HST RLJ DRH PK AHT SHO PEB XHR RevPAR Upscale
Slide 10: Net Debt to EBITDA Comparison
N E T D E B T T O E B I T D A C O M PA R I S O N Low leverage has always been a key component of our strategy, providing stability and optionality across economic cycles Net Debt to TTM EBITDA Ratio at March 31, 2025 12.1x 7.3x 6.8x 5.4x 5.7x 5.2x 3.3x 3.3x 3.4x 3.6x 2.8x HST APLE (1) SHO DRH CLDT R
Slide 11: Comparable Hotels Operating Trends
C O M PA R A B L E H O T E L S O P E R AT I N G T R E N D S Occ ADR RevPAR 100% $168 $163 $163 $165 $161 $164 $167 $161 $159 $162 90% $156 $149 $148 $145 $140 80% $136 $133 $127 $128 $129 $128 $125 $125 $124 70% $115 $117 $107 60% $94 $94 $88 50% 40% 30% 20% 10% 65% 74% 78% 80% 79% 81% 78% 78% 76% 8
Slide 12: Comparable Hotels Occupancy Trends
C O M PA R A B L E H O T E L S O C C U PA N C Y T R E N D S Continued Strength in Comparable Hotels Occupancy 100% 90% 80% 81% 80% 80% 79% 80% 80% 78% 79% 78% 78% 77% 79% 80% 76% 77% 75% 74% 73% 74% 72% 70% 65% 62% 64% 60% Occupancy 50% 40% 30% 20% 10% 0% Week ended Jan 2024 Feb 2024 Mar 2024 Apr 20
Slide 13: Weekday vs. Weekend Occupancy
W E E K D AY V S . W E E K E N D O C C U PA N C Y Continued Strength in Absolute Weekday and Weekend Occupancy Weekday Weekend 100% 88% 88% 90% 85% 84% 86% 85% 86% 84% 83% 82% 83% 84% 81% 81% 81% 76% 76% 78% 76% 80% 78% 76% 76% 78% 77% 78% 80% 77% 78% 80% 73% 75% 76% 74% 74% 74% 72% 72% 72% 73% 69%
Slide 14: Portfolio Poised for Continued Outperformance
PORTFOLIO POISED FOR CONTINUED OUTPERFORMANCE • Balanced exposure to business, leisure and group • Select-service hotels franchised with industry-leading brands provide strong value proposition and have proven appeal with broadest group of customers • Broad geographic diversification provides exposu
Slide 15: Positioned for Outperformance Across Cycles
POSITIONED FOR OUTPERFORMANCE ACROSS CYCLES Limited near-term portfolio impact from new supply High margins drive profitability Embedded Business transient demand continues to improve upside Balance sheet strength and liquidity for opportunistic transactions potential Outperformance across cycles Se
Slide 16: Benefits of Branded Select-Service Hotels
BENEF ITS OF BRAND ED SELEC T-SERV IC E HOTELS Efficient Operating Model Broad Consumer Appeal Maximize Shareholder Value • Total revenue primarily derived • High-quality hotels with strong • Ability to optimize mix of business from rooms sold value proposition for guests to drive RevPAR and EBITDA
Slide 17: Broad Consumer Appeal
BROAD CONSUMER APPEAL Rooms-focused hotels with industry-leading brands have broad consumer appeal HOMEWOOD SUITES RALEIGH-DURHAM AP/RESEARCH TRIANGLE COURTYARD SYRACUSE DOWNTOWN AT ARMORY SQUARE Independent Note: Hotel portfolio statistics as of May 1, 2025. Based on number of guest rooms. 17 HILTO
Slide 18: Modern Accommodations and Amenities
M O D E R N A C C O M M O D AT I O N S A N D A M E N I T I E S WITH BROAD CONSUMER APPEAL 18
Slide 19: Broad Geographic Diversification
B R O A D G E O G R A P H I C D I V E R S I F I C AT I O N Diversification across 85 markets helps drive strong, consistent performance ✓ Broad geographic diversification provides exposure to wide variety of demand generators ✓ Markets benefit from a mix of business and leisure demand 5% ✓ Portfolio
Slide 20: High-Density Suburban
M A R K E T S T R AT E G Y HIGH-DENSITY SUBURBAN Properties ideally located in upscale submarkets with attractive cost structures that benefit from a broad mix of business and leisure demand generators and resilient group business. With proximity to an array of guest amenities and conveniences, thes
Slide 21: Urban
M A R K E T S T R AT E G Y URBAN Properties located in business-friendly cities leading the recovery. Beneficiaries of demographic shifts and economic development, these urban locations are home to numerous demand generators, not heavily dependent on inbound international travel and poised for conti
Slide 22: Strong Operating Margins
S T R O N G O P E R AT I N G M A R G I N S APLE is well positioned to maximize efficiencies and drive profitability: • Broad consumer appeal allows for optimization of business mix as recovery continues to drive ADR and RevPAR growth APLE has a proven record of • Rooms-focused hotels are inherently
Slide 23: Limited Near-Term Impact from New Supply
L I M I T E D N E A R - T E R M I M PA C T F R O M N E W S U P P LY Supply growth well below historical average for our portfolio Portfolio Exposure to New Supply 80% New construction starts have meaningfully decreased since onset of pandemic with anticipated delays in 70% completion 60% 58% of our
Slide 24: Industry-Leading Asset Management
I N D U S T R Y- L E A D I N G A S S E T M A N A G E M E N T Best-in-Class Operators • 100% of Apple Hospitality’s Strategic Asset Management Approach portfolio operated by third-party property managers • Analytical, data-driven asset management to maximize property-level performance • 94% of hotels
Slide 25: Proprietary Management Agreement Structure
P R O P R I E TA R Y M A N A G E M E N T A G R E E M E N T S T R U C T U R E Our unique management company contract structure better aligns owner and operator to maximize performance in all market environments. AC HOTEL PITTSBURGH DOWNTOWN APLE’s Management Company Contract Structure Industry Standa
Slide 26: Balance Sheet Poised for Future Growth
BALANCE SHEET POISED FOR FUTURE GROWTH • Positive corporate cash flow early in the recovery preserved strength of balance sheet and equity value • Conservative capital structure with staggered maturities lowers capital costs • During Q4 2023, the Company sold approximately 12.8 million shares under
Slide 27: Strong Balance Sheet & Liquidity Position
STRONG BALANCE SHEET & LIQUIDITY POSITION Low debt and staggered maturities facilitate agile balance sheet strategy Strong liquidity position for opportunistic growth Debt Composition(1) Debt Maturity Schedule (1) ($ in millions) Total Liquidity (1) ($ in millions) Hotels: 4 Keys: 798 Rate: 3.8% Ter
Slide 28: Effective Portfolio Management & Strategic Growth
EFFECTIVE PORTFOLIO MANAGEMENT & S T R AT E G I C G R O W T H Opportunistic Dispositions Accretive Acquisitions Strategic Growth ▪ Reduce exposure to lower growth ▪ Invest in hotels and markets with markets greater growth potential ▪ Dispose of hotels where strong ▪ Acquire assets in strong RevPAR E
Slide 29: Value Creation Through Disciplined Capital Allocation and Portfolio Management
VA L U E C R E AT I O N T H R O U G H D I S C I P L I N E D C A P I TA L A L L O C AT I O N A N D P O R T F O L I O M A N A G E M E N T Post Pandemic Strategic Acquisitions and Opportunistic Dispositions Disciplined Capital Allocation Enhance Portfolio Value January 2023 through March 2025 Pre-COVID
Slide 30: Net Acquirers Since Onset of Pandemic
N E T A C Q U I R E R S I N C E O N S E T O F PA N D E M I C Our acquisition and disposition activity since the start of the pandemic has optimized our portfolio by lowering the average age of our assets, reducing near-term CapEx and increasing exposure to markets we anticipate will outperform over
Slide 31: Recent Acquisition Activity
RECENT ACQUISITION ACTIVITY 22 Hotels Acquired Since 2020 Hotels Under Contract for Purchase(3) Anticipated Brand Location Rooms Date Opened Date Acquired Purchase Price Brand Location Rooms Date Opened Purchase Price Acquisition Date Hampton Inn & Suites(1)(2) Cape Canaveral, FL 116 April 2020 Apri
Slide 32: Recent Disposition Activity
RECENT DISPOSITION ACTIVITY 35 Hotels Sold Since 2020 Hotels Under Contract for Sale(1) Age at Time of Anticipated Brand Location Rooms Date Sold Sales Price Brand Location Rooms Age Sales Price Sale Sale Date SpringHill Suites Sanford, FL 105 20 yrs January 2020 $13.0 million Marriott Houston, TX 2
Slide 33: Recent Acquisitions
RECENT ACQUISITIONS • Acquired March 2024 • 234-room AC Hotel by Marriott® Washington DC Convention Center • Hotel opened in October 2020 • Total price: $116.8 million, or approximately $499,000 per key • Additional meaningful sources of revenue at the property include retail spaces, rooftop restaur
Slide 34: Recent Acquisitions
RECENT ACQUISITIONS • Acquired June 2024 following completion of construction • 262-room Embassy Suites by Hilton® Madison Downtown • Total price: $79.5 million or approximately $303,000 per key • Forward commitment with trusted developer • Location type: Urban • Primary demand generators: • Univers
Slide 35: Acquisitions Under Contract
ACQUISITIONS UNDER CONTRACT • 126 rooms • Gross purchase price: $18.8 million or approximately $149,000 per key • Anticipated closing date June 2025 • Adjacent to the Company’s Embassy Suites Tampa Brandon, the hotel was offered for sale by a loan servicer and the purchase price represents a strong
Slide 36: Acquisitions Under Contract
ACQUISITIONS UNDER CONTRACT Renderings • Hotel under development with anticipated completion of construction in late 2025 • 260 rooms(2) • Anticipated gross purchase price: $98.2 million or approximately $378,000 per key • Forward commitment with trusted developer • Ideally located in downtown Nashv
Slide 37: Apple REIT Companies Transaction History
25-YEAR TRACK RECORD OF HOTEL TRANSACTIONS Apple REIT Companies Transaction History 1999 – May 1, 2025 456 T O TA L H O T E L S A C Q U I R E D Having purchased as many as 74 hotels 236 in a single year through T O TA L H O T E L S S O L D individual hotel and small 220 portfolio transactions, Apple
Slide 38: Well-Maintained Portfolio
W E L L - M A I N TA I N E D P O R T F O L I O WELL-MAINTAINED, INSTITUTIONAL-QUALITY PORTFOLIO ✓ Consistent reinvestment enhances long-term value and leads to traveler satisfaction outperformance ✓ Experienced team utilizes advantages of scale ownership to control costs and maximize impact of dolla
Slide 39: U.S. Hotel Forecast
U.S. HOTEL FORECAST U.S. Hotel Forecast 2024 2025 2026 Actual Forecast Forecast Occupancy 63.0% 63.1% 63.1% ADR Change +1.7% +1.6% +2.0% RevPAR Change +1.8% +1.8% +2.1% Source: STR; © 2025 CoStar Group; Tourism Economics. Published January 2025. 39 RESIDENCE INN PHOENIX NORTH/HAPPY VALLEY
Slide 40: Corporate Responsibility Initiatives
CORPORATE RESPONSIBILITY INITIATIVES We own one of the largest and most geographically diverse portfolios of rooms-focused hotels in the United States and are dedicated to making a positive impact on the many communities our hotels serve. We are mindful of our environmental footprint and committed t
Slide 41: Environmental Stewardship
E N V I R O N M E N TA L S T E WA R D S H I P Apple Hospitality is committed to enhancing and incorporating sustainability opportunities into our investment and asset management strategies, with a focus on minimizing our environmental impact through reductions in energy and water usage and through i
Slide 42: Social Responsibility
SOCIAL RESPONSIBILITY Key Metrics for Apple Hospitality since 2017 We are thoughtful in our interactions with The Company has in place a Health, Safety others and know that strong, caring relationships are the core of our industry. 850+ and Well-Being Policy, a Human Rights Policy and a Vendor Code
Slide 43: Governance
GOVERNANCE Corporate Governance Aligns with Shareholders • Audit, Compensation and Corporate Governance Committees are independent • Regular executive sessions of independent directors • De-staggered Board allows for annual elections of directors • Required resignation of an incumbent director not r
Slide 44: Appendix
APPENDIX COURTYARD VIRGINIA BEACH OCEANFRONT/SOUTH
Slide 45: Comparable Hotels Quarterly Operating Metrics
C O M PA R A B L E H O T E L S Q U A R T E R LY O P E R AT I N G M E T R I C S COMPARABLE HOTELS QUARTERLY OPERATING METRICS AND STATISTICAL DATA (Unaudited) (in thousands, except statistical data) 2024 2025 Q1 Q2 Q3 Q4 Q1 Operating income (Actual) $71,615 $93,515 $77,726 $49,903 $50,859 Operating m
Slide 46: Same Store Hotels Quarterly Operating Metrics
S A M E S T O R E H O T E L S Q U A R T E R LY O P E R AT I N G M E T R I C S SAME STORE HOTELS QUARTERLY OPERATING METRICS AND STATISTICAL DATA (Unaudited) (in thousands, except statistical data) 2024 2025 Q1 Q2 Q3 Q4 Q1 Operating income (Actual) $71,615 $93,515 $77,726 $49,903 $50,859 Operating ma
Slide 47: Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA
R E C O N C I L I AT I O N O F N E T I N C O M E T O E B I T D A , E B I T D A r e , ADJUSTED EBITDAre AND ADJUSTED HOTEL EBITDA THE FOLLOWING TABLE RECONCILES THE COMPANY’S GAAP NET INCOME TO EBITDA, EBITDAre, ADJUSTED EBITDAre AND ADJUSTED HOTEL EBITDA ON A QUARTERLY BASIS FOR 2024 AND 2025 (Unaud
Slide 48: Reconciliation of Net Income to FFO and MFFO
R E C O N C I L I AT I O N O F N E T I N C O M E T O F F O A N D M F F O THE FOLLOWING TABLE RECONCILES THE COMPANY’S GAAP NET INCOME TO FFO and MFFO ON A QUARTERLY BASIS FOR 2024 and 2025 (Unaudited) (in thousands, except per share amounts) 2024 2025 Q1 Q2 Q3 Q4 Q1 Net income $54,050 $73,931 $56,26
Slide 49: Definitions
DEFINITIONS 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 Amorti
Slide 50: Definitions Continued
DEFINITIONS CONTINUED FFO and MFFO The Company calculates and presents FFO in accordance with standards established by Nareit, which defines FFO as net income (loss) (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains and losses from the sale of certain r
Slide 51: Trademark Information
T R A D E M A R K I N F O R M AT I O N “AC Hotels by Marriott®,” “Aloft Hotels®,” “Courtyard by Marriott®,” “Fairfield by Marriott®,” “Fairfield Inn by Marriott®,” “Fairfield Inn & Suites by Marriott®,” “Marriott® Hotels,” “Residence Inn by Marriott®,” “SpringHill Suites by Marriott®,” and “TownePla
Slide 52: Apple Hospitality REIT, Inc.
Apple Hospitality REIT, Inc. 814 East Main Street Richmond, VA 23219 (804) 344-8121 info@applehospitalityreit.com www.applehospitalityreit.com HAMPTON INN & SUITES OMAHA-DOWNTOWN 52
Apple Hospitality REIT — Q1 2025 Earnings Presentation on 6ix