Apple Hospitality REIT, Inc. Q1 FY2026 earnings call

• Strong start to 2026 with comparable hotels rep part growth despite challenging comps. - Demand momentum continued into Q2 with April REBPAR growth over 4%. - Raised full-year REBPAR guidance 100 basis points to 1% midpoint. - Completed sale of Hampton Inn and Suites in Rochester, MN for ~$9M. - Recent acquisitions performing well: Embassy Suites in Madison improved, BAC Hotel in DC had solid results, Nashville motto ramping well, Homewood Suites Tampa branded strong. - Forward contracts for two development projects: AC in Anchorage expected 2027, dual brand AC and Residence Inn in Las Vegas expected 2028. - Expect to reinvest $80 - $90M full year, including major renovations at 21 hotels. - Returned capital to shareholders with $57M in distributions in Q1. - Transitioned 13 Marriott managed hotels to franchise, seeing initial positive results.

Comparable hotels rep part growth of more than 2% in Q1 2026. Comparable hotels RevPAR was $115, up 2.2% in Q1. ADR was $157, up 0.1%. Occupancy was 73%, an increase of 2.1%. Comparable Hotels' total revenue was up 4.3% to $337 million in Q1. Comparable Hotels' adjusted hotel EBITDA was $108 million, up 3.6% with an adjusted hotel EBITDA margin of 32.2%. Same store RevPar grew by 2.8% in Q1 with same store total revenue growing 3.1% and same store adjusted hotel EBITDA growing 4.2% with 30 basis points of margin expansion. Approximately two-thirds of hotels delivered RevPar growth. Markets like Pittsburgh grew 23%, Alaska 21%, Seattle 18%, Palm Beach 16%, Memphis 14% in Q1.

• Raised full-year REBPAR guidance 100 basis points to 1% at midpoint. - Full-year net income expected between $143M - $169M. - Comparable hotels rev par change expected between 0% - 2%. - Comparable hotels adjusted hotel EBITDA margin expected between 32.9% - 33.9%. - Adjusted EBITDA RE expected between $436M - $458M. - Assumed total hotel expenses increase ~3% at midpoint (2% on CPOR basis). - Guidance could be conservative due to stronger than anticipated transient demand, early summer potential from FIFA World Cup, and easier comps.

• Ongoing conflict in Middle East and effects on global energy markets create uncertain geopolitical and economic backdrop. - Seller expectations vs buyer willingness to pay gap in transaction market. - Potential cost line item shifts impacting expense outlook. - Market conditions and pricing fluctuations affecting acquisition and disposition opportunities.

Q: To the extent that you do see more ADR growth moving forward, does the margin guidance assume rep part growth is driven entirely by occupancy or is it a composition of the two?

A: Generally, guidance looks at recent trends. Balance between occupancy and ADR for remainder of year at midpoint similar to initial anticipation, but could drive more rate as comps lap.

Q: What are you seeing from price sensitivity perspective and potential impact on demand?

A: Not seeing significant price sensitivity. Guidance is conservative, but anticipate growth from rate in higher occupancy months.

Q: Unpack potential upside from lapping easier government demand comps and World Cup leisure demands.

A: Encouraged by improvement in government demand, but comps fluid. World Cup bookings mostly domestic, potential incremental if international uptick.

Q: Unpack forward booking trends.

A: Seeing positive forward booking trends, including impact from World Cup, with improvements in occupancy and rate within 90-day window.

Q: Talk about transaction market and what needed to get more active on acquisition front.

A: Debt markets supportive, but gap between seller expectations and buyer willingness to pay. Stock still screens better, need reversal of seller expectations and/or improvement in share price.

Q: Quantify insurance savings and expense outlook.

A: Property insurance renewal provides ~$900k improvement to forward guidance last three quarters. Expense guidance based on good trend of cost control, but could be impacted by environment shifts.

Q: Talk about M&A side, inbounds and properties for sale.

A: Continually in market, increased number of potential buyers, mix of buyers evolving from local owner-operators to private equity shops.

Q: Incremental development takeout transactions and opportunity set.

A: Difficult to underwrite development due to construction costs vs fundamentals, appetite limited, focused on existing assets and shares currently.