This article first appeared on GuruFocus .
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Comparable Hotels RevPAR (Q3):$134, up 7.3% year-over-year; monthly growth of 6.2% in July, 4.6% in August and 11.2% in September.
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Comparable Hotels ADR (Q3):$171, up 4.3%.
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Comparable Hotels Occupancy (Q3):78.3%, up 210 basis points.
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Comparable Hotels RevPAR (9M):$128, up 5.1%; ADR $166, up 2.8%; occupancy 77.1%, up 170 basis points.
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Comparable Hotels Total Revenue:$394 million for Q3, up 8.2%; $1.1 billion year-to-date, up 6.4%; other revenues up 8% for the quarter and 9% year-to-date.
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Comparable Hotels Adjusted Hotel EBITDA:$146 million for Q3, up 14.7%; $405 million year-to-date, up 9.9%.
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Comparable Hotels Adjusted Hotel EBITDA Margin:37.1% for Q3, up 210 basis points; 36.1% year-to-date, up 120 basis points.
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Adjusted EBITDA RE:Approximately $140 million for Q3, up 13.3%; $385 million year-to-date, up 8%.
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MFFO:$118 million, or $0.50 per share, for Q3, up 16% and 16.3% respectively; approximately $322 million, or $1.36 per share, year-to-date, up 9.5% and 10.6% respectively.
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Same-Store Hotel Expenses:Up 3.7% for Q3 and 3.2% year-to-date, or up just 0.6% per occupied room in both periods; operating expenses up 4% while fixed expenses declined.
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Rooms Wages:Up 4.5%, or 1.4% per occupied room; utilities up 7.1% and repairs and maintenance up 6.5% were primary headwinds.
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Capital Expenditures:Approximately $58 million for the first nine months; full-year expectation of $85 million to $95 million, including comprehensive renovations at 18 hotels.
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Distributions:Approximately $57 million, or $0.24 per share, paid during the quarter; year-to-date distributions represent approximately 65% of MFFO after capital expenditures; annualized regular monthly distribution of $0.96 per share represents a yield of approximately 5.1%.
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Balance Sheet:Approximately $1.5 billion total debt, about 3 times trailing 12-month EBITDA; weighted average interest rate of 4.9%; weighted average maturity of approximately 4.5 years; 60% of debt fixed or hedged; approximately $43 million cash on hand and $700 million revolver availability.
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Portfolio Activity:Contracts to sell five hotels for approximately $72 million, expected to close by year-end; 13 hotels sold or under contract for approximately $154 million since the beginning of 2025; 210 unencumbered hotels as of October 31, 2026.
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Full-Year 2026 Guidance:Comparable hotels RevPAR growth of 5.1% to 6.1%; comparable hotels adjusted hotel EBITDA margin of 35% to 35.5%; adjusted EBITDA RE of $482 million to $493 million; net income of $177 million to $192 million.
Release Date: November 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Comparable hotels RevPAR grew 7.3% in Q3 2026, accelerating from 5.4% in Q2, with broad-based demand from both business and leisure travelers.
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Adjusted hotel EBITDA margin expanded 210 basis points to 37.1%, and MFFO per share increased 16.3% year-over-year, demonstrating strong operating leverage.
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Full-year 2026 comparable hotels RevPAR growth guidance was raised by 235 basis points to 5.6% at the midpoint, and adjusted hotel EBITDA margin guidance increased 105 basis points to 35.25%.
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The company has a strong balance sheet with leverage of approximately 3x EBITDA, $700 million available on its revolving credit facility, and no significant unsecured maturities until 2029.
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Apple Hospitality REIT Inc ( NYSE:APLE ) is actively recycling capital from older, lower-growth assets into accretive acquisitions, with 13 hotels sold or under contract for approximately $154 million since the beginning of 2025.
Negative Points
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Utilities and repairs and maintenance expenses grew 7.1% and 6.5% respectively, posing cost headwinds.
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The company anticipates a modest headwind in 2027 from lapping the benefit of the World Cup in its host markets, primarily in the second quarter.
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Performance was softer in some markets, such as Phoenix, which was roughly flat in Q3 after declining 5% in Q2.
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The positive impact from the Marriott managed-to-franchise transition may face integration risks, and the company will have a better sense of any incremental displacement from the Lake Union conversion later.
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Future growth may not benefit from some of the tailwinds that fueled higher growth rates in 2026, such as easier government comparisons and the World Cup.
Q & A Highlights
Q: With additional proceeds coming from hotel sales later this year, which capital allocation option is most attractive today? A: CEO Justin Knight said the most likely deployment will be into acquisitions, noting the company is active on a number of potential deals. He added that with meaningful free cash flow above CapEx and distribution needs, projected debt to EBITDA falling below 3x by year-end, and an improved cost of capital, it would be reasonable to expect the company to be "meaningfully more acquisitive" than recently, assuming no change in share price.
Q: What kinds of acquisition opportunities are you seeing, and what is the competition like in the transaction market? A: CEO Justin Knight said the pipeline is a mix of urban and suburban, newer-vintage and value-add assets, similar to recent acquisitions of the Motto in downtown Nashville (newly constructed) and the Homewood Suites Tampa Brandon (value-add with renovation and management change). He noted the company has executed both strategies over 25-plus years and will target assets with meaningful long-term upside where its platform adds value.
Q: Where are acquisition pricing and replacement cost today, and what is the magnitude of the discount? A: CEO Justin Knight said low supply growth persists because rising construction costs are outpacing underlying performance growth in many markets, with roughly 50% of the portfolio having no new supply within a five-mile radius. He said much of what the company is evaluating can be bought below replacement cost, and its scale and renovation experience should allow efficient execution.
Q: What is the preferred source of funds for acquisitions, and how are you thinking about the ATM given the stock price? A: CEO Justin Knight said the preferred source is cash from operations, followed by redeploying sale proceeds, with balance sheet capacity providing flexibility to add leverage without shifting the portfolio's risk profile. On equity, he said the company would only issue equity where there is clear line of sight to a target use of proceeds at a meaningful spread to the implied multiple, citing the Las Vegas deal as an example, and that there is no immediate need to tap the equity markets to ramp acquisitions.
Q: How much renovation displacement is baked into the fourth quarter guide, and how should we think about the net 2027 impact from Anchorage and the Lake Union rebrand? A: CFO Liz Perkins said the company will speak more specifically to 2027 displacement with full-year guidance, as property-level budgeting is underway. She said fourth quarter guidance factors in displacement from the Lake Union Residence Inn conversion and the Embassy Suites, and that the company always assumes displacement from renovated properties18 this year versus 21 last yearwith a better read on Lake Union's first-of-its-kind brand conversion to come.
Q: What is the setup for 2027, and could there be another year of mid-single-digit RevPAR growth? A: CEO Justin Knight said budgeting is still underway but the setup is encouraging, citing continued leisure strength and a meaningful rebound in business travel, with travel tending to be a momentum play. He cautioned the company won't have some of this year's tailwinds but expects underlying fundamentals to support growth, with higher margins and demonstrated flow-through. CFO Liz Perkins added that the World Cup was roughly a 15 basis point RevPAR benefit for the full year, so lapping it is not a meaningful headwind to 2027.
Q: October RevPAR was up a very strong 10% with easier government compshow much of that was government-related, and what does it mean for the rest of the fourth quarter? A: CFO Liz Perkins said that conservatively, assuming most of last year's roughly 3% same-store decline was government or government-adjacent, underlying October RevPAR growth was still 7% to 8%. She said that strength is factored into the high end of guidance, and broad-based fundamental demand remains strong outside of government-specific business.
Q: Can you elaborate on what you're seeing from business transient, the diversity of the strength, and how it may trend? A: CFO Liz Perkins said business transient is harder to track because the company is shifting out of lower-rated negotiated business into retail, but GDS is up with strong ADRs, Tuesday/Wednesday occupancy growth is the highest of the week, and ADR is rising there. She cited broad-based drivers including citywide events, group, local accounts, government returning in some markets, and larger corporate negotiated improvements, which she called most encouraging.
Q: What drove the OTA mix shift lower in the quarter, and what does it mean for margins? A: CFO Liz Perkins said growth in bar rates and brand.com direct business, which tends to be corporate-driven and does not book through OTAs, drove the OTA decline. She noted brand.com is the lowest-cost channel and the margin gap versus OTA is narrower than it once was but still favorable, and that OTA commission terms are generally reasonable, though the company prefers direct business.
Q: On 2027, what risks are you discussing internally besides macro uncertaintyany expense-side risk with the brands? A: CEO Justin Knight said brands are intently focused on enhancing owner operating metrics, particularly profitability, bringing discipline to the overall model. He does not see increased brand-related costs as a meaningful margin threat and noted significant brand investment in technology and programs that could generate incremental top-line and contribute to profitability.
Q: The operating expense environment has been extremely benignwhat's on the horizon, what are the controllables, and what RevPAR growth is needed for sustained margin growth in 2027? A: CFO Liz Perkins said the team has managed variable costs well amid benign wage pressure, offset by productivity and improving occupancy, and she expects that to continue if top-line growth persists. She flagged utilities trending higher and said continued year-over-year declines in fixed costs should not be assumed for next year, though the company will work property taxes and insurance programs; the current portfolio is the starting point, with rate expansion and stable occupancy supporting flow-through and margin growth.
Q: How much of the rate growth is mix versus aggregate price increases? A: CFO Liz Perkins said mix management is a huge piece and is intertwined with pricing, as more compression nights and higher occupancy across more days of the week build confidence in pricing and the ability to preference higher-rated business. She also credited teams with layering in incremental group at attractive rates
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
