A better-than-expected first quarter and continuing demand trends have led executives at Apple Hospitality REIT to raise its full-year outlook.
During the quarter, Apple REIT’s comparable hotel portfolio saw revenue per available room grow by more than 2% despite challenging comparisons to 2025, President and CEO Justin Knight said during the company's recent earnings call. Within the portfolio, roughly two-thirds of the hotels delivered RevPAR growth.
Demand momentum has continued into the second quarter, with preliminary reports for April indicating comparable hotels RevPAR growth of over 4%, he said. The portfolio is benefitting from continued strength in demand along with favorable year-over-year comparisons to last year’s Department of Government Efficiency cuts, Liberation Day and the resulting macroeconomic uncertainty.
“While the ongoing conflict in the Middle East and its effects on global energy markets adds to an uncertain geopolitical and economic backdrop, our broadly diversified rooms-focused portfolio continues to demonstrate demand resilience,” he said. “Improving occupancy and forward-booking trends give us confidence heading into the summer months.”
Because of this stronger performance, Apple REIT has raised its full-year RevPAR growth outlook by 100 basis points to 1% at the midpoint, he said. Last quarter, the company had set a RevPAR growth range between down 1% to up 1%.
“The revised range maintains a measured view of the year ahead, and we believe it could ultimately prove conservative,” he said.
Transient demand has been stronger than anticipated, and early summer performance may benefit from incremental leisure travel tied to the upcoming FIFA World Cup matches across the U.S., Knight said. The hotel industry is starting to lap the period of 2025 in which reduced government spending, new tariffs and the government shutdown negatively affected hotel performance.
These factors could result in an upside not reflected in the company’s updated outlook, he said.
Performance evaluation
The first quarter gave Apple REIT a strong start to the year, especially considering initial expectations were that it would be the weakest quarter of the year, said Liz Perkins, senior vice president and chief financial officer. The quarter saw a strong finish in February that accelerated into March.
For the quarter, comparable hotels achieved RevPAR of $155, a 2.5% year-over-year increase, and average daily rate was up to $157, a 0.1% increase, she said. Occupancy grew by 2.1% to 73%.
Hotel performance in March was particularly noteworthy with comparable hotels RevPAR increasing by 5.6%, beating expectations and indicating broad-based demand strength across the portfolio extending beyond the early effects of policy-driven demand headwinds in 2025, she said.
Several markets stood out as top RevPAR performers, Perkins said. Pittsburgh grew by 23%, benefiting from multiple sporting events and a strong convention calendar. Alaska grew 21% due to strong leisure demand and incremental crew business. Seattle RevPAR grew by 18% with the return of Boeing production business and additional projected-related business at a nearby shipyard.
Palm Beach’s RevPAR increased 16% thanks to strong leisure and business transient demand, she said. Memphis saw RevPAR grow by 14%, capturing incremental medical personnel and airline crew business amid an increase in government demand in the market.
Weekday occupancy was up 170 basis points during the quarter, and weekend occupancy was up by 270, Perkins said. While weekday occupancy was down 200 basis points in January and then up 200 and 400 the following two months, respectively, weekend occupancy started stronger, up 100 basis points in January and then 200 in February and nearly 500 in March.
ADR trended similarly, starting negative in January and February, she said. Weekday ADR turned positive in March with 1.4% growth. Weekend was up 3.5% in March.
Same-store roomnight channel mix shows an improvement in transient trends, she said. Brand.com remained the largest channel, with 39% of roomnight bookings, a 40-basis-point increase. Online travel agency bookings grew 170 basis points to 13% of the mix. Property-direct fell by 90 basis points to 26%, and global distribution system bookings fell 90 basis points to 18%.
Portfolio updates
In April, Apple REIT closed on its sale of the Hampton Inn & Suites in Rochester, Minnesota, for about $9 million, Knight said. The sales price represents a 5% capitalization rate, or 14.5-times earnings before interest, taxes, depreciation and amortization multiple before capital expenditures. That becomes a 4% cap rate or 19.6-times EBITDA multiple after taking into consideration an estimated $3 million in anticipated capital improvements.
Recent acquisitions have performed well despite headwinds in several markets, he said. The Embassy Suites in Madison, Wisconsin, saw meaningful improvement as the hotel completed its first full year of operations. The AC Hotel in Washington, D.C., also acquired in 2024, produced full-year 2025 RevPAR of $205 and a 43% house profit margin.
The Motto Nashville Downtown continues to ramp well with average RevPAR approaching $200 over recent weeks, he said. The Homewood Suites Tampa-Brandon purchased last year continues to produce strong yields in advance of a full renovation and repositioning planned this summer.
Apple REIT has contracts for two projects in the early stages of development, Knight said. There’s the AC Hotel in Anchorage, Alaska, which has broken ground and is expected to be delivered by late 2027. It also has a dual-brand AC Hotel and Residence Inn located adjacent to its SpringHill Suites property in Las Vegas expected to be completed in the second quarter of 2028.
“The current transaction environment does not yet support accretive opportunities relative to our cost of capital, and we do not currently have any agreements for acquisitions in 2026,” he said, adding his team continues to actively monitor the transaction market for potential deals.
For the full-year 2026, Apple REIT intends to invest between $80 million and $90 million in capital expenditures, including major renovations at 21 hotels, he said.
By the numbers
For the first quarter, Apple REIT reported total revenue of $337.7 million, up from $327.7 million in 2025, according to its earnings report. The company achieved net income of $27.7 million, a 11.3% year-over-year decrease.
Adjusted EBITDA for real estate was $100.6 million, a 2.2% increase. Comparable hotels adjusted EBITDA was $108.4 million, a 3.6% increase, and comparable hotels adjusted hotel EBITDA margin percentage was 32.2%, a 20-basis-point decrease.
As of March 31, the REIT had approximately $1.6 billion of total outstanding debt, with a current combined weighted-average interest rate of about $4.6%. Its weighted-average debt maturities were about three years. It has cash on hand of about $8 million with approximately $559 million available in its revolving credit facility.
The company did not repurchase any common shares during the first quarter. It has approximately $242.5 million remaining under its share repurchase program.
As of press time, Apple REIT’s stock was trading at $13.62, up 14.9% year to date and 2.1% year over year. The NYSE Composite Index was up 4.7% and 19.4% for the same respective periods.