Apple Hospitality REIT (APLE) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results with net income of $73.9M, up 13% year-over-year, and operating income of $93.5M, up 12.6% compared to Q2 2023.

• Comparable Hotels Occupancy reached 79.8%, up 2.2% year-over-year, and RevPAR increased 2.5% to $130.09.

• Portfolio outperformed pre-pandemic levels, with RevPAR up 11% and adjusted hotel EBITDA up 12% versus Q2 2019.

• Completed two hotel acquisitions for $196M and three hotel dispositions for $41M year-to-date through July, realizing a gain of $18.2M.

• Repurchased 1.6M shares for $23M and paid $0.24 per share in Q2 distributions; $312M remains under the repurchase program.

Financial highlights

• Q2 2024 total revenue was $390.1M, up 7.9% year-over-year; YTD revenue was $719.6M, up 6.9%.

• Q2 Adjusted Hotel EBITDA was $151.7M, up 7.4% year-over-year; margin: 38.9%.

• Q2 Adjusted EBITDAre rose 9% to $140.9M; Q2 MFFO increased 8.9% to $121.3M.

• Q2 Comparable Hotels ADR was $163.01 (+0.3%), Occupancy 79.8% (+2.2%), and RevPAR $130.09 (+2.5%).

• Q2 EPS was $0.31, up from $0.29; six-month EPS was $0.53, up from $0.43 year-over-year.

Outlook and guidance

• 2024 net income guidance: $202–$225M; Comparable Hotels RevPAR change: 0.5%–2.5%; Adjusted EBITDAre: $456–$474M.

• Guidance revised downward for net income and RevPAR due to increased leisure price sensitivity and lower rate growth, but EBITDA margin slightly increased.

• Capital expenditures for 2024 expected at $75M–$85M, including renovations at 20 hotels.

• Management expects monthly cash distributions to continue at $0.08 per share, subject to Board approval.