Apple Hospitality REIT (NYSE:APLE) reported fourth-quarter and full-year 2025 results that reflected what management described as a “challenging backdrop” for travel demand, particularly during the workweek, while highlighting ongoing strength in leisure travel and the company’s efforts to adjust business mix, control costs, and deploy capital opportunistically.
2025 operating performance and demand trends
CEO Justin Knight said leisure demand remained strong across the portfolio, but policy uncertainty and a pullback in government travel pressured midweek demand and interrupted the “steady improvement in midweek occupancy” seen through much of 2024. Management said teams responded by adjusting hotel-level strategy, including “layering on additional group business” to bolster share and performance.
In the fourth quarter, comparable hotel RevPAR was $107, down 2.6%, with ADR of $152 (down 90 basis points) and occupancy of 70% (down 1.7%). Perkins noted weekday performance was weaker than weekend results during the quarter, with weekday occupancy down 140 basis points while weekend occupancy was down 50 basis points. She also said trends improved in December, including weekday occupancy turning slightly positive year over year.
Perkins said performance varied meaningfully by market. Among the top year-over-year RevPAR performers in the quarter were the Embassy Suites in Anchorage (up nearly 42%) and the Homewood Suites in Tukwila, Washington (up 33%). Hotels with significant year-over-year RevPAR declines included properties that benefited from Hurricane Milton-related business in the fourth quarter of 2024, such as the company’s Orlando-area SpringHill and Fairfield Inn & Suites.
Profitability, expenses, and margins
Despite softer revenue, Apple Hospitality emphasized its margin profile. Comparable hotel EBITDA was $99 million for the fourth quarter and $474 million for the full year, producing comparable hotel EBITDA margins of 31.1% for the quarter and 34.3% for the year, which management called “industry-leading.” Those margins were down 210 basis points in the fourth quarter and 190 basis points for the year compared to 2024.
Perkins said comparable hotel total revenue was $319 million in the quarter and $1.4 billion for the year, down roughly 2% and 1%, respectively, versus 2024. Comparable adjusted hotel EBITDA was down approximately 8% in the quarter and 6% for the year.
On costs, Perkins said comparable hotel total expenses rose 1% in the fourth quarter and 1.9% for the year, or 2.5% and 3.3% on a cost-per-occupied-room basis. Payroll per occupied room increased 3.5% in the quarter to $43, and contract labor declined to 7% of total same-store wages, down 120 basis points from the prior-year quarter.
Capital allocation: dispositions, buybacks, and reinvestment
Knight highlighted a focus on capital allocation amid what he described as the stock trading at an implied discount to private market values for much of the year. In 2025, the company sold seven hotels for approximately $73 million in gross proceeds and repurchased 4.6 million shares for about $58 million.
Management provided additional detail on the 2025 asset sales, stating the seven hotels traded at a blended 6.5% cap rate or 12.4x EBITDA multiple before capital expenditures, and a 4.9% cap rate or 16.5x EBITDA multiple after considering an estimated $24 million of anticipated capital improvements. Proceeds were reinvested through 1031 exchanges into acquisitions including Homewood Suites Tampa Brandon and the newly constructed Motto by Hilton Nashville Downtown, which was acquired in late December.
Knight said the company does not have any acquisitions currently contemplated for 2026, and he suggested the near-term focus is likely to remain on “select dispositions” where proceeds can be redeployed at a favorable multiple spread. He also said the company’s shares appear “attractively priced” at current levels.
On reinvestment, the company reported 2025 capital expenditures of approximately $88 million and guided to $80 million to $90 million of portfolio CapEx in 2026, with major renovations planned at about 21 hotels. One highlighted project is the conversion of Residence Inn Seattle Lake Union to a Homewood Suites, beginning in the fourth quarter of 2026 and expected to complete in the second quarter of 2027, while operating through renovation.
Marriott transitions and portfolio positioning
Management said it completed the transition of 13 Marriott-managed hotels to franchise in January, consolidating management with third-party operators, often already operating other Apple hotels in those markets. Knight said the shift should create operational synergies and provide greater flexibility for potential dispositions, emphasizing that removing brand management “meaningfully increases the potential buyer pool.”
On expected financial impact, Perkins said 2026 guidance does not include a meaningful lift from the manager transitions, citing incremental transition costs early on and indicating the primary benefits are expected in future years.
Knight also pointed to favorable supply dynamics, stating that at year-end nearly 59% of the portfolio had no new upper upscale or upper mid-scale hotels under construction within a five-mile radius. He attributed modest changes in that metric to shifts in portfolio composition rather than a meaningful change in the overall supply outlook.
2026 outlook: flat RevPAR midpoint, event potential, and early-year noise
For 2026, the company guided to comparable hotel RevPAR change between -1% and +1%, with management characterizing the midpoint as flat. Perkins said full-year guidance also calls for net income of $133 million to $160 million, comparable hotel adjusted EBITDA margin of 32.4% to 33.4%, and Adjusted EBITDAre of $424 million to $447 million.
Management said early 2026 results were affected by difficult comparisons and weather. Knight said comparable RevPAR declined about 1.5% in January, primarily due to prior-year benefits from California wildfire recovery-related business and the presidential inauguration’s impact in the Washington, D.C. area, along with winter storms. Perkins said February performance improved, bringing year-to-date comparable RevPAR growth “slightly positive.”
While both executives flagged potential upside catalysts—particularly incremental leisure travel associated with the FIFA World Cup 2026 and easier comparisons to periods affected by government-related disruptions—management emphasized that the midpoint of guidance assumes little to no benefit from those event-driven tailwinds. In Q&A, Perkins said the company expects the weakest quarter to be the first quarter and the highest growth in the fourth quarter, in part due to lapping the prior-year government shutdown impact.
On business mix, management said government room nights on a same-store basis were down about 12% for full-year 2025, while negotiated was down 5% to 6%, with declines accelerating around the time of policy changes and later the shutdown. Executives said some of that demand may return, but it remains difficult to quantify, and the company intends to continue emphasizing group and other demand sources where available.
Apple Hospitality reiterated its focus on market share growth, expense discipline, reinvestment, and maintaining balance sheet flexibility. The company also highlighted shareholder returns, noting it paid $0.24 per share in distributions in the fourth quarter and $1.01 per share for full-year 2025, and cited an annualized regular monthly cash distribution rate of $0.96 per share as of the referenced stock price in the prepared remarks.
About Apple Hospitality REIT (NYSE:APLE)
Apple Hospitality REIT (NYSE: APLE) is a publicly traded real estate investment trust that focuses on acquiring, owning and operating high-quality, upscale, select-service hotels. The company’s portfolio primarily consists of properties operated under premium franchise agreements with leading lodging brands such as Marriott, Hilton and Hyatt. Apple Hospitality REIT is self-managed and internally advised, overseeing property management, revenue optimization and asset-level operations through its in-house team of hospitality professionals.
The company’s holdings encompass over 200 hotels featuring more than 30,000 guest rooms across a diverse array of markets in the United States.
