Q3 2024 Apple Hospitality REIT Inc Earnings Call Transcript
Key Points
- Apple Hospitality REIT Inc (APLE) reported a 1% growth in RevPAR compared to the third quarter of 2023, driven by improvements in business travel and resilience in leisure travel.
- The company achieved strong bottom-line performance with third-quarter adjusted EBITDA of $129 million and modified funds from operations of $107 million, up 6% and 3% respectively from the previous year.
- Preliminary results for October show continued growth with RevPAR up approximately 4% compared to October 2023.
- Apple Hospitality REIT Inc (APLE) has been able to optimize its portfolio through strategic dispositions, using proceeds to reduce debt, fund share repurchases, and acquire hotels with stronger growth profiles.
- The company maintains a strong balance sheet with a low leverage ratio of approximately 3.3 times trailing 12-month EBITDA and a significant portion of debt fixed or hedged.
- RevPAR growth was entirely driven by rate improvements, with occupancy remaining flat, indicating potential challenges in increasing occupancy levels.
- The transaction market remains challenging, with fewer transactions than anticipated and sellers reluctant to adjust pricing, limiting acquisition opportunities.
- Despite improvements, weekday ADR continues to lag behind weekends, indicating room for growth in business transient rates.
- The company faces a significant amount of capital expenditures, with major renovations planned at approximately 20 hotels, which could impact short-term financial flexibility.
- The market for larger portfolio sales remains limited, with most competitive bidding environments occurring for individual assets or small groups of assets.
Greetings and welcome to the Apple Hospitality REIT third quarter, 2024 earnings call. (Operator Instructions)
It is now my pleasure to introduce your host, Kelly Clarke, Vice President, Investor Relations. Thank you. You may begin.
Thank you and good morning. Welcome to Apple Hospitality reach third quarter, 2024 earnings call. Today's call will be based on the earnings release and form 10-Q which we distributed and filed yesterday afternoon before we begin. Please note that today's call may include forward-looking statements as defined by federal securities laws. These forward-looking statements are based on current views and assumptions and as a result are subject to numerous risks uncertainties and the outcome of future events that could cause actual results, performance or achievements to materially differ from those expressed, projected or implied. Any such forward-looking statements are qualified by the risk factors described in our filings with the sec including in
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