Apple Hospitality REIT Lifts 2026 Profit Forecast Midpoint By $19 Million As Travel Improves
Preliminary October room revenue rose approximately 10% at comparable hotels; five properties are under sale contracts totaling $71.8 million.
Apple Hospitality REIT, which owns upscale hotels across the United States, raised its 2026 net-income forecast midpoint by $19 million Thursday, setting a range of $177 million to $192 million. The company attributed the increase to a better-than-anticipated third quarter and stronger business and leisure travel expectations for the fourth quarter in results announced with an SEC filing.
Higher Rates, Fuller Hotels
Third-quarter unaudited net income was $60.473 million, up 18.9% from $50.880 million a year earlier. Revenue reached $398.332 million, against $373.878 million, and earnings per share increased to $0.26 from $0.21.
The improvement combined higher prices with more occupied rooms. Across comparable hotels, average nightly rates rose 4.3% to $170.53 from $163.45, while occupancy reached 78.3%, against 76.2%. Revenue per available room—a measure that includes rooms left unsold—rose 7.3% to $133.60 from $124.55.
Those gains outpaced comparable-hotel operating-expense growth of 4.7%. The company's adjusted hotel earnings margin reached 37.1%, versus 35.0% a year earlier. Apple Hospitality said its room rates, occupancy and revenue per available room exceeded industry averages reported by STR.
Preliminary October results put comparable-hotel room-revenue growth at approximately 10% year over year. Management cited improving demand and favorable comparisons with periods affected by government disruptions; Chief Executive Officer Justin Knight said October's strength extended beyond the easier comparison with last year's government shutdown.
The revised full-year outlook calls for comparable-hotel revenue per available room to grow 5.1% to 6.1%. APLE shares rose about 2% to $18.59 in Friday trading, with a market value of $4.3 billion.
Five Sales To Fund Reinvestment
Apple Hospitality has five hotels under sale contracts totaling $71.8 million. The proposed sales cover three Santa Clarita-area properties for $42.0 million, the Hampton Inn & Suites by Hilton Davenport for $8.3 million and the Hilton Garden Inn Sacramento/South Natomas for $21.5 million. Management expects the sales to close in the fourth quarter.
One contracted property carried an approximately $4.3 million impairment charge in the third quarter. Including the pending transactions, the company has sold or agreed to sell 13 hotels for approximately $154 million since the beginning of 2025, moving capital away from older properties that management sees as having limited upside.
Supported by its liquidity, “we are actively underwriting acquisition opportunities,” Knight said in the earnings release. He said the company intends to put sale proceeds into hotels with stronger growth potential.
The hotel owner had 216 properties and 29,459 guest rooms across 83 markets, 37 states and the District of Columbia at the end of September. Its business centers on room accommodations, with most properties carrying Hilton or Marriott brands.
$700 Million Of Borrowing Capacity
Apple Hospitality ended September with approximately $700 million available under its revolving credit facility, approximately $43 million in cash and approximately $1.5 billion of outstanding debt. The debt's weighted-average interest rate was approximately 4.9%.
July's refinancing increased its main unsecured credit facility from $1.2 billion to approximately $1.3 billion and improved borrowing terms. A separate term loan grew from $130 million to $160 million, with its maturity extended by seven years. Following the refinancing, the company has no significant debt maturities until 2029.
Property investment remains another use of cash: Apple Hospitality spent approximately $58 million on capital improvements during the first nine months and anticipates approximately $85 million to $95 million for 2026, including comprehensive renovations at approximately 18 hotels.
Shareholders received $0.24 per common share in third-quarter distributions. Management expects monthly distributions to continue, with each payment requiring board approval.
