APLE - Earnings call 3 2023 | Apple Hospitality REIT, Inc.

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Operator

Greetings, and welcome to the Apple Hospitality, REIT Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kelly Clarke. ahead. go Please

Kelly Clarke

distributed good Quarter and based to Hospitality which Apple the afternoon. Thank Earnings morning. Call. Third we XX-Q, Form XXXX release be filed Today's REIT's yesterday earnings you, and Welcome and call on will

outcome that please are uncertainties laws. statements assumptions, securities results, call may forward-looking and future report expressed, the Form only views subject speak of and statements Any risk statements, those risks, are with of as Before as note or XX-K such include today. the to could by by result, in defined as to that undertakes we numerous required cause no forward-looking and any or The described today's performance update are except begin, annual our current law. materially publicly a federal filings These from qualified as forward-looking in implied. events obligation differ by based on on or factors actual revise including to the and forward-looking projected SEC, company statements XXXX our achievements

of remarks will yesterday's release In of measures SEC. measures and items filings definitions call. in measures to performance of in non-GAAP be GAAP and this discussed certain to with the referred are addition, included Reconciliations our during those other earnings

the Financial and applehospitalityreit.com.This of the Chief copy quarter of of our third Knight, Justin morning, outlook our our an year. visit will about information Liz results operational for Chief overview please Perkins, of a For Officer; the company, the earnings additional provide release XXXX remainder the for Executive and an or Officer,

this the call is to the call time, it turn pleasure the Following my we overview, open for Justin. over to Q&A. will At

Justin Knight

hotels recovery us comparable business comparable and today. we morning, leisure third We're quarterly quarter RevPAR. challenging steady since onset more than our and occupancy, our the the of and with in the incredibly RevPAR Despite for performance to X% demand improvements quarter third of transient hotels as of continued quarter, year-to-date. drove RevPAR A third in growth the achieved XXXX, joining pleased highest during strength compared more in you Good comparisons ADR thank pandemic. growth year-over-year

comparable X%. increased by XXXX quarter hotels Third ADR

Our occupancy as X% XXXX. quarter compared improved X% the and RevPAR up was by of to third

Continued to top quarter enabled in growth line X% hotels ADR. the improvement was $XXX us third comparable a occupancy for adjusted third October achieve EBITDA results, growth XXXX.Positive comparable and continued continued quarter trends million, month hotel have of on with preliminary over hotels XX% based of

of year, remains demand trends demand Still, travel the as strength performance, quarter. bolster will continue of elevated levels through we business fourth steady pre-pandemic overall to approach improvement our we end comparisons in the and last are to mid-week favorable. become travel the difficult Given occupancies. top continues increasingly line as Leisure

to achieved significant with be have XX%, adjusted and third guest portion and we monitor with real-time to a of cost share hotel of together efforts year. competitive cleanliness through the performance best general quarter of we we profitability asset hotels moderated our was team rate sacrificing somewhat of annual practices, satisfaction. where to the months XXX the and to the portfolio completed periods inflationary labor year, the acquisitions. which experienced latter operators in disciplined our partnered recently our management result service, at to XXXX.We overall the adjusted on-site focus down controls, comparable quarter fortunate maximize work of and performance the reflect X growth environment continued a as a without who, growth industry or saw line for elevated and margin We the some guidance first growth, are October EBITDA hotels as performance best top Expense announced quarter through pressures points lap in Through basis last

the we be of the are leverage, the hotels Courtyard, and a our of corporate pandemic efforts testament additional broadly purchase acquired acquisitive the positioning actively and million. rooms-focused combined recently the renovated with hotels managers Hyatt of a to In team $XX.X have since and within and downtown has investing strategy our high-quality hotels House of diversified since total to for underwriting onset Lake attributed a outperformance to combined of a portfolio acquired with which of City corresponding for the enabled additional current X to our Salt low and balance is flexibility garage in our contract us X the transaction environment.We us under of beginning opportunities. year strength Our is October, parking a in maintain sheet, a

business as oil adjacent We located technology $XX.X Inn area, to within of and has These includes and and another years spans science as information a are The built University for its trends the its the expand and and the with pleased Center Tequila business-friendly technology, Lake assembly Boeing's from Residence for downtown Lake shore known among of million. from family venues walking hotel the And is Washington in headquarters software facility trading contract Lake for well year-end. airplanes. from XXX convenient which wide manufacturing, million, South street Salt to Boeing of mile of environment demand Seahawks aviation, we purchase Salt our continue Station across less from areas. Suites, distance and recently total economic Salt Renton well is for are than others.In Salt of Silicon Interstate south care and have art International the to proximity is minutes to is presence health area, Lake hotel Renton South City, the Slopes demographic one under the including and which mile variety This sit a Utah that approximately care. gas, the and City significant City's as Airport.We life X recent seen positive City A the a Square, one Seattle serving a across and Embassy leisure Lake Jordan Renton Palace development tourism, to X perspective, the Salt business of Lake buildings just north the and leisure for its Salt office South Lake Utah, for the Center the anticipate expansion. poised State a as offers in is $XX development, by Jordan financial and firms commercial diversified to defense, health multiple downtown and nearby, known City hardware aerospace, industries, of strong XX with and station International and Seattle existing off the transit, Bellevue located transit-oriented Regional ski metropolitan October, Airport. service International transportation, the of acquired part Seattle-Tacoma hotel economy XX Salt Delta production manufacturing continued Lake hotel Class acquiring an Airport, Seattle City Southeastern we just hotels of generators well mixed-use variety growth convenient located performing and facility, downtown Lake of numerous Center connections Nuta Valley of Sogo Capital, Convention to Downtown amenities Salt and directly the within XX region Salt Temple Airport, and south, corridor City South Town with City

X,XXX is over and together in after range including a the meeting purchase health and has is market-leading have meaningful of X% blended Jordan several and assets, South onset recently and XXX-room anticipate reserve. Suites opened purchase Embassy ways development. Embassy square the we Wisconsin Madison biotech, contributor X% for has are rate FF&E industry with key the our standard technology, our XX-month a be a care, currently represent assets acquired and to grown in performance.We to home retail overall Downtown at through Salt portfolio. Moto year the this X We South financials and under the space have City The $XX contract combined of in and have for in that purchase in price following transacted XXXX, Jordan, strategically diverse businesses, million. believe Embassy XXXX both hotel acquiring Suites The We of downtown near Nashville September education price areas. an each on Moto in portfolio Renton also of in refined Lake these will pandemic, trailing million completion cap a of $XX the construction.Since under embedded that Madison, Nashville for for hotels the mid-XXXX upside of feet.The

have pandemic produced hotel X% trailing and full completed million at unlevered XX-month invested after of On hotels in yield acquired a year least expenditures. have and owned new since the XX basis, approximately for sales million capital approximately the a acquisitions. $XXX We in have approximately an $XXX

debt these completed still below of while acquisitions our the estimated balance Importantly, trailing maintaining sheet post-acquisition strength levels have XX-month we EBITDA. X.Xx with

peers deep and continue We operating underwrite through continue With lead optimal. available intently Supported performance, total by in tremendous opportunities and strong within experience, our our and well our industry we operating numerous to focused our shareholders on relationships, conditions our balance dividend capacity are strong are positioned potential the for to growth maximizing portfolio sheet our returns when remain marketplace. fundamentals we transaction post-pandemic payments. current

yield of distribution other Monday's closing share hotels capital. X.X%. approximately of our and $X.XX timing $X.XX based Together will annualized our During of to the of distributions of annual on quarter, paid and our performance we Board totaling the Directors, rate per uses monitor an to share distribution continue price, potential we relative per our with represents stock

of continued approach near-term business and our growth. fundamentals year-end, we in with remain limited supply demand As the favorable strength

significant the within and we have nearly profile, case recent with from designed any incremental not the create continued strategy quarters, downside to meaningfully supply risk providing benefit portfolio for of And half new do under radius, an risk X-mile upside. position asymmetrical ability our been has construction was enhance As several our to the demand. us acquisitions us opportunity hotels our mitigating a providing for for while believe outperformance.Our further

and variety hotels generators. of upscale portfolio a of diversified across demand Our rooms-focused is broadly wide markets

franchised of portfolio are by in balance dedicated the hotels appeal. and strong portfolio with with and a our extensive with brands broad industry consumer companies team corporate and of with the a effective reinvestment provide managed industry some and value leverage Underlying consistent is strategy best flexibility experience. management Our strength the financial low management sheet and industry-leading proposition

our additional Liz and guidance. our to details financial we outperform macroeconomic It now on performance shareholder we positioned the confident the well is value to annual updated trajectory optimistic be pleasure my and quarter call reason during the I'm to over specifically, any sheet, to are for to balance continue While environment. industry have turn in about our portfolio of maximize and

Liz Perkins

Thank you, Justin, and morning. good

portfolio of our compared and the revenue hotels. for the We quarter X% and million over for billion year, Comparable $X hotels $XXX of of the total the XXXX, to report months same as are period X X% quarter pleased to respectively. another strong was up for first

up Continued leisure quarter up over of ADR hotels increase to third during comparable of third was with be business XXXX X% and Leisure third quarter up and the strength XX%, the travel and in in $XXX, XXXX. XX%, period X% X% of same of was X%, XXXX. $XXX, the up quarter with travel during enabled X% the of occupancy demand compared hotels through up compared up comparable occupancies continued quarter RevPAR ADR X% September, RevPAR to to to XXXX. achieve a weekend to quarter with us recovery X% occupancy of strong Year-to-date

demand, continue average of we see addition, X% an weekday occupancies business of increase improvement XX%, supporting in In to year-over-year.

leisure levels. upside continued to occupancies relative strengthen weekly remains still for X of Midweek are pre-pandemic weeks quarter, XXXX the October, and occupancies occupancy While to weekday remain resiliency while supporting of the over night shoulder have last weekend the opportunity strong, there ahead occupancies in demand.

third room of XX%. while were to quarter-over-quarter. room second command, at from strong brands when our business powerful during quarter-over-quarter. bookings GDS channel leverage demand. our bookings the seasonally to steady This the and in constant And maintained bookings OTAs XX% the bookings increased recovery up remained mix the field, night channel direct was volume in brand.com GDS direct properties OTA In Property beneficial to night direct at sales speaks slightly quarter, mix, ability X% same-store for to quarter the the XX% decreased of bookings our efforts, quarter. terms XX% property continued the XX%

the the XX%. was to up Driven period remains XX% third at same slightly the period negotiated lower quarter remained we as at segment other believe bar by same Looking same-store compared continued to XXXX, of seasonality, XXXX. strong represents the our segmentation in still upside. than discounts mix, The from in And XXXX, but which is slightly second increased XX% quarter, Group to elevated XX%. to

September Turning room as the was under through of occupied to year. expenses. the up the was we an September hotels to quarter, just to with X% eased percentage Contributing as labor same-store XX% slightly same-store to XXXX. contract third reduction comparisons as the XXXX. of Total $XX quarter for quarter, payroll in compared per same-store compared up total our Year-over-year payroll improvement wages to quarter for this of a moved second the

with we expect year-over-year also back and associated anticipate the impacted per brand half utilization to occupied will travel of higher given room we levels.Hotel relative While during XXXX, registration were part-time that the margins also employees conferences. growth the and contract labor wages and higher fourth to continue elevated costs for increases quarter quarter by prepandemic in moderate of result to in cost meaningful full

to and positive continue our of environment same to to support rate X% period to the hotels and strong the and and growth for will train having to same us was basis approximately year-to-date XXXX, this of hotel long-term of With quarterly us XX, to and better of to at XX and points a amid on position the high through These level the into cost quarter celebrate margin anticipated, million of hotel service, for property $XXX efficiency half as cleanliness Comparable to A initiatives necessary margin sustain basis XXXX. attracting the and somewhat focus EBITDA of to back comparable top for conducive balance respectively. up and achieve hotels to with and as maintenance assets. talent. efforts quarter-over-quarter X we expense controls work points periods levels adjusted uphold ended associates maximize comparisons X% labor the respectively. million enabled down our months September a We efforts productivity quarter September, EBITDA a XX.X% the basis point XX and XX.X% the challenging and environment $XXX XXXX, the reflects adjusted inflationary retaining and comparisons improvement XXX year move profitability eased

calls, ability As we on long-term we portfolio to industry grow have the past believe expansion for that and stated largely on our our margin conditioned will for be rate.

up relative in significant expect environment, in hotels appropriately the seen expenses same $XXX million, X% and was and increases quarter continued Despite MFFO operating million of to million, staffed, million was we up XXXX, X.X% was third down quarter was coming of as respectively. the period figures year-to-date and and inflation with So past more year-to-date quarters. same have we the X% and adjusted X% periods $XXX the near-term the growth moderate to compared to $XXX the respectively. inflationary to XXXX, $XXX EBITDAre for for

Looking our sheet. at balance

other comprised and with August debt $X.X million, $XX $XXX credit issuance had fair $X.X XX, outstanding average maturity months term years previously hand availability term and X.X%. debt quarter, amendment debt XX% our of EBITDA loan X in facility. property-level with hedged.As secured rate on approximately At costs end an XX million Total of loan weighted credit in outstanding unamortized term hotels existing X.Xx total $XXX million debt a billion the our years. under cash were outstanding is approximately we facility the XX which to our maturity in billion cash, approximately of value outstanding was our trailing approximately maturities into and had approximately the XXXX, of interest July, revolving of approximately entered fixed We the align our debt of excluding of we date broader XXXX million, and discussed, or in facilities. debt, of net September million unsecured by weighted As $XXX on our by total average loan the the $XXX the of million facility, X extended $XX of adjustments

grateful be for relationships further lender by demonstrated as this to amendment. and supportive continue long-standing We recent our

of under September million million. the $XX loan pay mortgage for XX, maturing months, approximately in to million loan X of consisting and We next of and facility maturities were to credit term cash of debt have on third funds using XX our revolving revolving using plan the $XXX As Acquisitions we borrowings $XX and/or upcoming on approximately our availability completed new facility. these subsequent quarter debt a from funded financing. operations, hand credit

of outlook. on of with in pro forma midpoint Embassy, less the EBITDA and hotels As expectations accretive basis and comparable his numbers and closing Justin line line highlighted October, positioned continued We guidance trailing third quarter to by our narrowed RevPAR for acquisitions our X.Xx, preliminary the the well the liquidity With the through pursue have strength range increased to performance to our XX than top exceeding to now year. including in credit be Jordan opportunities. Shifting recently XX-month X.X% continue RevPAR have and on between with our we ample acquired X.X% we we and be for points. South growth debt to remarks, anticipate

our made similar high lower increasing to $XXX guidance, and the million to million. have end EBITDAre We end narrowing range to decreasing adjustments by $XXX the the

XX we expenses, the holding continued XX.X% and EBITDA hotels low guidance end XX.X%. our high pressures hotel margin adjusted at inflationary basis Given the reducing by points have end on by to adjusted comparable

expect and We million $XXX to income $XXX million. net be between

capital million be million We expenditures $XX and $XX year. the continue between expect to to for

guidance January January year-end were excludes excludes and includes acquisition as one property. if since and XXXX, of properties owned comparable non-hotel dispositions before the XXXX, acquired updated hotels X, X, for Our announced as

third a to have hotel party. asset, Our New leased York Hotel where XX operations been

and performance and business. ongoing while strength uncertainty, of encouraged reflects And for macroeconomic line continued and updated by for leisure our A business our growth both position our our guidance. moderated guidance to portfolio would are some our above October in midpoint We showed top perform the has recent strength current of months. demand trends of in for the expense continuation fundamentals hotels recent us trends

As with for well positioned we and our the end we are pleased the are of year. performance XXXX, we confident approach coming

Our differentiated resilient strategy cycles. proven has through economic

liquidity, use is transactions. accretive continue pursue we sheet strong to with balance to will Our opportunistically ample which

sound, dynamics, good And remarks. prepared Our our concludes over competitive markets. our incremental with condition investments, ensuring benefit the capital That assets from favorable are maintain our that supply in of advantage are a consistent other to in business products fundamentals believe we demand. we allowing us with

Justin I happy to you this be any morning. now and for us will answer that questions have

Operator

Thank you.

We session. will now Capital be question first And Markets. [Operator a Instructions]. question-and-answer KeyBanc our from conducting Austin Wurschmidt comes with

Austin Wurschmidt

Great.

margin? what when So understand Liz, out on for you to had or the us revised the comparable the can new that that EBITDA guidance acquisitions just XXX you hotel hotel assumes impact EBITDA margin hotels for change revised the the help the adjusted range revised adjust

Liz Perkins

Sure, to about At not if the and the points. absolutely, you're new acquisition comp at the midpoint, Austin. quarter guidance, XX basis existing the just end, difference is the revised looking subsequent

get So basis XX new an benefit absolute acquisitions. on basis the we a from point

Austin Wurschmidt

XXX gets clear. that point that So at range range you down basis in just that be to the for the revised midpoint pool, comparable on

Liz Perkins

XXX.

Austin Wurschmidt

XXX.

Okay.

so And points XX first through quarters. margins the basis year-to-date X down are

to that of said the the I in change 'XX believe to bit a third the you quarters Is basically, it because of year-over-year like should sounds growth some bleed you're fair? fourth continue, moderate you saw some that step should you into but in quarter in expect quarter, in the ahead. expecting little back continue expense that expenses So don't a improvement growth margin

Liz Perkins

year-over-year September, or we on midpoint saw September, in we certainly to happen what we that's That will in based And believe of could what happen. we range. hopeful we're like the comparisons our what if continue outperform we see is especially saw, will

has that quarter, and the well. August year-over-year at looked comp perspective I perspective month doing be some meaningful to we're in we seen some I included latter considering guidance. continued in around my and but and have next mentioned pleased then the we've trend conservative, there. think improvement July, improvement trends and recently, team as margin more and saw prepared that. an pleased year, labor more contract And our what in in of will the with more improvement be a quarter would started we we X companies job wages doesn't levels the to both to the think as challenges their certainly despite with midpoint we made have improvement I which from year-over-year moderate We're fourth a make than hopeful we that, think that and quarter more expense with certainly that efforts that a I management remarks productivity. a most But throughout positive higher opted tough focus anticipated. the We're seen full really that growth September, year-over-year, in with with productivity great maintain They're the continue. September into cautious, our have and

think I hopeful. we're So

One quarters and of that was estate quarter that in helping third prior premiums, the insurance deductibles things had. quarter in some hadn't that impacted had we us in offset we taxes real favorable the the hit loss in the increase some uninsured to we that had third was

drag premium the we've may had into offset or relative favorable some and carried didn't So We of the benefit insurance guidance quarter. through quarter or in not that negative third the increases that happen. have the fourth may experience we that that to some

Austin Wurschmidt

detail. No, one last And that's just on the guidance. helpful really then

Just set do year? from hotel contribution to that close how expect I clarify, to you much this EBITDA mean, are the acquisitions

Liz Perkins

it's for I back at our think we you for -- would closed the of the the on XX at That add Page new the look properties. Cleveland, you can end second release, which on earnings EBITDA see include quarter. If pre-ownership

annualize If $XX you million. probably it's that, around

Operator

Floris with van from Compass comes Point. Dijkum Our next question

Floris van Dijkum

curious, have yield pretty far fared been acquisitions obviously, have how the the guys you On how active. and been I'm like I has of rates. attractive. so update the cap Justin, your

market your would refinancing are opportunities the looking be view? do of about look investment you expect portfolios in troubled for there in how well? to going you you investments? And is your -- how to larger as out, on you be kinds do As think participate of those activity the And one-offs? transactions Or

Justin Knight

work backwards. So I'll my start way and

to think some we I participate or in highlighted. you your that would last the of types various of consider investments point,

incredibly groups assets. to be we increased, we're has slightly. And think markets And think challenging of volume prepared market has my that a we've debt that preference space. individual be And that and less our that transact brought with become at we competitive transaction in portfolios. the months that level, of can marketplace. look firm large XX underwrote that volume, additional large portfolios we active our standpoint, could where Certainly, at Because continue underwriting so. to a certainly, as remarks right includes that of generally, look assets I in of some but that's meaning -- of the the are has and one-off small meaningfully back total indication more I pursue is acquisitions, a mix And I to changed found to the and for not we competing that active the but well. now, in in landscape activity in ability we the our highlighted change. when potential market, are share medium-sized those a seen being individual we our I portfolio transaction fewer preference total think we or have consistently some From of has. when

underwrite. stream that potential have will steady of I deals think to anticipate a we opportunity go-forward on a we continued an basis,

move are challenging to based have seeing in I issues incredibly an be brought of we to ability continued for with market from I because a investments other with set market groups portion assets to of bring area those that and very year, more capital the active And your to would opportunity think That pricing financing as we're of well. anticipate be those market acquiring incremental assets. balance a as overall likely next of on highlighted do question, brands that's in or continue the that the think assets now the around is our we that strength been we've recently. with liquidity pressure become the issues successful with the that sponsor. should flexibility pleased into be because to the But you many interested in sheet for of we our

Floris van Dijkum

can I have viewed one other. know not your is dependent. or If that being as follow-up typically I more group business

group. your San is You of remarks But your mentioned, calendar. how certainly in note exposure a your I full demand a Diego. or some I the It's than did, do lower think that of Liz than service I market in XX% your exposure flow will of bit good. lot it is think, your San believe, benefit of group about bigger of looks largest much calendar, convention a How you view? peers. backdrop very in might to Diego's convention your be properties through terms what give your people a Maybe to a little think how is. to

Justin Knight

become attract that able are strong. In groups temper accessible we is individuals convention immediately certainly or to or we've the not to meaning calendar centers that benefit larger that we've been markets say, are in market to extent, less in conference we on actually that compression a major to bit dependent proximity San in that fortunate. and own Denver, most extent close benefit recent of or related years, to hotels And a to from type large benefit convention in I'd from that some business, I'd I that adjacent we're need little events. of cases, we obviously say smaller business. a conventions. within we own Diego associated to readily variety like the do in But assets with where those certainly

Liz Perkins

of San And benefit that around then downtown will the and in that X Diego we calendar. our downtown can assets of have should certainly are paper area, additional as benefit the But around X out you calendar. the on incremental move assets certainly, Of the depending downtown more beyond the convention we the the we that compression area, convention, size see the full compression. own see from convention

Floris van Dijkum

group pre-covid. to today, exposure how would that XX% compare the Maybe

it's now. a lower little it XXXX? like So was to you What mentioned bit prior

Liz Perkins

elevated levels, a down. of X slightly still quarter-over-quarter, to point pre-covid though or It's yes, on it's is. it year. even where to XXXX close the elevated, still slightly percentage to very year-over-year, the time just Very, But it's levels, depending

Operator

comes from Batory Oppenheimer Co. with & Tyler question next Our

Tyler Batory

overall, I'm implied September? October? the put a in look seeing growth versus terms for are can What And hoping seasonality QX. expectations what a November you of of finer year-over-year change was How December? terms down compare RevPAR step trends maybe at on trends of with guide much is point demand? what's in you you're of and and little when QX a then a How in bit October and we or in expecting RevPAR did for that in your prospectus

Liz Perkins

Really Tyler. good questions,

October, line it it will RevPAR month-over-month October, So but growth lower September. slightly in for don't in final maybe from than come we our like have line, in, numbers top looks

So September That's and in range, that lower. slightly probably around X%. maybe around was

ADR where saw we line in right with occupancy So had prior it growth and been years. of sort

a So to peak we're typically certainly from ADR last still perspective, given well. good see in we a year trends is and an not October that had seeing fact some strong continuing a as especially And The October October. meaningful month. pullback occupancy growth

be line midpoint to your the midpoint other knowing the quarter, question, in leading quarter, our and back and order in guidance step So the flattish guidance the into come the taking would implies part RevPAR December have that, range. of with month RevPAR to for which at that of a strongest that's would take November

to continue us or trends some pushing in not meaningful do uncertainty, built to change really we've that's in maintain that. think there's macro a I

with think that in the still our remain we're I and trends portfolio. we've optimistic pleased seen

improvement post-pandemic in from the perspective. a side, of December we as the see a lighter we it's occupancy from biggest world. leisure are as question kind softer prior travel to what is us leisure November And and we a And benefit transient to didn't business BT have December November and and while on mark pandemic, I the think waiting just months the just seasonally. is in between continue balance much historically -- from for BT and see to

Tyler Batory

Very you. I Thank appreciate detail. all me. it. That's for Okay. helpful

Operator

with Bryan from comes question B. next Securities. Our Maher Riley

Bryan Maher

Great.

for Just a couple me.

Maybe disposition standpoin, to the view I'm matching leverage acquisitions the You've some parts since meaningfully curious lot is talked doesn't up a that degree, go higher. today question some And about a here. with X what to dispositions from acquisitions.

the I start your older embedded an Where can along cap Let's at second. it for you with with cap buying you're said something a that stuff? think a you of like just upside. lines rate, X sell

Justin Knight

just by trades cap I replacement little older of asset. -- complicated secondary question cost the individual bit somewhat pricing seen at assets or rates. transactions mean typically recent on typically today market deals driven a of of we have depth a I'd very transaction for and the assets. based is say dependent on in those markets Those low those for a are select the service

at market activity spread environment, would XXX point And premier so would basis maybe be But time. lower.Generally spread depending between as their the secondary see we widely points, and much values can in particular in key speaking, transaction a that healthy interest XXX point the on per and swing more groups assets. any as the in basis that assets and can

even original our we're There think could attractive assets of market we are have And positive where number is based pricing think I feel the transact lock even And within on as looking do assets where a those that very assets in older we we our or meaningful I the where could at in described investment low it basis. have today, we yield like transact continually at we we earlier. have assets at portfolio. profit would spread, we investment. a to

for explore and economic continue to you that to to and the we're will optimized demographic recent competitive most trends. I of in our looking remains think relevant and as portfolio can that effort take advantage we're an we acquisitions that disposition ensure at anticipate opportunities

Bryan Maher

historically minute for we that continue somewhat you up, to open assume you've that know be dispositions remain a all XX% to let's low side And If carried muted. would that take the on number? XX%, the where pretty opportunities willing So leverage, acquisition currently.

Justin Knight

lower I a mean, between desire we've end highlighted comfortable that at long of the to and that we range. term X are opportunistically Xx be with

anticipate I year, include South so acquisitions well forma which Liz X.Xx. basis, remarks, a think in pro the Jordan, taking we're prepared below And highlighted our for I in we both total, on and this

of roughly $X.X on line credit. billion We available have million $X.X continue our to --

question, much it's our needle financing to access ultimately, so the pursue risk to company. intent your ready change I But the point to regardless acquisitions. standpoint not so the to of implicit And think from incremental in a was opportunity that move that set the debt profile our we of

sales portion the extent appropriate. so those to in to and/or from to a would active meaningful from of pricing And active we an We the standpoint. proceeds look were get become raise to acquisitions with equity was more extent fund way or acquisition a very

Bryan Maher

last on staying one just And that question. for

were Your property tax than insurance fairly higher was and expecting. we meaningfully

assets a in lessen Would a to those all that's of you Salt little about Lake some to own you You me. And states? exposure in but those selling talked X consider business and City, unfriendly, business-friendly Illinois. of your California assets bit acquiring for lot assets

Justin Knight

of benefited singling And have pressure, date where that for more markets at cost seen are necessarily where those increases that Without where we're our around concentrated speaking, we're Chicago, continued profitability interestingly, growth widely the states from to not in specifically, That being those the beneficial Absolutely. slightly to we out seeing portfolio have offset market versus looking only states certainly, California in as we've Northern for assets exposure. increased mindful and be has the Southern case revenue than been the in has different. dynamics overall. such our the expense California

the to are standpoint. our which continued which made constantly and I ensure portfolio, makeup potential assets trajectory the adjust into think rate of ways XXX costs I a upside from relative of at point to likely the outperformance, in looking is the that we looking to now over takes consideration earlier,

Operator

comes go question next Michael Witberg. our Instructions]And from Please ahead. Bellisario [Operator

Michael Bellisario Witberg

on your Chicago, questions. thank Justin, commentary for much being appreciated. you Two with diplomatic

just bookings. First, question, more on sort on a so of revenue for and guidance-related management probably but Liz,

much how XX month it, rather, the the to how higher the the month October on today Just the is July, and X call of bookings for last for that your is in month or the month out, demand dependent calendar understand for the you turn to different are months, November months then August on the trying when And books you portfolio? than much of June, current some any year? basically the next days or from

Liz Perkins

the month enter Typically, realize on pretty we Good books. for month year. with And stays the about XX% occupancy the question, the other then consistent month, the that throughout of we Mike. And month XX%. in the our by month

XX out, XX% occupancy So on books, half days of of XX days about the that. out, our

trends or portion the occupancy you strong. we may enter but change as XX end out If may very trends XX up, for towards consistent days there's And bookings and your be project if continue, can only out, a not where especially a certainly view we small have remains still seem so it's really, you a materialize days in of we to month trend. and clear how

optimistic those perform progress can especially the large or month to how in depending And so as months you change where Christmas Year's, and holidays. you Thanksgiving holidays move we're through leisure relative New throughout and view on your just there. -- really, months, But have you as like can the you business

We in bookings It's XXXX similar indicative as daily of we're that's at year seeing think in I bookings month our and the seeing. November around December. not some been of above trends November, so have the average where that with very change caution levels And in today. entered a of we comes midpoint prior

So we're low think still I have overall, visibility. encouraged, but just

Michael Bellisario Witberg

was what the it's year if to the that. end understand just sounds and versus like helpful. business it That's seasonality Got I trying just it's mix driven it of That's leisure or was it. at if

So And one gears then just there. helpful switching for for Justin.

to quantitative you've where kind Just than black box underwriting already goes spit all your big provided? be? do where your picture what on on help Just be? understand us in more stock cap review gets of Where is to need to the that you qualitative on maybe the can trading? commentary end criteria the other side your do rates the what need compares how then side? And and Just out IRRs

Justin Knight

I pricing multiples for and our relative at mean, stock and market the continually there. those trends implied assessing looking we're the to

since for they I the had space prices think in been broadly speaking, onset share volatile, more than of the been really have prior. the periods pandemic

daily pricing about positive a looking movement from think standpoint, have share average of been And And a least property at us. moving a as some we And at we're in of that's we where terms for to we're able so cap rates, price. generally, our seen transact. in then

than harder pursue capital active space. that in of a puts have a assets position enter from we meet institutional that private very largely equity standpoint hurdles outside for our with speaking, As activity.I looking neatly of in those an we current shifts points -- either different day That change the to the out transact challenging earlier total moves response in as high-quality groups we're acquisition assets ways a meaningfully the highlighted either our we're acquire markets those and we're to think from to drive needle but the of about investments, several really implied we profiles in have assets open at overall driven acquisition portfolio result more us those on really of returns that And a to categories. of -- minimum assets to fit reiterating. think, And capital cost price by been adding to on meaningful multiples, X standpoint from even portfolios growth a at standpoint. go-forward And of the need at higher worth and build such that replace I it's as implied from able further returns similar but a basis. questions, investment generally to into or who

total positive move expand will looking subtract time from value of in add time, the holdings our mean as where ways into complement we a already have and we at exposure. portfolio, from we're our from of the markets portfolio exposure looking generators to or and continually to the direction. existing and we're adding current set And our well the portfolio looking are that improving to portfolio lower the beyond that portfolio. that And to in We as and shift demand have the

Operator

next comes Powell Barclays. from Our question Anthony with

Anthony Powell

your finance currently. view the used right about how at X%, floating? this financing could line, on in What's So market And And permanent pricing at I I like fixed guess assets the think where you're the I think, which acquisitions, you on financing you is looking versus now? it? acquisitions and the

Justin Knight

were to versus speaking, were fixed low the higher near rate. when Generally and future to XXX% extremely the rates Historically, higher. fix. risk in balance was We we've looked floating rates

line the through seeing we future rate hedges predominantly and/or interim decreases and rate pulled but our slightly, progressed we largely changing through rate As unsecured fixed still loan. for the on potential environment back

Liz Perkins

Yes. We're as end. variable XX% about quarter of

swaps swap we'll look are at banks some curve that at I overall structure couple as continue forward mature closely we and fixed But a over of look with be. given isn't evaluate over our be the variable have sort we and maturing were contact manage the we the versus But close versus certainly, effectively think try looks. and felt I I curve place from or year, one hedges forward fixed the overhedged environment the current the and think these in at we'll to it. certainly like of next that think years, and XX/XX point, a way and incremental to look as next the bad perspective to

Justin Knight

our standpoint. and for ready will assets on largely in was be whether But and unclear the terms others of this it specifically. depends, the pricing you're acquisition lower might marketplace actual But what financing our basis on what put the about to that still capital of important the what on relative leverage permit of advantageous And we has would from position points depend of borrower higher. with, we're But and in those that XXX XXX it talking able costs to question some at incremental that to borrowing of relative in be to part the -- probably borrowing costs, value. from amount in your than that, us and then the do to point individual an pricing put to margin, which the And to others access versus competing average an is might note, asset the able do. are

Anthony Powell

as down get the is markets on more XXXX? maybe focused Those that some were markets normalization the I across of Beach bit guess, we you Florida. one leisure industry, in maybe Virginia assumed? more Melbourne user quarter, do and And more, in there into Or your in Okay. there see a other stabilizing like

Justin Knight

a certainly, markets highlighted where we couple saw look at meaningful by prepandemic. leisure trends, have those And vary overall where markets of we to performance you've When in increases market. performed relative they

been Having to unpredictable and like markets the by As standpoint, those our think as stabilizing a vary prospects And And time. long-term elsewhere, improvement bullish well mark-to-market. we weather and to they we've be been they've continue in in the from Virginia standpoint, on and/or numbers. without nearly bit from from for supply to offset Beach them overall that little we're extended pull will exception, able back from starting a where business see vary largely growth travel leisure an portfolio new an That are on in period based we But a that continue will maintain I actual seeing such level the a portfolio what things anticipate about absolute from weekends. as growing of to for has, performance prior were they market standpoint markets. overall, year-over-year been pandemic. I think based above on point

Liz Perkins

And meaningfully for but context, release, they're to comparisons still up we've XXXX XXXX. in the dropped the

to quarter. X% XXXX quarter, For XX%, the or up over Melbourne and Virginia XX% Beach the was up was for

Operator

closing the are for floor questions at Justin turn ahead. time. I There over would further Please to Knight like comments. go no to back this

Justin Knight

an opportunity I'd to you. today. you'll California. we one next with out hope in as with look to travel, speak It's you forward the of thank having to always us at many a hotels, you that We our joining talking like you and pleasure stay week of take to opportunity to for us

Operator

today's conference This concludes call.

this time. at a You and Thank may participation, disconnect great your have day. your lines for you

Apple Hospitality REIT (APLE) 8 Nov 232023 Q3 Earnings call transcript