Apple Hospitality REIT Reports 5.7% Revenue Growth, 17.6% Net Income Increase in Q3 2024

Apple Hospitality REIT, Inc. reported its financial results for the three and nine months ended September 30, 2024, showing notable growth in revenue and net income compared to the same periods in 2023. Total revenue for the third quarter reached $378.8 million, a 5.7% increase from $358.3 million in Q3 2023. For the nine months, revenue rose 6.5% to $1.1 billion from $1.0 billion year-over-year.

Despite the revenue growth, net income for the third quarter decreased by 3.8% to $56.3 million from $58.5 million in the prior year. However, net income for the nine-month period increased by 17.6% to $184.2 million, up from $156.7 million in 2023. Adjusted Hotel EBITDA also saw an increase, reaching $139.1 million for Q3 2024, a 5.2% rise from $132.2 million in Q3 2023, and $400.6 million for the nine months, up 5.4% from $380.2 million.

The company’s total hotel operating expenses for Q3 2024 were $219.9 million, representing 58.1% of total revenue, compared to $203.7 million (56.9% of revenue) in Q3 2023. The increase in expenses was attributed to the acquisition of additional hotels and rising labor costs, repairs, and marketing expenses due to inflation.

As of September 30, 2024, Apple Hospitality owned 224 hotels with a total of 30,068 guest rooms, an increase from 220 hotels and 28,929 guest rooms a year earlier. The company completed the acquisition of two hotels during the nine months, funded through proceeds from the sale of three properties and borrowings under its revolving credit facility. Additionally, the company has a contract for a potential purchase of a hotel in Nashville, Tennessee, for approximately $98.2 million, expected to open in late 2025.

The company’s total debt increased to $1.5 billion as of September 30, 2024, up from $1.4 billion at the end of 2023. This includes $256.5 million in mortgage debt and $1.3 billion under unsecured credit facilities. The company reported cash and cash equivalents of $6.1 million, down from $10.3 million at the end of 2023.

In terms of shareholder returns, Apple Hospitality paid distributions of $0.24 per common share for Q3 2024, totaling $57.7 million, and $0.77 per share for the nine months, amounting to $185.9 million. The company also repurchased approximately 1.4 million common shares during the third quarter at a weighted-average price of $14.02 per share.

Overall, Apple Hospitality's strategic focus on acquisitions and managing operational costs has contributed to its revenue growth, despite challenges in net income and rising expenses.