NYSE:APLE
Apple Hospitality REIT, Inc.
A US-based REIT providing stable dividend income through a diversified portfolio of hotel properties leased to premier management companies.
Key Metrics
Investment Thesis
Bull Case
Investors may favor Apple Hospitality REIT for its attractive yield profile supported by a consistent history of dividend payments totaling $240.4M annually. The company's diversified portfolio offers protection against regional economic downturns, while the current revenue environment suggests potential for growth as travel demand normalizes. Strong operating cash flow provides a cushion for debt servicing and future strategic acquisitions.
Bear Case
The recent dip in 2025 revenue to $1.41B signals potential saturation or softening demand that could persist if interest rates remain elevated. Significant cash outflows related to financing and investing activities suggest ongoing capital pressure that might limit flexibility for aggressive growth initiatives. Investors should be cautious about the sensitivity of hospitality assets to economic cycles which could compress margins further.
About Apple Hospitality REIT, Inc.
Apple Hospitality REIT, Inc. is a publicly traded real estate investment trust focused on acquiring, developing, and managing hotel properties across the United States. The company generates revenue primarily through room rentals and ancillary services in high-traffic urban and resort destinations. Its business model leverages long-term leases with major operators while retaining ownership of the underlying assets.
Analysis
Management Discussion
Despite a slight contraction in 2025 revenue to $1.41B from $1.43B in 2024, the company maintained robust profitability with net income stabilizing at $175.4M. Cash flow from operations of $370.2M significantly exceeds cash dividends paid of $240.4M, indicating a healthy generation of distributable cash. However, the decline in 2025 revenue and the significant cash outflows for financing (-$239.5M) and investing (-$135.4M) warrant monitoring to ensure debt obligations are being met without compromising shareholder returns.
Industry Overview
The US hotel industry is cyclical, driven by business travel recovery, leisure tourism, and convention spending. REITs in this sector provide exposure to tangible real estate assets with predictable lease structures that offer a blend of equity-like upside and bond-like income stability. Competition is fierce, requiring continuous reinvestment in amenities and technology to retain guests in a post-pandemic landscape.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.24B | $1.34B | $1.43B | $1.41B |
| Cost of Revenue | $710.5M | $780.7M | $837.9M | $847.3M |
| Gross Profit | $527.9M | $563.1M | $593.6M | $565.1M |
| Operating Expenses | $321.5M | $315.6M | $300.8M | $307.3M |
| Operating Income | $206.5M | $247.5M | $292.8M | $257.8M |
| G&A | $42.5M | $47.4M | $42.5M | $32.3M |
| D&A | $181.7M | $183.2M | $190.6M | $192.6M |
| Other OpEx | $279.0M | $268.2M | $258.3M | $275.0M |
| Non-Operating Income | $-59.7M | $-68.9M | $-77.7M | $-81.5M |
| Pre-Tax Income | $146.7M | $178.6M | $215.0M | $176.3M |
| Income Tax | $1.9M | $1.1M | $947.0K | $959.0K |
| Continuing Ops | $144.8M | $177.5M | $214.1M | $175.4M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $144.8M | $177.5M | $214.1M | $175.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $144.8M | $177.5M | $214.1M | $175.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $4.1M | $10.3M | $10.3M | $8.5M |
| Operating Leases | $26.3M | $25.4M | $24.3M | $23.3M |
| Total Assets | $4.77B | $4.94B | $4.97B | $4.90B |
| Total Liabilities | $1.59B | $1.61B | $1.70B | $1.75B |
| Shareholders' Equity | $3.18B | $3.32B | $3.27B | $3.15B |
| AOCI | $36.9M | $20.4M | $15.6M | $2.3M |
| Total L&E | $4.77B | $4.94B | $4.97B | $4.90B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $144.8M | $177.5M | $214.1M | $175.4M |
| Non-Cash Adjustments | $207.9M | $192.5M | $186.9M | $195.5M |
| Working Capital Changes | $15.7M | $29.0M | $4.4M | $-679.0K |
| Cash from Operations | $368.4M | $399.0M | $405.4M | $370.2M |
| Cash from Investing | $-135.9M | $-364.6M | $-215.7M | $-135.4M |
| Share Buybacks | $2.7M | $6.9M | $34.7M | $58.3M |
| Dividends Paid | $139.5M | $238.3M | $243.7M | $240.4M |
| Cash from Financing | $-229.0M | $-34.3M | $-189.2M | $-239.5M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $3.6M | $106.0K | $449.0K | $-4.6M |
| Beginning Cash | $39.9M | $43.5M | $43.6M | $44.1M |
| Ending Cash | $43.5M | $43.6M | $44.1M | $39.4M |
Frequently Asked Questions
How does Apple Hospitality REIT, Inc. make money?
The company's revenue is derived from its core hotel operations, which include room revenue, food and beverage sales, and other guest services. Additional income streams come from the leasing of these properties to third-party operators under long-term lease agreements, as well as potential development or redevelopment projects within its portfolio.
What are the main risks for APLE?
Hotel performance is highly sensitive to macroeconomic conditions, inflation rates, and shifting consumer travel preferences. Interest rate fluctuations impact the cost of debt and property valuation, potentially affecting net income and dividend sustainability. Regulatory changes in hospitality or shifts in zoning laws could hinder expansion plans or increase operating costs.
What is APLE's competitive advantage?
Apple Hospitality REIT benefits from a strategic geographic footprint in high-yield markets with strong travel demand. The company maintains a diversified operator base that mitigates single-entity risk and ensures consistent cash flow stability. Its balance sheet strength allows for opportunistic acquisitions and capitalization of market inefficiencies during downturns.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.