Greetings, and welcome to the Apple Hospitality REIT, Inc. Fourth Quarter and Full Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Kelly Clarke. Thank you. You may begin.

Thank you, and good morning. Welcome to Apple Hospitality REIT, Inc.’s Fourth Quarter and Full Year 2025 Earnings Call. Today’s call will be based on the earnings release and Form 10-Ks, 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 our 2025 Annual Report on Form 10-K, and speak only as of today. The Company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, non-GAAP measures of performance will be discussed during this call. Reconciliations of those measures to GAAP measures and definitions of certain items referred to in our remarks are included in yesterday’s earnings release and other filings with the SEC. For a copy of the earnings release or additional information about the Company, please visit applehospitalityreit.com. This morning, Justin G. Knight, our Chief Executive Officer, and Elizabeth S. Perkins, our Chief Financial Officer, will provide an overview of our results for the fourth quarter and full year 2025 and an operational outlook for 2026. Following the overview, we will open the call for Q&A. At this time, it is my pleasure to turn the call over to Justin.

Good morning, and thank you for joining us today for our fourth quarter and full year 2025 earnings call. Against the challenging backdrop in 2025, our corporate management and hotel teams skillfully executed against strategic initiatives to maximize operating performance, manage expenses, capitalize on dislocations in the stock market, optimize our existing portfolio, enhance our growth profile, and position the Company to maximize shareholder value through outperformance in the years ahead. Our portfolio of efficient, high quality hotels is broadly diversified across 84 markets, with exposure to a variety of demand generators. During the year, leisure travel remained strong across our hotel portfolio while policy uncertainty and a pullback in government travel impacted midweek demand, temporarily disrupting the steady improvement in midweek occupancy that characterized much of 2024. Our asset management and hotel teams adjusted strategy to optimize the mix of business at our hotels as demand trends shifted, in many cases layering on additional group business to bolster market share and strengthen overall performance. Portfolio performance. Through the successful navigation of changes in government dependent demand, combined with continued strength in leisure travel, we achieved comparable hotels RevPAR of $118 for the full year 2025, down 1.6% to the prior year. Based on preliminary results, comparable hotels RevPAR declined by approximately 1.5% in January 2026 as compared to January 2025, primarily as a result of challenging comps related to wildfire recovery related business, which benefited a number of our California hotels last year, and the presidential inauguration, which benefited our hotels in the Washington, D.C. area. Winter storms also weighed on January and early February results but occupancies have improved meaningfully with recent weeks showing significant year-over-year growth. Together with our management teams, we remain focused on ensuring that we are growing market share and prudently managing expenses to…

While the travel industry faced several macroeconomic headwinds in 2025, we are generally pleased with the performance and resilience of our portfolio. Comparable hotels total revenue was $319,000,000 for the quarter, and $1,400,000,000 for the full year 2025, down approximately 2.1% to the same periods of 2024. Comparable hotels adjusted hotel EBITDA was approximately $99,000,000 for the quarter, and $474,000,000 for the year, down approximately 8.6% as compared to the same periods of 2024. Fourth quarter comparable hotels’ RevPAR was $107, down 2.6%. ADR was $152, down 90 basis points, and occupancy was 70%, down 1.7% as compared to the fourth quarter 2024. For the year ended 12/31/2025, comparable hotels’ RevPAR was $118, down 1.6%. ADR was $159, down only 10 basis points, and occupancy was 74%, down 1.6% to 2024. Our portfolio continues to outperform the industry, where STR reports RevPAR of $100 and average occupancy of 62% for 2025, highlighting the relative strength of our portfolio demand despite year-over-year disruption. Our teams have done a tremendous job adjusting to reoptimize the mix of business at our hotels where there were meaningful shifts in government and other demand segments, as well as maximizing revenue around special events to strengthen market share and performance for our overall portfolio. Market performance varied significantly during the quarter, with a mix of strong RevPAR gains in several markets and ongoing headwinds impacting others due to demand shifts and challenging year-over-year comparisons. Our team remains focused on hotel and market specific strategies as well as operational execution to maximize performance. Top RevPAR performing hotels during the quarter as compared to the same period last year included our Embassy Suites in Anchorage, Alaska, which was up almost 42%, our Homewood Suites in Tukwila, Washington, which was up 33%, our Courtyard in Franklin, Tennessee, which was…

And our first question will come from Jack Armstrong with Wells Fargo.

Hey, good morning. Thanks for taking the question. What would you say was the total drag on RevPAR in 2025 from Liberation Day and the government shutdown? And how much of that do you expect to come back as a benefit in 2026?

Good morning, Jack. It is a good question. I think, as we have progressed through the year, and reported on government being pulled back and related business, whether it be government adjacent that we can identify or general BT related to some uncertainty. You know, we have been clear it is hard to quantify completely. If you look at room nights for government on a same store basis, for the full year, they were down about 12%. And negotiated was down five to 6%. Which really that trend did not start until Doge and certainly ebbed and flowed throughout the year, ending the year down a little bit more with the government shutdown. So I would say, if you think about it from that perspective and you assume a good portion of that could come back, the total of those could be about a point in occupancy. But, you know, some of that from a 3% for the full year.

Yes. On a comparable basis at the midpoint, you are just under 3% for variable expenses, about 2.7%. And then fixed is just under 5%, so four and a half or so, for fixed expenses at the midpoint.

Okay. Great. Thank you.

And our next question comes from Austin Wurschmidt with KeyBanc Capital Markets.

Liz, just you discussed all the moving pieces related to the outlook this year from some of the policy related disruption that went on last year, as well as the event-driven demand coming this year. I am just wondering if the RevPAR growth guidance assumes any volatility. And if you could just kind of maybe provide some of the cadence of how you are thinking about the quarters or first half versus back half of this year? Thanks.

It is a good question. I think as we think about FIFA World Cup, to the extent we get benefit from that, that would occur probably mostly in late second quarter. You know, we provided in our prepared remarks as well as in the press release last night that, you know, not much of that, if any, is contemplated at the midpoint of our guidance range. You know, it is a little early to know how that might materialize, so we are optimistic about the potential. So if you think about cadence sort of outside of the guidance range, I would say the end of the second quarter is when we are anticipating for our hotels where we see the most benefit, way the matches are lining up. As we think about the midpoint of guidance, and what was assumed in guidance, you know, moving throughout the year, the cadence is fairly flat in the middle of the year, and then a slight decrease in the first quarter because of the California wildfire comp to last year where we experienced the most benefit. And certainly the weather that we have experienced so far year to date has had some impact too. And then the fourth quarter, certainly, we would have a little bit more of an increase due to the government shutdown last year. So highest growth in the fourth quarter, weakest quarter first quarter.

That is helpful. And then, you know, you did reference you were kind of forced to shift the business mix throughout the year given all the things we just discussed last year. How are you approaching this year with respect to business mix versus last year? And just the potential benefit that that could have on ADR from remixing that business you know, last year. Thank you.

We have actually been incredibly pleased with our team’s ability to bring group into the hotels at attractive rates. And I think as we move forward this year, we expect those efforts to continue. Direct sales to group within market. Ideally, we see improvement in government business, which helps to fill in the gaps, but certainly, benefiting from the efforts of our property level teams in going out and seeking business to replace that was no longer available during the government shutdown. So our expectation would be relative to years prior to last year, know, potentially slightly less government, slightly more group but we will see how the year plays out. I think what we have demonstrated is that we have a team at our hotels that has the ability to act on existing demand in market. And we have product that is versatile and appeals to a broad variety of potential customers. Thanks for the time.

Thanks, Austin.

Moving on to Ari Klein with BMO Capital Markets.

Thanks, and good morning. Just going back to the RevPAR outlook, curious just at the high end of the range, that incorporating the fact that comps are getting easier and some of the event tailwinds that you talked about? And then 2025 was characterized more so by weaker occupancy than ADR growth. Is that your assumption for how 2026 will play out as well? Thanks.

It is a good question. Yes. I mean, I think at the midpoint of guidance, we assumed little impact or benefit from the special events that may happen this year or a return to some of the business we were missing. As you move higher up the range and hopefully beyond the range, it would anticipate some growth in occupancy as we lap those comps, more so than rate. Though, I think that some of the special events to the extent they materialize should provide some rate opportunity as well.

K. Thank you. And then, Justin, maybe talk a little bit about just what you are seeing as far as the transaction market is concerned? Are you more focused on dispositions at this juncture? Just any color there would be helpful. Thank you.

Yeah. Absolutely. Incredibly pleased with our team’s ability to execute last year, specifically on dispositions. I highlighted numbers during my prepared remarks, but their ability to execute at the multiples they were able to execute gave us a tremendous amount of flexibility to redeploy at spread multiples, which we think will meaningfully benefit us. I highlighted in my prepared remarks that at this point in time, we do not have any acquisitions under contract or currently contemplated for this year. A lot can change as we move through the year, and I think we have demonstrated an ability to be nimble and to adjust strategy based on existing opportunities. But today, the environment looks very similar to the environment that we experienced last year. And, I think in the near term, it is safe to assume that we will be focused on select dispositions where we have confidence we can redeploy proceeds into higher producing opportunities. And, I think, certainly, at current levels, we see our shares as being attractively priced.

Thank you.

I am sorry. And moving on to Rich Hightower with Barclays.

Hey. Good morning, guys. Thanks for taking the questions here. I think you mentioned in the prepared comments that occupancy for sort of midweek transient business got a little bit better in December. And maybe just if we could dig into your outlook specifically for that segment in 2026, better or worse? What trends are you seeing sort of within the core corporate transient group of customers.

Good morning, Rich. So I think we were encouraged, especially post government shutdown, that we saw a return to midweek occupancy in December with some slight growth midweek. I mean, it was a little better than flat. And I think as we crossed over into the New Year, we have had a noisy year-to-date run here with weather, especially. We have seen signs of, especially in February, signs of good midweek occupancy growth, so we are encouraged there. As we look at segmentation, we will have more data as we round out current months, and we will string together a trend. It is a little early because we have had some stops and starts with weather to get too excited about the clean week, thinking that there could be some pent-up demand. But what we are seeing is encouraging from a midweek occupancy perspective. We believe that that translates to business transient, or the cause of that is business transient, whether it comes through the negotiated segment or not. And one of the reasons that I highlighted in my prepared remarks, we are seeing an improvement in GDS bookings, which is business oriented. So some positive signs, but as we looked forward and as we contemplated guidance given the stops and starts and, I say every year, on this call at this time that it is just a really difficult time to extrapolate the full year and what we from a business transient standpoint. I think we are a little gun shy because we were seeing slow and steady business transient growth up until the announcement of Doge and those cuts, and that is really when that trend pulled back. Once we see that pick back up and continue, we will get optimistic. I think one of the things that is important is what Justin mentioned earlier, which is the broad diversification from a demand standpoint that our properties attract, and that the team has done a really good job finding additional business in market, and we will continue to do that whether it is midweek occupancy coming through transient and it is business oriented or whether it is group that we are able to put on the books at attractive rates and then drive incremental retail. So the team continues to be really focused. We do believe there is room to grow from a standpoint. It is the trend we are looking for. It is just a little too early to get excited about the recent things we have seen. But we are happy that, despite some of the weather, that people have gotten out, and we have seen some improvement here in February.

Okay. That is helpful, Liz. And then, my second question, I guess, since we are putting a spotlight on it this quarter, we all noticed that share-based comp is gonna go up ‘26 versus ‘25. So maybe just help us understand the mechanical calculation of how that gets put together every year, if you do not mind.

Absolutely. So, the mechanics of how we are approaching our total G&A, which would be now corporate expense in the share-based compensation line items, combined is the same. We start the year at target compensation, and then we adjust throughout the year based on how we are performing in third-party estimates from a total return and relative return metric standpoint. And so we are recalibrating to target-based compensation at the beginning of the year like we do. Last year, we underperformed, and so G&A expense, including share-based compensation, was much lower than target. So that is the disconnect between last year and where we are guiding this year at the midpoint.

I see. So that there is flexibility throughout the year depending on performance.

Yes. So that could change in other words? Okay. Got it. It will likely change. As we move through the year. Meaningfully. If you go back and look at the prior year, the delta is less significant.

Got it. Thank you, guys.

Michael Bellisario with Baird has our next question.

Thanks. Good morning, everyone.

Good morning, Mike.

I just wanna go back to guidance. Can you, just on the expense front here, can you help us bridge the changes in the same store comp pool? I think New York is having a big impact on the headline growth rate as I think that is a very low margin property. And then also, how was Nashville impacting growth rates and margins in ‘26? Any kind of clarification there as sort of, like, the true comp for comp number would be helpful.

Yes. Okay. So there is a lot of noise, especially since and thank you for highlighting. I did not include it in my prepared remarks, we are adding Hotel 57 back to the comparable set so that creates some noise. It is a lower margin asset, and so normalizing 2025 comparable for 57 would have a 40 basis point impact on 2025 margin. So that is one thing to note. When you look at same store total growth at the midpoint, that is actually 1.6%. The additional increase comes from adding Hotel 57 back in, and then, of course, we have Tampa that is off, not part of the same store set that we bought earlier last year. So that is impacting total growth rates, but same store is 1.6%, which is something we are proud of, especially given the top line at the midpoint. You know, we are getting some benefit from not having brand conferences in 2026, which we had in 2025. There also have been some fee reductions for the brands, and we will benefit from that. That is probably a net benefit of all three of those things combined $5,000,000.

Got it. That is helpful. And then similarly just on the manager changes, I know previously you sort of touched on qualitative expectations, but is there any lift explicitly included in your outlook now for 2026?

Not really at this point. And I think we continue to feel good about how the transitions will materialize, remembering that there are some incremental costs in the beginning of any manager transition. Our base case expectations are that we would be offsetting transition costs through more efficient operations as we move through the year, with the primary benefit of the transactions being realized in future years. I think that is, as is the remainder of our guidance, a reasonable base case or a measured base case. As we interact with management at those properties, their expectations for how they might perform are meaningfully higher.

Helpful. That is all for me. Thank you.

And as a reminder, if you would like to ask a question, please press star one. And we will go next to Jay Kornreich with Cantor Fitzgerald.

Hi. Thanks. I just wanted to ask as we move closer to the World Cup, which is tough to pencil. How are you guys thinking about, I guess, just the potential upside to your portfolio either from people attending the games, maybe international travelers extending vacations between games? And what would you estimate as the booking window before the games actually begin?

A lot of good questions there. I want to clarify. We are incredibly excited about the potential for incremental business and incremental travel related to the World Cup. Our team, both at our corporate office and our management teams, are intently focused on working to ensure that we maximize the opportunity, which means layering the appropriate business into the hotels, taking group where appropriate and early bookings, and then blocking rooms to maximize rate as we get closer to the games. The booking window is still short, and so I think a significant part of the reason that, at the midpoint of guidance, we are not reflecting the optimism we have about the potential business is because from our perspective, it is too soon to tell. As we get closer and are in a better position with more business on the books, we will also be in a better position to quantify the actual impact. I think as we have had discussions with our property teams and as we have thought more broadly about how things might play out, we anticipate that this could be a meaningful driver of incremental business as we move through the year. We just are not yet, based on business that we have on the books, in a position to give you a really good estimate.

Okay. That is it for me. Thank you.

Our next question comes from Kenneth G. Billingsley with Compass Point.

Good morning. Thanks for taking my questions here. Two of them here. Is that one on EBITDA growth? So you have expressed a lot of conservatism on the call with regard to growth expectations, revenue being below lower than expense growth guidance. How much is that conservatism impacting your EBITDA guidance, which is lower than last year? How much of it is your conservatism versus just the fewer hotels that are in the comps?

You know, a portion of it will be that we sold assets last year. Though, you know, we also were adding Zamato and Hotel 57 back into the pool of assets. So I think for the most part, it is revenue driven, and it is top line driven. But, certainly, there are some puts and takes with hotels sold and, again, the new property as well.

Okay. Thank you. And then on the Marriott franchise transition, I think it is 13 of them. You mentioned is how do you expect improved returns by doing that transition? Can you talk about where you see that opportunity? And then the other part is does it make them more marketable assets by having them under the franchise agreement?

So to answer the second part of your question first, it makes them infinitely more marketable. We have tremendous amount of flexibility to sell at this point those assets unencumbered by management, which meaningfully increases the potential buyer pool. And, even assuming operations remain constant in terms of net income produced by the assets, we see an ability to the extent we were to sell any of these assets to unlock significant value. Outside of that, I think there are two primary drivers of the that we anticipate for incremental profitability from these assets. The first is that we are, in most cases, consolidating management within markets with management companies that we already have operating in market, which we believe will drive cost savings both on the formerly Marriott-managed assets as well as our other assets in market as we share expenses and build presence with specific management companies in those markets. And then outside of that, Marriott from an efficiency standpoint, that has not been one of their strengths, especially as they work to deploy themselves against the types of assets that we own, and so we also anticipate meaningful reductions in overhead allocations to the properties, which will support a stronger bottom line. I think outside of that, we expect that our managers will bring increased focus and attention to the properties which has potential to drive incremental top line results, meaning stronger rate and occupancy of the hotels. But our primary underwriting was on the cost side and easily justified the transition just through anticipated cost savings.

K. Thank you.

And moving on to Chris Darling with Green Street.

Thanks. Good morning. Justin, in the prepared remarks, I want to say you said that 59% of your hotels have no new construction within, I believe, five mile radius. I think back over the last couple of years, I think that number has sort of consistently gone higher, although sequentially it looks like it went lower this quarter. Wondering if you could dig in a little bit, anything idiosyncratic driving that change, and maybe just a broad overview of what you are seeing in the supply backdrop would be helpful.

Absolutely. So from a supply standpoint, we continue to feel incredibly good about the picture. And I have highlighted on past calls and continue to believe that it meaningfully changes the risk profile of our portfolio, reducing downside risk and improving upside potential as the demand picture improves. Some of the subtle adjustments are nuanced and driven by changes to our overall portfolio. So when you look at the assets that we have been selling and the types of markets that we have been selling out of, those are, in some instances, lower supply markets, and the net result has been shrinking the total number of assets, increasing our concentration in some individual markets. And so, on the margin, the difference that you are seeing between the number we reported last and the number now has as much to do with kind of subtle shifts in our portfolio as it does change in outlook or incremental supply. I think what we have historically been accustomed to in terms of supply growth in our markets is meaningfully greater exposure than we have now. And given the dynamics that continue to exist between construction costs and profitability, we see a meaningful impediment to increased supply growth for the foreseeable future.

Okay. That makes sense. Helpful to hear sort of the nuance there. As a follow-up, if we circle back to the capital allocation discussion, what is the level of appetite you are seeing among private buyers for portfolio deals these days? Or is it safe to say, you know, one-off deals still represent best execution?

You know, we, and I have commented in the past. Our team continues to probe the market with various size potential portfolio transactions. To date, we continue to see more attractive pricing for individual assets. I think that potentially shifts as we see industry numbers improve more universally. As investors in order for us to achieve portfolio premiums, generally speaking, investors need to see an industry level trend that would advantage them from buying in scale. And what we are finding more often is that we are able to maximize value by creating the story around an individual asset, for often, a local owner-operator that has ties to the individual market and ability to bring incremental efficiencies to the property. So I think based on our track record over a more extended period of time, I think we have demonstrated an ability to pivot as we see changes in the overall marketplace. For the near term, my expectations are that we will be likely transacting on individual assets, but we will continue to probe and look for other opportunities.

Alright. Understood. Appreciate the time.

And this now concludes our question and answer session. I would like to turn the floor back over to Justin Knight for closing comments.

We appreciate you taking the time to join with us this morning and are excited about the year ahead of us. As always, I hope that as you are traveling, you will take the opportunity to stay with us at one of our hotels, and we look forward to providing you with updates as we continue through the year.

Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines and have a wonderful day.