Apple Hospitality REIT's Q4 2024: Diverging Views on Expenses, Asset Strategy, and Market Dynamics

These are the key contradictions discussed in Apple Hospitality REIT's latest 2024Q4 earnings call, specifically including: Operating Expense Growth Trends, Strategy for Smaller Asset Dispositions, Hotel Portfolio Composition and Strategy, Wage and Benefit Growth Expectations, and Transaction Market Environment:



Strong Performance and Revenue Growth:
- Apple Hospitality REIT reported a 4% increase in comparable hotels total revenue for Q4 2024 compared to the same period of 2023, and a 2.5% increase for the full year.
- This growth was driven by steady improvement in business transient demand, continued strength in leisure travel, and limited supply growth in key markets.

akustic EBITDA and Earnings Improvement:
- Fourth-quarter adjusted EBITDAre increased by approximately 7%, and modified funds from operations increased by 6% compared to the same period of 2023.
- The improvement was attributed to strong performance in L.A. and D.C. markets, offsetting weather-related disruptions, and favorable supply-demand dynamics.

Dividend Yield and Share Repurchase:
- The company maintained a strong dividend yield of approximately 6.5%, paying distributions totaling $58 million for Q4 2024.
- Share repurchases were priced at around 1.5x spread to recent dispositions, highlighting an attractive investment opportunity.

Asset Management and Acquisitions:
- Apple Hospitality REIT acquired 2 hotels for $196 million and sold 6 hotels for over $63 million in 2024.
- Strategic acquisitions contributed positively to overall portfolio performance, with recent acquisitions yielding up to 9% after CapEx.