Apple Hospitality REIT Q1 2021 Overview
Apple Hospitality REIT Q1 2021 Overview
Apple Hospitality REIT Q1 2021 Overview
@financepresentations4 weeks ago
I NVESTOR PRESENTATION
APPLE HOSPITALITY REIT
J U N E 2 0 2 1 · N Y S E : A P L E
- (1) Average Effective Age represents years since hotels were built or last renovated. Average actual age of hotels is 14 years. The TripAdvisor® rating is based on lifetime scores for the Apple Hospitality portfolio of hotels through March 31, 2021.
- (2) Net Total Debt to Total Capitalization calculation based on (as of March 31, 2021) total debt outstanding, net of cash and cash equivalents ('net total debt outstanding'), divided by net total debt outstanding plus equity market capitalization based on the Company's closing share price of $14.57 and outstanding common shares. Based on hotels owned as of March 31, 2021.
- · Average executive tenure with the Apple REIT Companies is 14 years
- · Established and operated 8 public hospitality REITs
- · Raised and invested approximately $7 billion in hotel assets
- · Purchased 439 hotels
- · Managed over $925 million in CapEx and renovation spending
- · Sold 4 REITs in 3 transactions totaling $2.7 billion
- · Merged 3 REITs and listed Company on NYSE
- · Completed $1.3 billion Apple REIT Ten merger
- · Representation on over 30 brand and industry advisory boards and councils
- · Strongest operational results since beginning of pandemic with sequential improvement each month during the quarter
- · Performance driven by mix of leisure and business demand, consisting of both transient and small group bookings
- · Efficient operating model of rooms-focused hotels produced sufficient cash to cover property-level and corporate-level costs
- · All of the Company's hotels were open and receiving reservations
- · Completion of amendments to unsecured credit facilities in March 2021 enhances flexibility and ability to exit the waiver period
- · Select-service hotels franchised with industry-leading brands have proven appeal with broadest group of customers
- · Broad geographic diversification provides exposure to wide variety of markets and demand generators
- · Not dependent on large group business
- · Data-driven asset management team and industry-leading operators maximize property-level performance
- · Potential for increased long-term operational efficiencies
- · Well-maintained, high-quality portfolio with substantial long-term value
- · Scale ownership of rooms-focused hotels minimizes G&A load per key and provides fixed cost efficiencies
- · Proven ability to maximize and grow Adjusted Hotel EBITDA margin from peak to peak
- · Positive corporate cash flow preserves strength of balance sheet and equity value and bolsters liquidity
- · Conservative capital structure with staggered maturities lowers capital costs
- · March 2021 amendments to unsecured credit facilities enhance flexibility and ability to exit the waiver period
- · Poised to be acquisitive and optimize portfolio through opportunistic transactions
- (1) Explanations of and reconciliations to net loss determined in accordance with generally accepted accounting principles ('GAAP') of the Company's non -GAAP financial measures, including Modified Funds from Operations ('MFFO'), are included in the following pages.
- (1) Brand Type based on number of guest rooms. Extended Stay includes Residence Inn by Marriott, TownePlace Suites by Marriott, Home2 Suites by Hilton, Homewood Suites by Hilton and Hyatt House. Suite Product includes Fairfield Inn & Suites by Marriott, SpringHill Suites by Marriott, Embassy Suites by Hilton and Hampton Inn & Suites by Hilton. Other Select Service includes Hampton Inn by Hilton, Hilton Garden Inn, Courtyard by Marriott, Fairfield Inn by Marriott, Hyatt Place and independent boutique hotels. Full Service includes Marriott.
Certain statements made in this presentation are forward-looking statements, including statements regarding the impact to Apple Hospitality REIT, Inc.'s (the 'Company,' 'Apple Hospitality,' 'Apple' or 'APLE') business and financial condition from, and measures being taken in response to, the COVID -19 pandemic. These forward-looking statements include statements regarding our intent, belief or current expectations and are based on various assumptions. These statements involve substantial risks and uncertainties. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. Forward-looking statements may include, but are not limited to, statements regarding net asset value and potential trading prices. Words such as 'anticipates,' 'believes,' 'expects,' 'e sti mates,' 'projects,' 'plans,' 'intends,' 'may,' 'will,' 'would,' 'outlook,' 'strategy,' and similar expressions are intended to identify forward -looking statements, although not all forward-looking statements contain these identifying words. Actual results or outcomes may differ materially from those contemplated by the forward-looking statement. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or reverse any forward-looking statement to reflect changed assumptions or the occurrence of unanticipated events or changes to future operating results, unless required to do so by law. Currently, one of the most significant factors that could cause actual outcomes to dif fer materially from the Company's forward -looking statements continues to be the adverse effect of COVID19, including resurgences and new variants, on the Company's business, financial per formance and condition, operating results and cash flows, the real estate market and the hospitality industry specifically, and the global economy and financial markets generally. The significance, extent and duration of the continued impacts caused by the COVID-19 outbreak on the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence at this time, including the scope, severity and duration of the pandemic, the extent and effectiveness of the actions taken to contain the pandemic or mitigate its impact, the speed of the vaccine roll-out, the efficacy, acceptance and availability of vaccines, the duration of associated immunity and efficacy of the vaccines against emerging variants of COVID-19, the potential for additional hotel closures/consolidations that may be mandated or advisable, whether based on increased COVID-19 cases, new variants or other fact ors, the slowing or rollback of ' reopenings ' in certain states, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled 'Risk Factors' in the Company's Annual Report on Form 10 -K for the fiscal year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. Such additional factors include, but are not limited to, the ability of Apple Hospitality to effectively acquire and dispose of properties; the ability of Apple Hospitality to successfully integrate recent and pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions; reduced business and leisure travel due to travel-related health concerns, including the widespread outbreak of COVID-19 or an increase in COVID-19 cases or any other infectious or contagious diseases in the U.S. or abroad; adverse changes in the real estate and real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; changes in laws or regulations or interpretations of current laws and regulations that impa ct Apple Hospitality's business, assets or classification as a real estate investment trust; or other risks detailed in filings made by Apple Hospitality with the Securities and Exchange Comm ission ('SEC'). Although Apple Hospitality believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this presentation will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Apple Hospitality or any other person that the results or conditions described in such statements or the objectives and plans of Apple Hospitality will be achieved.
COVER PHOTOS: HILTON GARDEN INN, MADISON, WI; SPRINGHILL SUITES, BURBANK, CA; HYATT HOUSE & HYATT PLACE, TEMPE, AZ; HAMPTON INN & SUITES, PHOENIX, AZ
COMPANY PROFILE & PROVEN INVESTMENT STRATEGY
Scale Ownership of Upscale, RoomsFocused Hotels
232 HOTELS
29,753 GUEST ROOMS
99% ROOMSF O C U S E D
Industry-Leading Brands and Operators
13
BRANDS
16
MANAGEMENT COMPANIES
Consistent Reinvestment (1)
5 yrs AVERAGE
E F F E C T I V E A G E
4.3
AVERAGE T R I PA D V I S O R ® RATING
Strong, Flexible Balance Sheet (2)
32% NET TOTAL DEBT TO TOTAL CAPITALIZATION
200
HOTELS UNENCUMBERED
Note: Hotel portfolio statistics as of May 6, 2021. Market categorization based on STR designation.
MANAGEMENT TEAM WITH DEEP INDUSTRY E X P E R I E N C E O V E R M U LT I P L E H O T E L C Y C L E S
MISSION
We are a leading real estate investment company committed to increasing shareholder value through the distribution of attractive dividends and long-term capital appreciation.
VALUES
Hospitality -We are thoughtful in our interactions with others and know that strong, caring relationships are the core of our industry.
Resolve -We are passionate about the work we do and are steadfast in our commitment to our shareholders.
Excellence -We are driven to succeed and improve through innovation and perseverance.
Integrity -We are trustworthy and accountable.
Teamwork -We support and empower one another, embracing diversity of opinion and background.
KEY TAKEAWAYS
· FIRST QUARTER 2021 PERFORMANCE UPDATE
· PORTFOLIO POSITIONED FOR OUTPERFORMANCE THROUGH RECOVERY
· BALANCE SHEET POISED FOR FUTURE GROWTH
MFFO OUTPERFORMANCE
MFFO outperformance preserves balance sheet and equity value
Upscale/Rooms-Focused
Upper Upscale/Full-Service
Upscale & Upper Upscale Combined
Source: Company filings. Assumptions may vary by company. Q1 2021 Trailing Twelve Months MFFO/AFFO per share calculated as full year 2020 MFFO/AFFO per share less Q1 2020 per share plus Q1 2021 per share.
HAMPTON INN & SUITES, PHOENIX, AZ
PORTFOLIO POSITIONED FOR OUTPERFORMANCE
Note: Hotel portfolio statistics as of May 6, 2021.
OPERATING TRENDS
Proven ability to achieve corporate-level breakeven at approximately $50 RevPAR
Note: Actual breakeven RevPAR depends on mix of occupancy and rate. Estimated breakeven RevPAR reflects operational costs and occupancy and ADR trends since March 2020 and is before capital expenditures.
ACCELERATING OCCUPANCY FOLLOWING SEASONAL DECLINES
Recent occupancy trends highlight strength of demand
77%
y
anc
up
c
Oc
Source: Weekly data provided by STR for hotels owned by the Company for the periods noted and may differ from actual results achieved.
WEEKDAY VS. WEEKEND OCCUPANCY
Leisure travel continues to lead recovery
Weekday occupancy is strengthening showing recovery in business demand
100%
Week ended
Weekday
Weekend
Source: Data provided by STR for hotels owned by the Company for the periods noted, including all rooms available for consolidated hotels, and may differ from actual results achieved. Weekday occupancy includes Sunday through Thursday nights and weekend occupancy includes Friday and Saturday nights.
Oc c up anc y
% OF HOTELS BY OCCUPANCY TIER
Building occupancy across portfolio
W
e
e
k
e
n
d
e
d
0% - 15% 15% - 25% 25% - 50% 50% - 70% 70% + (1)
Source: Weekly data provided by STR for hotels owned by the Company for the periods noted and may differ from actual results achieved.
(1) Consolidated hotels included in 0% - 15% occupancy tier.