Apple Hospitality REIT, Inc. (NYSE:APLE) Q2 2018 Earnings Conference Call - Final Transcript
Aug 07, 2018 • 09:00 am ET
Greetings, and welcome to the Apple Hospitality REIT's Second Quarter 2018 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Kelly Clarke, Vice President, Investor Relations. Please go ahead.
Thank you, and good morning. We welcome you to Apple Hospitality REIT's second quarter 2018 earnings call on this, the 7th day of August 2018. Today's call will be based on the second quarter 2018 earnings release, which was distributed yesterday afternoon.
(Forward-Looking Cautionary Statements)
For a copy of the earnings release or additional information about the company, please visit applehospitalityreit.com.
This morning, Justin Knight, our CEO; Krissy Gathright, our COO; and Bryan Peery, our CFO, will provide an overview of our results for the second quarter of 2018 and an outlook for the sector and for the company. Following the overview, we will open the call for Q&A.
At this time, it is my pleasure to turn the call over to our CEO, Justin Knight.
Thank you, Kelly, and good morning.
Hotel operations for our portfolio remained solid during the second quarter of this year, with comparable hotels RevPAR growth of 1.3% for the quarter and 1.1% for the first half of the year. Although there was an -- there is increased geopolitical uncertainty, macroeconomic trends within the US remained strong and unemployment levels continued to indicate a robust workforce.
Amid this steady economic growth environment with high occupancy levels and a tight labor market, we remain focused on driving rate and cost-effective operations. We are pleased with our ability to achieve a strong hotel EBITDA margin of 40% for the quarter and 38% for the six months ended June 30.
As a result of increased demand related to hurricane recovery and restoration efforts in Houston and Florida from September through the end of 2017, we expect challenging year-over-year comps for the latter part of this year. However, we remain confident in the full year 2018 guidance we provided with our year-end 2017 earnings.
In addition to our focus on operations, we continue to refine and strengthen our portfolio of hotels through meaningful transactions and renovations that we feel will enhance shareholder value over the long term. Since the beginning of the year, we have acquired four hotels for an aggregate purchase price of approximately $137 million.
The Hampton Inn & Suites Memphis-Beale Street and the Hampton Inn & Suites Atlanta-Downtown, both in exceptional locations, were acquired during the first quarter of this year. We anticipate that the new management teams in place and significant renovations planned for 2019 will further enhance the competitive position of these hotels within their respective markets.
On May 2, we acquired the newly-built Hampton Inn & Suites Phoenix Downtown. This exceptionally well-located hotel has exposure to a wide variety of corporate, academic, medical, government and leisure demand generators. The hotel is adjacent to Arizona State University's Downtown Phoenix campus and in close proximity to numerous corporate offices and attractions, including