Apple Hospitality REIT Acquires Hampton Inn & Suites by Hilton Downtown St. Paul $31.7 million, or Approximately $198,000 Per Key

USA, Richmond, Virginia. March 28, 2019

Apple Hospitality REIT, Inc. (NYSE: APLE) (the "Company" or "Apple Hospitality") today announced the acquisition of the 160-room Hampton Inn & Suites by Hilton Downtown St. Paul (the "Hotel") for a purchase price of $31.7 million, or approximately $198,000 per key.

"The Hampton Inn & Suites is ideally located in downtown St. Paul and benefits from the area's wide variety of corporate, leisure and healthcare demand generators," said Nelson Knight, Executive Vice President and Chief Investment Officer of Apple Hospitality. "St. Paul is a vibrant city with a diversified economy, home to numerous corporate offices including 3M, Ecolab, The Travelers Companies and Securian Financial Group. The Hotel, which opened in November of 2016, complements our existing portfolio and is consistent with our strategy of investing in rooms-focused hotels that are aligned with industry-leading brands and located in markets that provide a wealth of business drivers and strengthen the geographic diversification of our portfolio."

The Hotel is located at 200 7th Street West in St. Paul, Minnesota, across the street from Xcel Energy Center, Saint Paul RiverCentre, the Legendary Roy Wilkins Auditorium and Ordway Center for the Performing Arts, and within five miles of the recently opened Allianz Field. The Hotel is within walking distance of the Mississippi River and St. Paul's wide variety of dining options, entertainment venues and recreational activities. In addition, four major healthcare facilities are near the Hotel including Children's Minnesota St. Paul Hospital, United Hospital, Regions Hospital and HealthEast St. Joseph's Hospital. According to data provided by STR for the trailing 12 months ended January 31, 2019, RevPAR for the Minneapolis/St. Paul market improved by 4.5 percent, as compared to the prior 12-month period.

Apple Hospitality acquired the Hotel from a subsidiary of Vista Host. Following this acquisition, the Apple Hospitality portfolio includes 242 hotels with more than 30,900 guest rooms geographically diversified throughout 34 states.

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Revenue Management: Focus On Profit

Revenue Management is still a relatively new profession within hotel operations and as such, it continues to evolve. One significant trend in this area is a shift away from using revenue as the foundation to generate key performance indicators (KPIs) and to instead place the emphasis on profit. Traditionally, revenue managers have relied on total revenue per available room (TrevPAR) and revenue per available room (RevPAR) as the basis of their KPIs. Now, some revenue managers are using gross operating profit per available room (GOPPAR) as their primary KPI. This puts profit at the center of revenue management strategy, and managers are increasingly searching for new ways to increase the profitability of their hotels. Return on Investment is the objective of any hotel investment, so it is only logical that profitability and ROI will be emphasized going forward. Another trend is an expanded focus on direct hotel bookings. Revenue managers know that one way to increase profitability is to steer guests away from online travel agencies (OTAs) and book directly with the hotel. This tactic also reinforces brand identity and loyalty, and encourages repeat business. In addition, it provides a valuable platform to market the hotel directly to the customer, and to upsell room upgrades or other services to them. Another trend for revenue managers involves automation in their software programs. Revenue management systems with automation are far more desirable than those without it. Automating data entry and logistics increases efficiency, allowing managers to spend more time on formulating strategy. As a bonus, an automated system helps with aggregating and interpreting data. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.