Apple REIT CEO on maintaining margins as growth slows
 
Apple REIT CEO on maintaining margins as growth slows
18 OCTOBER 2019 8:15 AM

In a video interview with Hotel News Now, Apple Hospitality REIT President and CEO Justin Knight discusses his company’s strategy for maintaining profitably, and why the limited-service model can sustain economic challenges.

PHOENIX—During a busy first half of the year in which the company sold nine assets, acquired two and signed contracts for seven more, Apple Hospitality REIT stayed focused on maintaining margins in a low revenue-growth environment, President and CEO Justin Knight said.

In a video interview with Knight during The Lodging Conference, Knight said Apple’s strategy is even more relevant now than it has been in the past. The real estate investment trust is focused on branded select-service hotels in strong markets with multiple demand generators, he said.

In an environment in which it’s tough to move the needle from a rate standpoint, he said his asset management team taps into many different strategies for maintaining profitability.

“We focused a lot over the years on productivity initiatives, becoming more energy efficient … looking for ways to improve our bottom line through really fine-tuning our operating model,” he said.

In addition, Apple spent $33 million on capital expenditures in the first half of the year, he said.

Watch the video interview below for more from Knight on Apple’s portfolio, downturn prep and more.

Video highlights
Knight on what makes the limited-service model attractive during a downturn: “From a consumer standpoint, the value proposition of select-service becomes even more relevant as we enter more challenging economic periods of time. From an ownership side, the same benefits that work to our favor during periods of economic prosperity, benefit us in periods where there’s less certainty—mainly stronger margins, which tend to be more stable throughout an economic cycle, and really an operating model that’s incredibly efficient.”

1 Comment

  • Johannes October 23, 2019 1:45 PM Reply

    A Limited service Concept Must be efficient but can have 5 star quality

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.