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.
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.”