Apple Hospitality REIT Inc. (APLE) CEO Justin Knight recently unveiled the strategy APLE will follow as a hospitality industry REIT, targeting high margins and stable performance.
“This segment consists of a rooms-focused product — what’s known in the industry as upscale, select-service and extended-stay hotels — where the primary focus of the offering is providing high-quality rooms for business and leisure travelers. We enhanced our strategy by partnering exclusively with Hilton and Marriott, which hold the strongest brands within this particular sector. This focus has enabled us to gain deep expertise with specific brands, including Courtyard by Marriott, Residence Inn by Marriott, Hilton Garden Inn, Homewood Suites by Hilton and Hampton Inn & Suites by Hilton, and also to have significant influence over the brands themselves,” he said.
Knight says APLE is further declining risk by diversifying geographically, and he says the REIT maintains a strong balance sheet.
“Our management team sits on a large number of advisory boards where decisions are made about brand services and brand standards, and we feel that’s important as we look to enhance and grow the value of our shareholders’ investment with us. We further look to create stability in the portfolio through broad geographic diversification. Our portfolio represents breadth across different geographic areas and market types. This is to avoid overexposure to any single industry or regional trend, which might increase volatility in the portfolio. Additionally, we have built the portfolio largely through equity investments, allowing us to maintain one of the strongest balance sheets in the industry,” he said.
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