Michael Herring's questions to Apple Hospitality REIT Inc (APLE) leadership • Q1 2025
Question
Michael Herring asked how hotel operators are approaching cost mitigation in response to the shifting demand mix. He also questioned whether the hotel industry, and Apple's portfolio in particular, is better positioned to handle a potential recession due to muted supply growth.
Answer
CFO Liz Perkins explained that while they are always focused on efficiency, they are not in 'deep cost mitigation territory' as occupancy remains strong, with efforts centered on productivity and reducing contract labor. CEO Justin Knight asserted that the lack of new supply in their markets significantly improves their risk profile, limiting downside and increasing upside potential, positioning them for stronger relative performance in any economic environment compared to past cycles.