Hampton Inn & Suites, Phoenix, AZ

Sustainability

Apple Hospitality REIT is committed to enhancing and incorporating sustainability opportunities into our investment and asset management strategies, with a focus on minimizing our environmental impact. We seek to invest in proven sustainability practices when renovating our hotels and in portfolio-wide capital projects that can enhance asset value while also improving environmental performance. We target specific environmental efficiency enhancements, including equipment upgrades and replacements, that reduce energy and water consumption and improve waste management. As part of our acquisition due diligence, we perform sustainability assessments to identify areas of opportunity that will improve the property's environmental performance. Additionally, when working with developers to construct new hotels, we strive to implement environmentally efficient construction and building functionality. Our current environmental impact and certain strategies, programs and accomplishments are highlighted below.

Key Metrics for 2020

The Company's 230 rooms-focused hotels, owned at December 31, 2020, comprise approximately 19 million square feet of building space and utilized the following energy resources in 2020:

212,000

Energy Consumption Megawatt Hours

(decline of 14% from 2019)

11.3

Total Kilowatt Hours Per Square Foot

 

98%

Of Portfolio Enrolled in U.S. EPA's

Energy Star® Program

$6.65¹

Utility Cost Per Occupied Room

(Includes All Hotels Owned During the Year)

713,000

Water Consumption Kilogallons

(decline of 26% from 2019)

8,200

Non-Recycled Waste In Tons

(decline of 38% from 2019)

16%

Diversion Rate

 

Note: Changes from 2019 reflect hotels with available full year information in each year.

(1) The Company’s average 2020 total utility cost of $6.65 per occupied room represents a 39% increase from 2019. The Company’s average 2019 total utility cost per occupied room was $4.78. Based on 2019 data from U.S. Hotels HOST Almanac published by STR Analytics in 2020, limited-service hotels averaged $5.07 per occupied room (average upscale and upper-midscale class) and full-service hotels averaged $9.16 per occupied room throughout the industry. The COVID-19 pandemic significantly impacted occupancy levels beginning in March 2020, and as a result, total utility costs for the Company decreased on an absolute basis in 2020 as compared to 2019. The cost structure and efficient nature of the Company’s primarily rooms-focused hotels allows them to operate cost effectively even at very low occupancy levels, and the Company worked to keep its hotels open despite low occupancy levels. The Company utilized energy management systems to minimize utility usage on unused floors, however, minimum utility usage is required for the protection of the Company’s assets and utility costs per occupied room increased due to the drop in occupancy driven by the COVID-19 pandemic. In general, energy, water and waste metrics were materially impacted by declines in occupancy in 2020.

Environmental Stewardship

The environment has always been a key consideration in the operations of our hotels. We actively monitor key performance indicators of energy, water and waste at each property, utilizing historical, market and industry data to identify properties where improvements can be made and work with our management companies to address the opportunities. We also continually review systems and processes for broader scale implementation. Examples of projects that have helped us reduce electric and water usage over the past four years include the installation of LED lighting, Energy Management Systems, Efficient HVAC Equipment, Irrigation Systems and High Efficiency Plumbing. In addition to our efforts improving environmental efficiencies, the rooms-focused hotels we invest in are more operationally and environmentally efficient than full-service hotels, with the Company’s kWh per square foot at 11.3 in 2020, compared to an average of approximately 29.0 for full-service REITs in 2019 (based on publicly available information) and 19.4 in 2020 for our own full-service hotels.

To enhance our commitment to sustainable operations, Apple Hospitality REIT established a formal energy management program in 2018, engaging resources throughout our Company to ensure that energy, water and waste management are a priority not only within the Company, but also with our management companies and brands. Many of the hotel brands have energy, water and waste management programs that we utilize to improve our environmental performance, and we work closely with the brands to identify priorities for future investment that will further advance sustainable operating standards.

Currently, Apple Hospitality participates in the following brand sustainability programs:

Apple Hospitality’s investment in sustainable operations is highlighted by its 2020 total utility cost of $6.65¹ per occupied room as compared to 2019 total utility costs of $5.07 and $9.16 per occupied room for limited-service and full-service hotels, respectively, published by STR Analytics in 2020.

ROOMS-FOCUSED HOTELS

ROOMS-FOCUSED HOTELS

One of the many reasons Apple Hospitality invests primarily in the rooms-focused sector of the lodging industry is the environmental efficiency of rooms-focused buildings. With less open or unused space and less equipment needed for operations, the buildings use less electricity, water and natural gas on a per-square-foot basis as compared to full-service or resort hotels. For example, the Company’s total kWh per square foot of 11.3 is significantly lower than the measure published by full-service lodging REITs. Additionally, Apple Hospitality’s 2020 average total utility cost of $6.65¹ per occupied room highlights both the Company’s efforts to operate its hotels effectively and the inherent efficiency of the buildings.

ENERGY & WATER CONSERVATION GUIDELINES

ENERGY & WATER CONSERVATION GUIDELINES

In 2018, Apple Hospitality implemented energy and water conservation guidelines for all of our hotels. Developed jointly with our energy partners, these best practices provide our hotels and management companies with operating guidelines to consistently and responsibly use energy and water across the entire portfolio. The guidelines, documented in both English and Spanish, cover daily processes in all facets of hotel operations, as well as considerations for the procurement of more energy and water efficient equipment and systems.

LED LIGHTING

LED LIGHTING

Since 2017, the Company has actively initiated LED installation projects within its hotels and their parking lot lighting fixtures. The LED bulbs require approximately 70% less energy on average when compared to the previously existing fixtures. The increased lifespan of these bulbs also means there will be less disposal, reducing the contamination to the environment and landfills. By converting these fixtures to LED, the hotels reduced the total annual energy consumption by an estimated 7% at each hotel.

ENERGY MANAGEMENT SYSTEMS & HVAC EQUIPMENT

ENERGY MANAGEMENT SYSTEMS & HVAC EQUIPMENT

In locations with significant seasonal temperature patterns, the Company has worked to install guest room energy management systems, which allow more efficient control of heating, ventilation and air conditioning (HVAC) equipment, throughout each hotel. In conjunction with our average annual spend of more than $5 million on Energy Star rated HVAC equipment, we are able to reduce energy consumption and save our hotels 10-15% in heating and cooling costs annually.

IRRIGATION SYSTEMS & PLUMBING

IRRIGATION SYSTEMS & PLUMBING

Over the past several years, the Company installed smart irrigation watering systems at hotels with high water usage for landscaping. A smart irrigation controller has built-in water saving features including a sensor to adjust to the optimal sprinkler run time based on the local weather conditions. Smart controllers help to provide a healthy, beautiful landscape while reducing water usage. Additionally, the Company identified hotels with above average water usage and worked to improve the plumbing within these hotels. These combined projects have reduced water usage on average by almost 20% per year at these hotels.

New Construction

As part of our overall strategy, the Company works with high-quality developers to build new hotels that are acquired by the Company at the hotel’s opening. Throughout the construction process, we work with the developers to identify and implement sustainable practices in the construction of each hotel and develop sustainable operating functionality. A few of the best practices utilized by our developers include:

  • LED lighting throughout the hotel
  • Guest room energy management systems
  • Recycled content
  • Energy Star appliances
  • Low-emissivity glass for windows
  • Low VOC paint
  • Greenguard Gold gypsum board
  • Ultra-high-efficiency water heaters
  • High-efficiency toilets and plumbing fixtures

 

 

For information on our continuing social responsibility efforts, click here.

For information on our corporate governance, click here.

 

(1) The Company’s average 2020 total utility cost of $6.65 per occupied room represents a 39% increase from 2019. The Company’s average 2019 total utility cost per occupied room was $4.78. Based on 2019 data from U.S. Hotels HOST Almanac published by STR Analytics in 2020, limited-service hotels averaged $5.07 per occupied room (average upscale and upper-midscale class) and full-service hotels averaged $9.16 per occupied room throughout the industry. The COVID-19 pandemic significantly impacted occupancy levels beginning in March 2020, and as a result, total utility costs for the Company decreased on an absolute basis in 2020 as compared to 2019. The cost structure and efficient nature of the Company’s primarily rooms-focused hotels allows them to operate cost effectively even at very low occupancy levels, and the Company worked to keep its hotels open despite low occupancy levels. The Company utilized energy management systems to minimize utility usage on unused floors, however, minimum utility usage is required for the protection of the Company’s assets and utility costs per occupied room increased due to the drop in occupancy driven by the COVID-19 pandemic. In general, energy, water and waste metrics were materially impacted by declines in occupancy in 2020.

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