With a deep background in the travel and tourism industry and a sharp focus on the dynamics of entertainment and event-driven markets, Katarina Railko is a leading voice in hospitality real estate. We’re sitting down with her to discuss the recent landmark acquisition of the Motto by Hilton in Nashville by Apple Hospitality REIT. Our conversation will explore the strategic thinking behind this $98 million investment, digging into how the city’s incredible market performance justifies such a price tag. We’ll also touch on the unique appeal of the Motto brand, the strategy for capturing Nashville’s diverse mix of leisure and business travelers, and what this high-profile deal signals for future investment in other vibrant, high-growth cities across the country.
Your new 260-key Motto by Hilton was acquired for $98.2 million. Could you walk us through the valuation process for this property and explain how Nashville’s high RevPAR, reported at 110% above the industry average, justified that specific investment level?
When you look at a deal like this, you have to see beyond the initial $98.2 million price tag, or even the $378,000 per key. The valuation is a story about the market’s sheer energy and performance. In Nashville’s downtown submarket, the Revenue Per Available Room, or RevPAR, is hovering around $211. That’s not just good; it’s an incredible 110% above the industry average. This isn’t a speculative bet; it’s an investment backed by undeniable, sustained demand. The hotel is brand new, perfectly positioned within walking distance of Music City’s most powerful demand generators—from the Ryman to Bridgestone Arena—and that’s what turns a high price into a smart, long-term strategic investment.
The Motto brand is a new addition to your portfolio of 217 hotels. What unique operational advantages or guest experiences, such as its Confirmed Connecting Rooms, does this brand offer, and how will it complement your existing 115 Hilton-branded properties to drive performance?
Bringing the Motto brand into the fold is a very intentional, strategic move. It’s an innovative, rooms-focused brand that perfectly complements our existing portfolio without creating unnecessary overlap. The signature feature, the Confirmed Connecting Rooms, is a game-changer, especially in a market like Nashville that draws so many groups. The ability for guests to link up to six rooms at once is a powerful tool that caters to everything from bachelor parties and family reunions to corporate teams traveling together. It allows us to capture a segment of the market that a traditional hotel room can’t, enhancing the performance of our already strong collection of 115 Hilton-branded properties by offering a tailored, flexible solution.
The release cites both strong leisure demand near Broadway and growing business demand. Can you share some specific on-the-ground metrics that illustrate this trend and detail your strategy for the hotel to capture both of these valuable market segments simultaneously?
Nashville has this incredible dual engine driving its growth. On one hand, you have what we call “resilient leisure demand,” which you can feel in the air walking down Broadway. It’s fueled by a wealth of entertainment and sporting venues that keep the city buzzing year-round. On the other hand, you have a powerful wave of “strengthening business demand,” with both large and small corporations relocating to Nashville’s business-friendly environment. Our strategy is to leverage the hotel’s prime location, just a few blocks off Broadway, to be the ideal home base for both. We capture the high-energy weekend and event crowds while simultaneously offering a sophisticated, modern product for the weekday business traveler, ensuring the property performs strongly seven days a week.
Given that Nashville’s RevPAR is nearly 79% above your company’s average, how does adding this high-performing asset influence your overall portfolio strategy? Please detail the criteria you’ll use for future acquisitions in other similarly dynamic, high-growth markets.
Adding an asset that performs 79% above your portfolio’s average RevPAR doesn’t just raise the bar; it redraws the map for future growth. This acquisition serves as a new benchmark. It reinforces our strategy of targeting dynamic, high-growth markets where we can secure premium, well-located assets that drive superior returns. For future acquisitions, we’ll be hunting for markets that exhibit that same potent mix of resilient leisure drivers and a robust, expanding corporate base. We will be looking for cities with a strong cultural identity, a thriving entertainment scene, and a business-friendly climate that attracts investment and talent, ensuring that new acquisitions can deliver the kind of long-term operating performance we are confident we’ll see in Nashville.
What is your forecast for the Nashville hospitality market, particularly regarding the balance between new supply and sustained demand growth over the next few years?
My forecast for the Nashville market remains exceptionally positive. While new supply is always a consideration in any high-growth market, Nashville’s demand trends are both incredibly strong and diverse. The city’s appeal isn’t based on a single industry or a fleeting trend; it’s a deep-rooted cultural and economic hub. You have the constant draw of music and tourism, the influx of major corporate headquarters, and its growing reputation as a top-tier destination for conventions and events. This multifaceted demand provides a very strong foundation that I believe will continue to absorb new hotel rooms while maintaining healthy occupancy and rate growth. This acquisition reflects a deep confidence that the city’s vibrant energy will continue to fuel strong operating performance for the long term.
