Apple Hospitality Avoids $20,000 Fee and Reduces Natural Gas Costs

The opportunity

Apple Hospitality REIT sought to manage an account transition while evaluating energy costs at several of its California hotels.

Apple Hospitality REIT, a publicly traded company with one of the largest portfolios of upscale hotels in the U.S., needed to update utility account numbers at several California properties following a management company change. Each hotel was operating under an existing third-party natural gas supply agreement signed by the previous manager.

Apple engaged Tradition Energy to review the existing agreements and assist with the account transition. Beyond facilitating the administrative changes, the engagement provided an opportunity to evaluate whether the existing supply arrangements remained financially advantageous for the affected properties.

Tradition compared the existing third-party contract pricing against prevailing SoCalGas utility rates and determined that the contracted supply was significantly more expensive. This reflected a common California market dynamic in which third-party natural gas supply can carry a premium over utility service.

Rather than disrupting the existing agreements, Tradition initially recommended completing the account assignment and maintaining the contracts through expiration. The properties could then transition back to local utility service and take advantage of lower available rates.

When the incumbent supplier refused to process the account assignment and attempted to impose an early termination fee, Tradition’s Client Services team challenged the charge. This protected Apple from an unnecessary expense while creating an opportunity to transition the affected properties to lower-cost utility service sooner.

The Result:
Avoided Fees & Lower Energy Costs

Avoided Fees

Tradition successfully challenged the incumbent supplier’s attempted early termination fee, eliminating the entire $20,000 charge for Apple Hospitality.

Significantly Lower Rates

Apple transitioned the affected properties back to utility service at rates approximately three times lower than its previous third-party natural gas supply agreements.

Improved Contract Oversight

Tradition’s review helped Apple navigate the management transition, resolve supplier issues, and establish a more cost-effective natural gas supply approach for the affected California hotels.

Client Testimonials

Our Tradition Energy advisor has been extremely knowledgeable and helpful – helping us not only purchase RECs, but also likely change our natural gas provider.

Sustainability Manager,
Entertainment Company

The Tradition relationship is incredibly important to us and I’m thrilled with where we are going! Your effort here with our Houston hotel group is another fine example of why Tradition is best in class!

Director, Operational Planning,
Hospitality Owner/Operator

Tradition Energy was unique in that they treated our energy procurement request as a process rather than just a one-time transaction. They took the time to educate us on the market conditions, helped formulate a strategy based on multiple procurement options, and then demonstrated the required patience to work the market until a favorable rate was obtained.

Director of Facilities,
Regional Gaming Operator

With facilities nationwide, it is important to be able to trust those with the expertise to advise us and facilitate cost reduction with such a volatile commodity.

Corporate Purchasing Manager,
National Hospitality Operator

Our Tradition Energy advisor has been extremely knowledgeable and helpful – helping us not only purchase RECs, but also likely change our natural gas provider.

Sustainability Manager,
Entertainment Company

The Tradition relationship is incredibly important to us and I’m thrilled with where we are going! Your effort here with our Houston hotel group is another fine example of why Tradition is best in class!

Director, Operational Planning,
Hospitality Owner/Operator

Tradition Energy was unique in that they treated our energy procurement request as a process rather than just a one-time transaction. They took the time to educate us on the market conditions, helped formulate a strategy based on multiple procurement options, and then demonstrated the required patience to work the market until a favorable rate was obtained.

Director of Facilities,
Regional Gaming Operator

With facilities nationwide, it is important to be able to trust those with the expertise to advise us and facilitate cost reduction with such a volatile commodity.

Corporate Purchasing Manager,
National Hospitality Operator

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Apple Hospitality Avoids $20,000 Fee and Reduces Natural Gas Costs

The opportunity

Apple Hospitality REIT sought to manage an account transition while evaluating energy costs at several of its California hotels.

Analysis

The Result:
Avoided Fees & Lower Energy Costs

Avoided Fees

Significantly Lower Rates

Improved Contract Oversight

Client Testimonials

The Scale and Experience Behind Every Recommendation

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