To say “cash flow is king” is so rote, it’s a cliché. But some large-scale hotel investors believe the cliché has never been more true or vital for the industry than it is right now.

Speaking during the “State of the industry” panel at the recent Hunter Hotel Conference, the importance of cash flow was a recurring theme among panelists.

Mit Shah, senior managing principal and CEO of Noble Investment Group, said the desire for strong and predictable cash flow is what led his company to focus on select-service hotels.

“Since 2008, we’ve been exclusively select service because it’s more predictable,” he said. “The business is just about cash flow.”

While there are always different metrics to consider and concerns about slowing revenue per available room growth or an impending downturn, Shah said his company’s success through the last recession shows the logic behind prioritizing cash flow. And there is no secret behind what makes it work.

“That math is readily available; it’s not proprietary,” he said. “When you think about it, the investment strategy is simple.”

Suril Shah, managing director and head of U.S. hotels for Starwood Capital Group, agreed that a focus on cash flow is the right tact for hotel businesses, which he said is reflected in his company’s investment in things like the InTown Suites extended-stay brand and Yotel. He said there’s huge potential in the extended-stay segment when looked at from a cash flow perspective.

James Merkel, CEO of Rockbridge, said he’s come to see the importance of cash flow more and more over time.

“I spent so much time thinking about replacement costs when I started,” he said. “But I think about it far less now. Now it’s really a function of cash flow and the cash flow potential of an asset. I missed so many opportunities thinking about replacement cost.”

He said the key to this line of thinking is recognizing hotels are a long-term growth business, and companies must remain well capitalized to ride out potential storms.