- Reports: Extended-stay posts record Q2 results.
- Occupancy rose monthly February through June.
- RevPAR saw highest gain in 13 quarters.
EXTENDED-STAY HOTELS RECORDED their largest quarterly gains in demand, ADR, RevPAR and room revenue in years in the second quarter, according to The Highland Group. Meanwhile, rooms under construction fell 30 percent year-over-year, indicating slower supply growth ahead.
Highland Group’s “First Half Year 2026” report found room revenue rose 9 percent in the second quarter, the largest quarterly gain in more than three years. RevPAR increased 4.2 percent, its highest gain in 13 quarters, while demand rose 6 percent, the largest quarterly increase since the first quarter of 2022. ADR grew 2.8 percent, its largest gain since the third quarter of 2023.
“Strong demand growth coupled with a substantial decline in new rooms under construction are very good indicators that extended-stay hotel RevPar will continue to grow during the foreseeable future,” said Mark Skinner, partner at The Highland Group.
Extended-stay hotels outperformed comparable hotel classes on most metrics in the first half of 2026. RevPAR declined for the 10th consecutive month in January before turning positive in February and accelerating through June.
Occupancy, RevPAR outperform
Occupancy increased each month from February through June, with growth higher in the second quarter than the first, Highland Group reported. Occupancy reached 77.3 percent in the second quarter, 11.6 percentage points above the average for comparable hotel classes.
ADR remained at 96 to 96.5 percent of the comparable-class average over the past three years. The ratio rose in 2026 as ADR growth accelerated, with June benefiting from the FIFA World Cup.
RevPAR was 113.5 percent of the comparable-class average in the second quarter, up from 112.7 percent a year earlier. The ratio remained between 112 and 114 percent over the previous three years after reaching 137 percent in the second quarter of 2020.
Economy extended-stay hotels outperformed all economy hotels on RevPAR. Mid-price extended-stay hotels also gained, with their RevPAR ratio rising from 92 percent in the second quarter of 2019 to 107 percent in the second quarter of 2026.
Supply growth slows
High interest rates, construction costs and tariff uncertainty have made hotel financing more difficult. Extended-stay hotel supply reached nearly 645,000 rooms at mid-year 2026, Highland Group said. Rooms open increased 4.6 percent year on year, the largest annual gain in six years, while monthly supply growth remained below 5 percent throughout 2026.
There were 27,553 extended-stay rooms under construction at the end of the second quarter, down 30 percent year on year and to just over half the number reported two years earlier.
Rooms under construction accounted for 4.3 percent of existing supply at mid-year, while national supply growth is expected to reach about 4.5 percent in 2026, below the four-year pre-pandemic and long-term averages.
Highland Group recently reported that extended-stay hotel demand rose 5.8 percent in June, the highest June growth since 2021, when demand was recovering from the pandemic. The FIFA World Cup lifted extended-stay ADR, RevPAR and room revenue growth to their highest monthly levels in more than three years.
