THIS YEAR IS set to go down as a good one for the extended-stay hotel business in America.
The Highland Group reports the sector performed well in the third quarter of 2017, even better than the second quarter, which saw near-record year-to-date occupancy.
“Despite a net increase of more than 34,000 rooms over the last year, the strongest demand growth seen in seven years kept extended-stay year-to-date occupancy above 77 percent for the fourth consecutive year,” said the Highland Group in its third quarter report released Nov. 13.
Hurricanes in August and September boosted occupancy, but other factors in third-quarter performance included supply growth in higher-segmented properties and accelerated ADR.
“Third quarter RevPAR growth was the highest in almost two years and the fifth consecutive quarter of RevPAR gains.
“The full year 2017 will be very good for extended-stay hotels and provide solid fundamentals to start absorbing the large number of new rooms opening in 2018,” said the report.
Highlights for the third quarter 2017 are:
- Room supply was up 8.4 percent over the same period in 2016. More than 40,900 rooms nights were available in 3Q17.
- Room demand was up 9.1 percent. More than 33,000 rooms nights were sold.
- Occupancy at 77.5 percent, was a record high. It is higher than the average occupancy recorded by STR for the entire U.S. hotel industry in 3Q17.
- Room revenues were $3.4 billion, up 13.3 percent.
- ADR growth accelerated by 3.9 percent with the overall rate across all segments at $103.46.
- Overall RevPAR grew by 4.6 percent to $83.46.