THE EXTENDED-STAY HOTEL segment has been increasing its market share for the past two decades, accompanied by rapid supply growth. Yet, traditional hotels manage to steal a march on them when it comes to long-term bookings, shows a new report by the Highland Group and Kalibri Labs.
Traditional or non-extended-stay hotels in the country accommodated 71.15 million room nights from guests staying seven nights or longer in the year ending June 2019, whereas the corresponding figure for the extended-stay hotels were 50.23 million, according to “The 50 Largest Markets: ALOS, ESOC and More Report 2019.”
That is 42 percent more for the traditional hotels over their competitors in the extended-stay hotel segment.
The difference in guest paid room revenue follows the trend, and much more favorably to the traditional hotels. Extended-stay guests reportedly spent $8.2 billion at traditional hotels compared to the $4.6 billion at extended-stay hotels, an increase of 77 percent, during the period.
“For the first time we have reliable empirical data on the size of the extended-stay market in hotels and it is far larger than we expected,” said Mark Skinner, partner at the Highland Group.
The report also looks at the key metrics of extended-stay demand share and average length of stay, with extended-stay hotels performing better in both measures.
Extended-stay room nights, on an average, accounted for 48 percent of the total room nights in extended-stay hotels, while the corresponding figure for traditional hotels is just 12 percent, the report found.
The average length of stay for extended-stay guests in extended-stay hotels is almost double to the traditional hotels, with 23 nights in the former and 12 nights in the latter.
North America is world’s largest region for extended-stay lodging, with over 550,000 extended-stay hotel rooms and corporate housing units. The sector reached an all-time high of $12.4 billion in 2017, according to another Highland Group report.