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Report: Extended-stay continued improvement in December

Room supply in the segment also grew 4.8 percent while national average declined

Report: Extended-stay continued improvement in December
Ed Brock
By Ed BrockFeb 01, 2021
Ed Brock
Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently assistant editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
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DECEMBER WAS THE ninth consecutive month for U.S. extended-stay hotels to outperform other segments during the COVID-19 pandemic, according to a report from hotel investment advisors The Highland Group. The segment’s improvement in performance is still measured in RevPAR declines that are less than other types of hotels.

Extended-stay hotels saw a 26.1 percent decline in RevPAR during the month versus the same time in 2019, according to The Highland Group’s latest report. That is half the decline the segment saw in April, the first full month under COVID-19 restrictions. Occupancy for the segment during the month was 57.4 percent, 20 percent higher than the overall industry. It was the seventh consecutive month ADR declined less than the month before.

“Following six consecutive months of demand growth, economy extended-stay hotels become the first segment of the hotel industry to report positive monthly change in ADR in 2020” says Mark Skinner, Partner at The Highland Group.

During December, extended-stay room supply increased 4.8 percent compared to the 1.8 percent decline seen in total room supply. Most hotels in the segment that closed because of the pandemic have reopened and its room supply is near pre-pandemic levels, according to the report. Earlier this week, Lodging Econometrics reported that 24 percent of hotels under construction in the U.S. are extended-stay brands.

“The 26.1 percent decline in room revenue in December 2020 was an improvement on November’s contraction and about half of the corresponding fall in overall hotel industry revenues as reported by STR. Economy extended-stay hotels reported their highest monthly gain in revenues for the year in December 2020. It was the economy segment’s third monthly increase in revenues compared to 2019 in the last four months,” the report said. “Extended-stay hotel demand declined 9.9 percent in December 2020 compared to one year ago. The rate of decline was a slight uptick on November but less than one third of the contraction STR reported for the overall hotel industry. The economy extended-stay segment reported its sixth consecutive monthly increase in demand compared to 2019.”

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