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Report: Extended-stay hotels comparatively strong in November

Following a trend seen throughout the current downturn, the segment has lost less occupancy and revenue than others

EXTENDED-STAY HOTELS in the U.S. in November continued the trend of outperforming other segments during the current downturn, according to a report from hotel investment advisors The Highland Group. The report also found that traditional hotels were also benefitting from longer term stays.

During the month, extended-stay hotels saw a 23.7 percent decline in room revenues compared to 53.5 percent for the national average. Occupancy and ADR also were substantially higher than other segments, leading to a 23 percent occupancy premium over all hotels.


“For extended-stay hotels November 2020 was a resumption of the trend in reporting lower RevPar losses compared to the previous month and the segment’s occupancy premium reached a new record high” said Mark Skinner, partner at The Highland Group.

The benefit of extended-stay business extended beyond rates. Economy, mid-price and upscale extended-stay hotels all have lost less RevPAR losses than traditional hotels with comparable rates over the past few months, though they have seen losses.

“However, traditional hotels have also benefitted from a significant increase in longer-term guests,” the report said. “Average length of stay from guests staying seven consecutive nights or longer in traditional hotels increased from 12.8 to 15 nights for the year-to-date through September 2020 compared to the same period in 2019. The corresponding change in extended-stay hotels was a gain from 22.8 to 24.7 nights.”

While overall demand for stays of seven consecutive nights or longer was down 4.5 percent through September, room nights from guests staying 30 or more consecutive nights rose 15.1 percent over the same period, according to The Highland Group report. Traditional hotels captured more than 4 million room nights of the 5.78 million room night increase in demand from the longest-term guests.

Of the 50 largest markets, 13 reported declines in demand from longest-term guests in extended-stay hotels.

“Only eight of the 50 markets saw a corresponding demand decrease in traditional hotels,” the report said. “In both extended-stay and traditional hotels, more than half the largest markets reported at least double-digit demand growth for stays of 30 consecutive nights or longer.”

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