- Highland Group: Extended-stay hotels sustain March growth.
- Occupancy rose 1.6 percent for a second straight month.
- Room revenue rose 7.6 percent from a year earlier.
EXTENDED-STAY HOTELS BUILT on their start to 2026 with strong March performance, according to The Highland Group. Supply growth slowed as demand posted its largest monthly gain in four years, driving occupancy growth for a second straight month.
The “US Extended-Stay Hotels Bulletin: March 2026” found that
after a fractional gain in February, extended-stay ADR posted its largest increase in more than a year. March’s performance coincided with a rebound in the hotel industry.
Additionally, RevPAR growth for all upscale hotels exceeded that of upscale extended-stay hotels, while economy and midprice extended-stay hotels outperformed their counterparts across all hotels.
“Decelerating supply growth and accelerating demand bode well for extended-stay hotel RevPAR growth during the foreseeable future,” said Mark Skinner, partner at Highland Group.
March extended a five-month trend of accelerating demand growth and slowing supply growth that, if sustained, should drive further RevPAR gains, the report said. Extended-stay room nights available also rose 4.3 percent in March from last year.
Key metrics
Extended-stay hotel occupancy rose 1.6 percent in March, the second consecutive monthly increase since December 2024, Highland Group said. Occupancy was 13.2 percentage points above comparable hotel classes. Economy extended-stay hotel occupancy rose for a third straight month and recorded its largest increase of the year.
Extended-stay hotel ADR rose 1.6 percent in March, the first monthly increase since March 2025. Economy was the only extended-stay segment to report an ADR decline, but it outperformed the 2.2 percent drop for all economy hotels reported by STR/CoStar Group. Midprice extended-stay hotel ADR rose 3 percent versus 1.4 percent for all midprice hotels. ADR for all upscale hotels rose 2.3 percent compared with 1.6 percent for upscale extended-stay hotels, the report said, citing STR/CoStar Group data.
Extended-stay hotel RevPAR rose 3.2 percent in March, the second consecutive monthly increase since March 2025 and the largest since October 2024. STR/CoStar Group reported March RevPAR changes of negative 4.1 percent for economy hotels, positive 4.3 percent for midprice hotels and positive 4.6 percent for upscale hotels.
Supply growth increased during the second half of 2025 but has slowed this year, the report said. Annual supply growth ranged from 2.1 percent to 4.0 percent over the past three years but averaged 4.6 percent over the past three months, in line with the long-term annual average. With fewer extended-stay rooms under construction, 2026 supply growth is expected to fall below the long-term annual average.
Room revenues
Extended-stay hotel room revenue rose 7.6 percent in March from a year earlier, the largest monthly increase since May 2023. STR/CoStar Group reported overall hotel industry room revenue growth of 7.4 percent from March 2025. Excluding luxury and upper-upscale segments, where extended-stay supply is limited, hotel room revenue rose 3.8 percent over the same period.
March room revenue declined 4.4 percent for economy hotels, rose 5.9 percent for midscale hotels and increased 6.5 percent for upscale hotels compared with March 2025, the report said, citing STR/CoStar Group.
Extended-stay hotel demand growth exceeded the 5 percent long-term average for a second straight month in March and reached its highest level since March 2022. STR/CoStar Group reported comparable hotel demand growth of 1.5 percent.
All three extended-stay hotel segments matched or exceeded demand growth in corresponding hotel classes in March, the report said. Adjusting for the extra day in February 2024, extended-stay hotel demand increased in 39 of the past 40 months.
In February, Highland Group reported that extended-stay hotel demand reached a nearly four-year high. Demand growth hit its highest level in nearly four years, pushing RevPAR and occupancy into positive territory for the first time in 11 and 14 months, respectively.
