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Report: Extended-stay hotels post record gains in October

The segment saw a 6.6 percent increase in room revenue in October

Report: Extended-stay hotels post record gains in October

OCTOBER WAS A strong month for the extended-stay segment, though the hotels lagged behind the overall hotel industry in occupancy, ADR and RevPAR gains, according to The Highland Group. Demand growth was the highest since March 2022, occupancy saw its largest increase in 21 months, RevPAR grew the most since June 2023, and room revenue growth was the strongest in 18 months.

“October was a very good month for extended-stay hotels with four record-high performance metrics compared to the last 30 months,” said Mark Skinner, partner at The Highland Group.


Extended-stay room supply grew 3.1 percent in October, exceeding the average monthly increase over the past two years, The Highland Group reported. This rise partly reflects the addition of Water Walk by Wyndham, a mid-price extended-stay brand included in the database since May 2024 after affiliating with Wyndham.

October marked 37 consecutive months of supply growth at 4 percent or less, with annual supply changes below 2 percent for two years—both well below the long-term average, the report noted.

The 12.8 percent rise in economy extended-stay supply, along with modest growth in mid-price and upscale segments, was largely driven by conversions, according to The Highland Group’s U.S. Extended-Stay Hotels Bulletin: October 2024. New construction in the economy segment accounted for only about 3 percent of rooms open compared to a year ago. Supply changes were also influenced by rebranding that shifted rooms between segments, de-flagging of hotels no longer meeting brand standards, and hotel sales to multi-family apartment companies and municipalities.

Conversion activity in October increased from September but is expected to decline in the near term, the report said. Total extended-stay supply growth for 2024 compared to 2023 will remain well below the long-term average.

Extended-stay hotels reported a 6.6 percent increase in room revenue in October, the seventh consecutive monthly gain and the largest since May 2023. This growth outpaced the 5.1 percent increase reported by STR/CoStar for the overall hotel industry.

Extended-stay demand rose 5.1 percent in October, the largest monthly gain in two and a half years, excluding February's leap year impact, the report said. Demand increased in 22 of the past 23 months. By comparison, STR/CoStar reported a 3.2 percent rise in overall hotel demand for October.

Extended-stay hotel occupancy rose 1.9 percent in October, the largest increase since January 2023 but smaller than the 2.2 percent reported by STR/CoStar for all hotels. Extended-stay occupancy remained 11.1 percentage points higher than the overall hotel industry, consistent with the historical long-term average premium.

After declines in February and March—the first in three years—extended-stay hotel ADR rose for the seventh consecutive month in October, marking the second-largest increase since November 2023. However, the gain was smaller than the 1.8 percent reported by STR/CoStar for the overall hotel industry. Among comparable hotel classes, only upscale extended-stay ADR underperformed in October, with a minimal differential of 0.2 percent.

Extended-stay hotels' RevPAR increased 3.3 percent in October, the strongest gain in 16 months but below the 4.1 percent increase reported for the total hotel industry by STR/CoStar.

The Highland Group reported September marked 36 straight months of supply growth at 4 percent or less, with annual supply changes below 2 percent for two years—both below the long-term average.

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