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Report: Extended-stay hotels post strong November performance

Economy extended-stay hotels saw their best RevPAR growth since August 2022

Report: Extended-stay hotels post strong November performance

NOVEMBER WAS ONE of the best months of 2024 for extended-stay hotels, being the sixth consecutive month of 3 percent or higher supply growth, according to The Highland Group. Demand grew faster than supply in all but one month, leading to an emerging trend of increasing occupancy. With ADR also rising, November saw some of the strongest room revenue and RevPAR increases in over a year.

November’s performance for economy extended-stay hotels was strong, with monthly RevPAR growth the highest since August 2022, the report said.


“November was another very good month for extended-stay hotels, with demand growth exceeding the accelerating increase in supply,” said Mark Skinner, The Highland Group’s partner.

Increase in room inventory

Extended-stay room supply rose 3.4 percent in November, a full point above the two-year average monthly growth, according to The Highland Group's US Extended-Stay Hotels Bulletin: November 2024. This increase is partly due to the addition of Water Walk by Wyndham, a mid-price extended-stay brand included in the database after affiliating with Wyndham in May 2024.

November marked the 38th consecutive month of 4 percent or less supply growth, with the annual supply change remaining below 2 percent for two years—both well below the long-term average, the study found. The 12.4 percent increase in economy extended-stay supply, along with smaller gains in mid-price and upscale segments, is mainly due to conversions. New construction in the economy segment is estimated at about 3 percent of rooms compared to a year ago.

Supply change comparisons have been impacted by rebranding, de-flagging of hotels no longer meeting brand standards, and the sale of some hotels to multi-family apartment companies and municipalities.

Conversion activity in November slightly declined compared to October and is expected to decrease further in the near term. The total increase in extended-stay supply for 2024, compared to 2023, will remain well below the long-term average.

Revenue and key metrics

Extended-stay hotels saw a 6.2 percent room revenue increase in November, marking the eighth consecutive monthly gain and the second-largest since May 2023. This growth outpaced the 3.7 percent increase reported for the overall hotel industry by STR/CoStar. Economy extended-stay hotels recorded their strongest revenue gain since March 2022.

Total extended-stay demand grew 4.9 percent in November, one of the largest monthly increases in 2024, marking a positive change in 23 of the last 24 months. In comparison, STR/CoStar reported a 2.8 percent increase in overall hotel demand for November.

Extended-stay hotel occupancy increased 1.5 percent in November, marking growth in seven of the last eight months. However, this was slightly below the 1.7 percent increase reported for all hotels by STR/CoStar. Extended-stay occupancy was 13.9 percentage points higher than the overall hotel industry, consistent with the historical occupancy premium.

After declines in February and March—the first in three years—extended-stay hotel ADR increased for the eighth consecutive month in November, slightly outpacing the 0.9 percent gain reported for the overall hotel industry by STR/CoStar. All extended-stay hotel segments posted faster ADR growth than their corresponding hotel classes in November.

Extended-stay hotels saw a 2.7 percent RevPAR increase in November, the second-largest in the last 17 months, matching the total hotel industry RevPAR gain estimated by STR/CoStar. Economy extended-stay hotels reported their highest monthly RevPAR increase in over two years.

The Highland Group reported that extended-stay hotel demand growth in October reached its highest level since March 2022, with the largest occupancy increase in 21 months, the strongest RevPAR growth since June 2023, and the highest room revenue growth in 18 months.

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