- Extended-stay outpaced the hotel industry in Q4, The Highland Group reported.
- Occupancy reached 71.3 percent, 14 points above the industry.
- Room revenue rose 2 percent in the fourth quarter year over year.
EXTENDED-STAY HOTELS OUTPACED the broader hotel industry in the fourth quarter despite a downturn that began in April, according to The Highland Group. Occupancy was 71.3 percent, 14 percentage points above the overall hotel industry, excluding upper upscale and luxury segments with limited extended-stay supply.
Highland’s “2025 Fourth Quarter U.S. Extended-Stay Hotels Report” found that extended-stay hotels maintained an occupancy premium over the broader hotel industry, averaging 13.3 percentage points in the fourth quarter of 2018 and 2019. The premium peaked at 18.3 points in the fourth quarter of 2020 and measured 14 points in 2025 as overall occupancy declined.
“The moderation and distribution of extended-stay hotel supply growth, as well as the performance of the overall hotel industry, will be key factors in the timing of a return to positive change in total extended-stay hotel RevPAR,” said Mark Skinner, partner at The Highland Group.
However, ADR fell from 103 percent in 2020 to 96.3 percent in 2025 due to supply growth at lower price points, the report said. RevPAR peaked at 145 percent in the fourth quarter of 2020, declined to 119.1 percent in the fourth quarter of 2024 and increased in the fourth quarter of 2025.
Revenue, demand and supply
Extended-stay hotels reported a 2 percent increase in room revenue in the fourth quarter of 2025 compared to the fourth quarter of 2024, while the total hotel industry declined 2 percent, the report said. Demand grew 3.2 percent year over year, down from 4.6 percent in the fourth quarter of 2024.
Room supply increased 5.1 percent in the fourth quarter of 2025, the highest quarterly gain since 2019 excluding pandemic distortions, the report said. Total rooms reached 630,128, a net gain of 30,629 over 12 months, matching the 2016 to 2019 annual average.
Despite the supply increase, extended-stay hotels recorded their lowest fourth-quarter occupancy since 2013, excluding 2020. The segment maintained an occupancy premium over the overall hotel industry.
Segment performance
Within the economy segment, extended-stay hotels declined less than standard economy hotels. RevPAR began falling in April and declined further in the fourth quarter. The segment lost less RevPAR than all economy-class hotels.
Mid-price extended-stay hotels were the only segment to post ADR growth in the fourth quarter of 2025, driven by supply expansion at higher price points. RevPAR relative to all mid-price hotels rose from 97 percent in the fourth quarter of 2019 to 111 percent in the fourth quarter of 2025.
Upscale extended-stay hotels recovered more slowly due to concentration in urban sub-markets. Since 2019, RevPAR has declined relative to all upscale hotels. Losses have been smaller during the current slowdown.
As 2025 ended, RevPAR decline showed signs of stabilizing, the report said. Supply growth and overall hotel performance will determine when extended-stay RevPAR returns to positive growth. The mix of economy, mid-price and upscale properties supports performance during downturns.
The Highland Group’s “US Extended-Stay Hotels Bulletin: December 2025” showed extended-stay hotels stabilized in December, with RevPAR down 2.1 percent, the smallest monthly decline since April. Occupancy was 14.6 percentage points above the overall hotel industry.
