Skip to content

Search

Latest Stories

Report: Extended-stay revenues in traditional hotels outperform extended-stay hotels

Traditional hotels recorded 74.27 million extended-stay room nights, a 2 million night difference

Report: Extended-stay revenues in traditional hotels outperform extended-stay hotels

EXTENDED-STAY ROOM revenues in traditional hotels outperformed those in extended-stay hotels by 21 percent, indicating potential for further development in the extended-stay sector, according to consulting firm The Highland Group and Kalibri Labs. For the 12 months ending June 2023, guest-paid room revenue for stays of seven consecutive nights or more totaled $8.97 billion in traditional hotels, compared to $7.39 billion in extended-stay hotels.

“Traditional hotels are still accommodating more extended-stay demand than extended-stay hotels despite the latter’s substantial gains in market share over the last 25 years,” said Mark Skinner, partner at The Highland Group.


Accommodated room nights tallied 74.3 million and 72.2 million, respectively. Nationally, extended-stay demand (ESOC) constitutes 53 percent of extended-stay hotels. In traditional hotels, ESOC is 13 percent, yet the room count is tenfold compared to extended-stay establishments, the report said.

“Despite the growth in extended stay during the pandemic, in the current lodging environment we expect continued expansion of this segment for the foreseeable future,” said Mark Kren, director of real estate and investment reporting at Kalibri Labs.

Extended-stay guests, defined as those staying seven nights or longer, contributed to 72.18 million room nights in extended-stay hotels for the 12-month period ending June 2023. Meanwhile, traditional hotels recorded 74.27 million extended-stay room nights, marking a difference of over two million, the report said.

In nine markets covered in this report, traditional hotels cater to higher extended-stay demand than extended-stay hotels. Nationally, extended-stay hotels average a 53 percent demand share (ESOC) from extended-stay guests, while traditional hotels estimate around 13 percent.

Stay duration and discounts

The average length of stay for extended-stay guests in extended-stay hotels and traditional hotels was 25 and 14 nights, respectively. Over the 12 months ending June 2023, extended-stay hotels offered a 22 percent rate discount compared to traditional hotels for guests staying 7 consecutive nights or more.

According to the report, for guests staying 7-29 nights and 30+ nights, the corresponding discounts were 10 percent and 3 percent. Extended-stay guests staying in extended-stay hotels book 17 days in advance, on average, compared to 18 days in traditional hotels.

Market dynamics 

For guests staying 30 nights, the differential remains consistent. However, for stays spanning 7-29 nights, advance bookings at extended-stay hotels average 15 days, in contrast to 20 days at traditional hotels. Reservation costs in extended-stay hotels average 5.7 percent of guest-paid revenues, while in traditional hotels, it's 7.1 percent.

New York recorded 1.34 million more extended-stay room nights accommodated in traditional hotels than in extended-stay hotels for the 12 months ending June 2023. This substantial gap is attributed to the limited supply of extended-stay rooms in New York City.

Virginia Beach leads with extended-stay hotels reporting a remarkable 66 percent share of demand from guests staying seven or more nights. Markets with the highest share often feature a significant portion of economy extended-stay hotels, known for their elevated ESOC.

Extended stay and residential guests

Older economy extended-stay hotels, catering to a significant residential clientele, are prevalent in markets with extended stays over 30 nights. While stay durations in non-extended-stay hotels tend to be shorter, they exceed 80 nights in high-performing markets.

In Miami, guests staying seven to 29 nights at extended-stay hotels enjoy a substantial 36 percent discount compared to traditional hotels for equivalent stays. These discounts are based on guest-paid ADR in both accommodation types.

Cleveland and Chicago lead in rate discounts for guests with stays over 30 nights, influenced by factors specific to their extended-stay markets.

Booking patterns

Booking lead times vary widely, ranging from eight to 47 days for guests staying seven or more nights. In New York, high overall market occupancy and limited extended-stay room availability contribute to lead times 75 percent longer than the next highest average in Anaheim.

In Anaheim, robust summer-related leisure demand extends the average booking lead time, offering insights into the influence of seasonality on booking patterns.

Booking costs, inversely tied to length of stay, are lower at extended-stay properties compared to traditional hotels. Longer-term guests tend to book directly with the hotel, reducing reservation expenses.

Booking costs at extended-stay hotels average 5.1 percent of guest-paid revenue for stays of seven to 29 nights, with variations influenced by market-specific channel mix. Major markets, relying heavily on costly channels like OTAs and FIT Wholesale, exhibit higher booking costs relative to revenues.

Costs and ADR

The percentage differential in booking costs per actualized room night between the highest and lowest markets far outweighs the differences in ADR for equivalent lengths of stay.

In September, extended-stay hotels saw modest growth in July, aligning with the seasonal trend favoring the broader hotel industry over extended-stay establishments, according to The Highland Group. Total hotels experienced a marginal dip in occupancy and a slightly greater rise in ADR compared to all extended-stay hotels in July 2022.

More for you

Peachtree Funds Rio Las Vegas Renovations | $176M CPACE Loan
Photo credit: Hyatt Hotels Corp.

Peachtree originates retroactive CPACE loan for Rio Vegas

Summary:

  • Peachtree Group originated a $176.5 million retroactive CPACE loan for a Las Vegas property.
  • The deal closed in under 60 days and ranks among the largest CPACE financings in the U.S.
  • The company promotes retroactive CPACE funding for commercial real estate development.

PEACHTREE GROUP ORIGINATED a $176.5 million retroactive Commercial Property Assessed Clean Energy loan for Dreamscape Cos.’s Rio Hotel & Casino in Las Vegas. The deal, completed in under 60 days, is its largest credit transaction and one of the largest CPACE financings in the U.S.

Keep ReadingShow less
Global hotel construction pipeline reaches record 15,871 projects in Q2 2025, with U.S. and Dallas leading growth
Photo Credit: iStock

Report: Global pipeline hits 15,871 projects

Summary:

  • Global pipeline hit a record 15,871 projects with 2.4 million rooms in Q2.
  • The U.S. leads with 6,280 projects; Dallas tops cities with 199.
  • Nearly 2,900 hotels are expected to open worldwide by the end of 2025.

THE GLOBAL HOTEL pipeline reached 15,871 projects, up 3 percent year-over-year, and 2,436,225 rooms, up 2 percent, according to Lodging Econometrics. Most were upper midscale and upscale, LE reported.

Keep ReadingShow less
HAMA Launches 20th Student Case Competition in USA
Photo Credit: iStock

HAMA launches 20th student case competition

Summary:

  • HAMA is accepting submissions for its 20th annual student case competition.
  • The cases reflect a scenario HAMA members faced as owner representatives.
  • Teams must submit a financial analysis, solution and executive summary.

THE HOSPITALITY ASSET Managers Association is accepting submissions for the 20th Annual HAMA Student Case Competition, in which more than 60 students analyze a management company change scenario and provide recommendations. HAMA, HotStats and Lodging Analytics Research & Consulting are providing the case, based on a scenario HAMA members faced as owner representatives.

Keep ReadingShow less
Stonebridge hotel management expansion
Photo credit: Stonebridge Cos.

Stonebridge adds Statler Dallas to managed portfolio

Summary:

  • Stonebridge Cos. added the Statler Dallas, Curio Collection by Hilton, to its managed portfolio.
  • The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group.
  • The property is near Main Street Garden Park, the Arts District and the Dallas World Aquarium.

STONEBRIDGE COS. HAS contracted to manage the Statler Dallas, Curio Collection by Hilton in Dallas to its managed portfolio. The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group, led by Mehrdad Moayedi.

Keep ReadingShow less
Peachtree EB-5 approval
Photo credit: Peachtree Group

Peachtree’s FL development gets EB-5 approval

Summary:

  • Peachtree secured EB-5 approval for a Florida multifamily development project.
  • The 240-unit community in Manatee County is backed by $47 million in construction financing.
  • It is Peachtree’s fourth EB-5 project approval since launching the program in 2023.

PEACHTREE GROUP RECENTLY secured EB-5 approval from U.S. Citizenship and Immigration Services for Madison Bradenton, a 240-unit multifamily development in Bradenton, Florida. It also raised $47 million in construction financing with a four-year term for the project on a 10.7-acre site in Manatee County.

Keep ReadingShow less