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

Hotel exterior of Motel 6 Las Vegas under G6 Hospitality and Galaxy Hotels partnership
Photo credit: G6 Hospitality

G6, Galaxy aim to grow Motel 6, Studio 6

Summary:

  • G6 Hospitality and Galaxy Hotels Group are expanding Motel 6 and Studio 6 in the U.S.
  • Galaxy said G6 brands outperform others in guest satisfaction and value.
  • One Galaxy hotel generates $8–10M annually; the full G6 portfolio is expected to reach $50M.

G6 HOSPITALITY AND Galaxy Hotels Group are now working to expand the Motel 6 and Studio 6 footprint in the U.S. About 10 Galaxy-managed hotels, totaling more than 1,300 rooms, will operate under the G6 brands, with more to follow.

Keep ReadingShow less
Choice Hotels campaigns

Choice launches campaigns for extended-stay brands

Summary:

  • Choice launched two campaigns to boost bookings across its four extended-stay brands.
  • Based on guest feedback, the campaigns focus on efficiency, cleanliness, value and flexibility.
  • They will run through 2026 across social media, Connected TV, digital display and online video.

CHOICE HOTELS INTERNATIONAL launched two marketing campaigns to increase brand awareness and bookings across its four extended-stay brands. The "Stay in Your Rhythm" campaign promotes all four brands by showing how guests can maintain daily routines, while "The WoodSpring Way" highlights the service WoodSpring Suites staff provide.

Keep ReadingShow less
Fed interest rate July
Photo credit: Chip Somodevilla/Getty Images

Fed holds rates steady despite Trump pressure

Summary:

  • The Federal Reserve held interest rates steady and gave no signal of a September cut.
  • Developers and brokers are calling for lower borrowing costs to unlock supply and revive stalled deals.
  • The Fed’s decision followed surprise news that the U.S. economy grew 3 percent in Q2.

THE FEDERAL RESERVE held its key interest rate steady and gave no indication of a cut in September, despite growing pressure from President Trump and his Fed appointees, USA Today reported. The July 30 decision keeps the Fed’s benchmark rate at 4.25 percent to 4.5 percent for a fifth straight meeting.

Keep ReadingShow less
BWH Hotels expands with AI-driven strategy and outdoor lodging focus

BWH sticks to growth plan despite headwinds

Summary:

  • BWH Hotels is staying the course on long-term growth, investing in AI and developer support.
  • A new insurance program has saved some BWH hoteliers $50,000 to $60,000 annually.
  • It aims to reach 5,150 hotels in five years, with 300 deals signed last year and 200-plus in the pipeline.

BWH HOTELS IS maintaining its long-term growth strategy despite market uncertainties, with President and CEO Larry Cuculic citing momentum across core markets. The company is investing in AI, supporting developers and focusing on long-term goals.

Keep ReadingShow less
Amex GBT & Chooose Launch Hotel Emissions Tracker

Amex GBT, Chooose to launch hotel emissions tracker

Summary:

  • Amex GBT and Chooose are launching a hotel emissions tracking tool to calculate users’ Hotel Carbon Measurement Initiative reporting requirements.
  • Emissions data in Amex GBT’s Global Trip Record and Data Lake ensures consistency across travel programs.
  • In January, Finland-based Bob W found hotel carbon emissions are five times higher than HCMI estimates.

SOFTWARE FIRMS AMERICAN Express Global Business Travel and Chooose are launching a hotel emissions tracking tool in the third quarter of 2025. The new tool, integrated into Amex GBT’s platforms, will provide standardized hotel emissions data to calculate users’ Hotel Carbon Measurement Initiative reporting requirements.

Keep ReadingShow less