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Report: Extended-stay supply grows 3.1 percent in July, tops two-year average

July saw the fourth consecutive rise in extended-stay occupancy after a year of declines

Report: Extended-stay supply grows 3.1 percent in July, tops two-year average

EXTENDED-STAY ROOM SUPPLY grew 3.1 percent in July, outpacing the average monthly increase over the past two years, according to The Highland Group. The rise is partly due to WaterWalk by Wyndham, a mid-priced extended-stay brand added to the database in May 2024 after affiliating with Wyndham.

July marked 34 consecutive months of supply growth at 4 percent or less, with annual supply changes under 2 percent for two years—both well below the long-term average, the report said.


“July was an exceptionally good month for extended-stay hotels which outperformed the overall industry and the economy segment reported a monthly RevPar gain for the first time in more than one year,” said Mark Skinner, The Highland Group’s partner.

The U.S. Extended-Stay Hotels Bulletin for July 2024 reported a 13.9 percent rise in economy extended-stay supply, with smaller gains in mid-price and upscale segments, largely due to conversions. New construction in the economy segment accounts for about 3 percent of rooms open compared to last year.

Supply changes have been affected by room re-branding between segments, hotel de-flagging due to brand standard issues, and sales to multi-family apartment companies and municipalities, the Highland Group said. This is expected to taper off in the second half of 2024, with the full-year increase in extended-stay supply compared to 2023 remaining well below the long-term average.

Extended-stay hotels saw a 4 percent revenue increase in July, marking the fourth consecutive month of 4 percent or more growth, significantly outpacing the 0.9 percent gain reported by STR/CoStar for the overall hotel industry, the report said.

Meanwhile, total extended-stay demand rose 3.2 percent in July, marking positive demand growth in 19 of the last 20 months. This increase far exceeded the 0.5 percent gain reported by STR/CoStar for the overall hotel industry.

Fourth month of occupancy growth

July marked the fourth consecutive monthly increase in extended-stay hotel occupancy, following over a year of declines. Though the gain was fractional, it outperformed the 0.5 percent drop in the overall hotel industry, as reported by STR/CoStar.

Extended-stay occupancy in July was 9.9 percentage points higher than the total hotel industry, consistent with the historical long-term summer occupancy premium, the report said.

After declines in February and March—the first in three years—extended-stay ADR rose for the fourth consecutive month in July. The economy segment also saw ADR increases for the second straight month, following five months of declines. Among hotel classes, only upscale extended-stay ADR underperformed in July, by just 0.1 percent, compared to corresponding classes of all hotels.

Extended-stay hotels reversed a four-month declining RevPAR trend in April, with gains continuing through July, though the growth rate has slowed, The Highland Group said. Economy extended-stay hotels posted a 0.9 percent RevPAR increase in July, the first rise in over a year.

July’s gain stands out compared to the 3 percent decline reported by STR/CoStar for all economy-class hotels, the report said. Mid-price extended-stay hotels led the sector’s RevPAR growth for the fourth consecutive month in July.

In August, The Highland Group reported a 3.4 percent increase in extended-stay room revenue for the first half of 2024, with a 5.1 percent rise in the second quarter. Occupancy was down 0.2 percent in the first half but up 1 percent in the second quarter.

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