- Highland Group: Extended-stay outpaced the broader hotel industry in May.
- Occupancy increased across all extended-stay segments.
- Room revenues rose 7.9 percent in May, the highest since March 2023.
EXTENDED-STAY HOTELS OUTPEFORMED the broader hotel industry in May as demand recorded its highest year-on-year growth in more than four years, according to The Highland Group. The increase drove gains in occupancy, ADR and RevPAR.
Highland Group's "US Extended-Stay Hotels Bulletin: May 2026" found room supply increased 4.9 percent, while demand growth exceeded the long-term annual average of 5 percent for the fourth consecutive month. It also outpaced the 0.7 percent demand growth reported for comparable hotel classes.
"The four-month trend of extended-stay demand growth above its long-term average is very encouraging as supply increases are expected to stay below trend during the foreseeable future," said Mark Skinner, Highland Group’s partner.
Occupancy increased across all extended-stay segments, widening the gap over comparable hotel classes to 12.2 percentage points, the report said. ADR rose 1.6 percent for the fourth consecutive month, while RevPAR increased 2.8 percent, compared with a 1.8 percent increase for comparable hotel classes.
Room supply growth exceeded 5 percent during the second half of 2025 but remained below that level each month in 2026. Calendar-year supply growth ranged from 2.1 percent to 4 percent over the past three years and averaged 4.5 percent over the last three months, below the long-term annual average.
With fewer extended-stay rooms under construction, 2026 supply growth is expected to remain below the long-term annual average.
Demand, revenue rise
Demand increased year on year in 41 of the last 42 months after adjusting for the extra day in February 2024. May posted the largest monthly demand gain since February 2022.
Room revenues rose 7.9 percent in May from a year earlier, the second-highest monthly increase since March 2023, according to Highland Group. By comparison, STR/CoStar reported overall U.S. hotel room revenues increased 4.7 percent, while comparable hotel classes excluding luxury and upper upscale rose 2.9 percent.
Among traditional hotels, economy room revenues fell 2.4 percent, while midscale and upscale revenues rose 5.1 percent and 4.9 percent, respectively, according to STR/CoStar. All extended-stay segments recorded faster room revenue growth than their corresponding hotel classes.
Extended-stay ADR growth exceeded that of corresponding economy, mid-price and upscale hotel segments. RevPAR growth also outpaced comparable hotel classes, with economy and mid-price extended-stay hotels recording larger gains. STR/CoStar reported economy hotel RevPAR fell 1.8 percent, while midscale and upscale RevPAR rose 3.5 percent and 2.9 percent, respectively.
A June report by Highland Group found that extended-stay hotels in April recorded their largest occupancy increase since January 2023 and their biggest room revenue gain since March 2023. Demand growth outpaced supply growth, lifting occupancy, ADR and RevPAR.
