Skip to content

Search

Latest Stories

Report: January weather impacts extended-stay hotel performance

The economy segment lifted total extended-stay revenue above January 2023 levels

Report: January weather impacts extended-stay hotel performance

MOST PERFORMANCE METRICS for extended-stay hotels in January trailed behind the overall hotel industry compared to the same month last year, according to The Highland Group.

Weather likely influenced this, particularly due to the construction industry's significant contribution to extended-stay hotel demand, especially at lower price points.


According to the National Centers for Environmental Information, January witnessed geographically widespread record low temperatures in 2,500 counties. Additionally, there was large-scale flooding in Texas and Louisiana, marking it as the tenth wettest January on record.

Extended-stay hotels have maintained strong annual demand over the past 25 years, excluding 2020, with rare monthly contractions during this period, the report said.

Room supply downturn

ENEWS 03 13 24 Highland extended stay Jan report 1

The 1.6 percent net increase in extended-stay room supply in January represents a decrease compared to the two-year average, the report said. January marked the 28th consecutive month of 4 percent or less supply growth. Over the past two years, the change in supply has remained below 2 percent, with both metrics significantly lower than the long-term average.

The 13.3 percent increase in economy extended-stay supply and decline in mid-price segment rooms are mainly due to conversions, with new construction in the economy segment estimated at about 3 percent of rooms open compared to one year ago.

Supply change comparisons have been influenced by re-branding, room movements between segments in our database, de-flagging of hotels failing to meet brand standards, and the sale of some hotels to multi-family apartment companies and municipalities.

This trend is expected to persist in the first half of 2024, as several older extended-stay hotels are still on the market, the report said. However, the overall year-on-year increase in total extended-stay supply compared to 2023 will remain notably below the long-term average."

Decrease in revenue

ENEWS 03 13 24 Highland extended stay Jan report 2

Mid-price extended-stay hotels saw their second consecutive monthly revenue decline in three years, The Highland Group said. However, the economy segment's gains lifted total extended-stay revenue slightly above its January 2023 level. In comparison, STR/CoStar reported a 1.8 percent increase in revenue for all hotels during the same period.

The re-branding related supply contraction in the mid-price segment had the most significant negative impact on segment demand. Despite the economy segment's gains, total extended-stay demand saw its first monthly decline in over a year, slightly exceeding the 0.7 percent decrease estimated by STR/CoStar for the overall hotel industry.

The report noted that in January, economy extended-stay hotels experienced their first monthly drop in ADR since November 2020. Despite this, gains in the mid-price and upscale segments lifted total extended-stay hotel ADR by 1 percent compared to January 2023. However, this increase in total extended-stay ADR fell short of the 2.6 percent growth reported by STR/CoStar for the overall hotel industry.

Only the extended-stay upscale segment observed a rise in RevPAR in January, the report said. On the other hand, the mid-price segment saw its first monthly decline in RevPAR in almost three years. Although January marked the economy segment's tenth consecutive monthly decline in RevPAR, it was less severe than the 6.1 percent contraction estimated by STR/CoStar for all economy class hotels.

The Highland Group recently said that extended-stay hotel occupancy decreased across 59 MSAs in 2023 compared to 2019, attributed to substantial ADR growth over the past three years.

More for you

Trump’s Proposed Visa Fee Threatens Seasonal Hospitality Workforce

Report: Trump visa fee sparks summer staffing fears

Summary:

  • Trump’s proposed $250 Visa Integrity Fee faces pushback from groups relying on seasonal J-1 workers from Latin America and Asia.
  • J-1 visa holders often work as housekeepers, amusement park staff, and lifeguards from pre-season through Labor Day; more than 300,000 use the visa annually.
  • DHS and the State Department have not clarified how the fee will be implemented or who qualifies for a refund.

A $250 VISA Integrity Fee in President Donald Trump’s Big Beautiful Bill is drawing criticism from groups that rely on seasonal workers from Latin America and Asia on J-1 and other visas, Newsweek reported. The organizations warn the cost, though sometimes refundable, could reduce the summer workforce that supports U.S. beach towns and resorts.

Keep ReadingShow less
U.S. Hotel Construction Hits 20-Quarter Low in June

CoStar: Hotel construction drops in June

Summary:

  • U.S. hotel rooms under construction fell year over year for the sixth straight month in June, hitting a 20-quarter low, CoStar reported.
  • About 138,922 rooms were under construction, down 11.9 percent from June 2024; the luxury segment had 6,443 rooms, up 4.1 percent year over year.
  • Lodging Econometrics recently said Dallas led all U.S. markets in hotel construction pipelines at the end of the first quarter, with 203 projects and 24,496 rooms.

THE NUMBER OF U.S. hotel rooms under construction declined year over year for the sixth straight month in June, reaching a 20-quarter low, according to CoStar. Additionally, more than half of all rooms under development are in the South, mostly outside the top 25 markets.

Keep ReadingShow less
G6 Hospitality Launches 24/7 Guest Support From August 1
Photo credit: G6 Hospitality

G6 launching 24x7 guest support on Aug. 1

Summary:

  • G6 Hospitality will launch 24x7 guest support on Aug. 1, expanding the current 18-hour window.
  • Escalations from phone, email and social media will be handled promptly by trained staff.
  • The service supports G6’s tech and service investments, including the AI-powered My6 app.

G6 HOSPITALITY, PARENT of Motel 6 and Studio 6, will launch a 24x7 customer support service for guests starting Aug. 1. The service extends the previous 18-hour window to full-day availability via phone, email and social media.

Keep ReadingShow less
U.S. travelers using mobile devices to book independent boutique hotel stays with personalized offers and smart tech in 2025

Study: Personalization boosts independent hotel bookings

Summary:

  • Around 95 percent of U.S. travelers are more likely to book independent hotels with personalized offers, according to TakeUp.
  • 59 percent plan more travel in 2025, with 78 percent favoring weekend getaways and 65 percent domestic trips.
  • Top booking deterrents are few reviews at 39 percent, unclear cleanliness or quality at 38 percent and inflexible cancellations at 29 percent.

PERSONALIZED OFFERS BASED on interests would make 95 percent of U.S. travelers more likely to book at an independent hotel, according to TakeUp, a revenue management platform for independent hotels. About 85 percent are open to technologies such as smart check-in, recommendations and AI-based pricing.

Keep ReadingShow less
Chart showing decline in U.S. extended-stay hotel occupancy and RevPAR in May 2025

Report: May fifth month for drop in extended-stay occupancy

Summary:

  • Extended-stay occupancy fell 2.2 percent in May, the fifth straight monthly decline; ADR and RevPAR also dropped for a second consecutive month.
  • May marked 44 straight months of supply growth for the segment at 4 percent or less, with annual growth below the 4.9 percent long-term average.
  • Extended-stay room revenues rose 0.5 percent, while total industry revenue grew 0.9 percent, led by segments with little extended-stay supply.

EXTENDED-STAY HOTEL occupancy fell 2.2 percent in May, the fifth consecutive monthly decline, exceeding the 0.7 percent drop reported for all hotels by STR/CoStar, according to The Highland Group. Extended-stay occupancy was 10.5 percentage points above the total hotel industry, at the lower end of the long-term average premium range.

Keep ReadingShow less