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Report: U.S. extended-stay supply grew 3.3 percent in August

It marked the 35th month of supply growth at 4 percent or less

Report: U.S. extended-stay supply grew 3.3 percent in August

U.S. EXTENDED-STAY ROOM supply increased by 3.3 percent in August, surpassing the average monthly growth over the past two years, according to The Highland Group. This rise is partly attributed to the inclusion of WaterWalk by Wyndham, a mid-price extended-stay brand, in the database starting in May after its affiliation with Wyndham.

August also marked the 35th consecutive month of supply growth at 4 percent or less, with the annual supply change remaining below 2 percent for the past two years, as revealed in The Highland Group’s U.S. Extended-Stay Hotels Bulletin. However, both metrics are well below the long-term average, the report found.


The 11.9 percent increase in economy extended-stay supply, along with modest gains in mid-price and upscale segments, is primarily due to conversions. New construction in the economy segment is estimated at only 3 percent of rooms compared to last year, the report noted.

Supply change comparisons have been affected by rebranding, the de-flagging of hotels that no longer meet brand standards, and the sale of some hotels to multi-family apartment companies and municipalities. This trend is expected to taper off during the remainder of 2024, with the total increase in extended-stay supply compared to 2023 remaining well below the long-term average.

“August was another very good month for extended-stay hotels as demand growth exceeded the change in supply for the fifth straight month and the strongest respective gains in RevPar and ADR were recorded in four and ten months," said Mark Skinner, The Highland Group’s partner.

Revenue rises

Extended-stay hotels saw a 5.7 percent revenue increase in August, marking the fifth consecutive monthly gain of 4 percent or more and the largest growth in 15 months, The Highland Group reported. This outpaced the 4.6 percent increase reported by STR/CoStar for the overall hotel industry.

The growth in extended-stay hotel occupancy in August marked the fifth consecutive monthly increase after more than a year of consistent declines. However, this fractional gain was smaller than the 1.4 percent increase reported for the overall hotel industry by STR/CoStar.

In August, extended-stay hotel occupancy was 11.8 percentage points higher than the total hotel industry, consistent with the historical long-term average occupancy premium for summer months.

After monthly declines in February and March—the first in three years—extended-stay hotel ADR increased for the fifth consecutive month in August, marking the largest gain since October 2023.

The economy segment posted ADR increases for the third straight month after five consecutive declines, marking the largest monthly growth in a year. Compared to all hotel classes, only upscale extended-stay hotel ADR performed worse in August, with a differential of just 0.1 percent.

Extended-stay hotels reversed a four-month decline in monthly RevPAR starting in April, continuing through August, with August’s gain being the strongest in four months. However, as typical for summer months, the RevPAR increase was lower than the 3.6 percent gain reported by STR/CoStar for the overall hotel industry.

Economy extended-stay hotels saw a 0.3 percent monthly increase in RevPAR in August, marking their second consecutive rise after over a year of decline. Mid-price extended-stay hotels continued to lead RevPAR growth in the sector for the fifth straight month.

The Highland Group reported that extended-stay room supply grew by 3.1 percent in July, exceeding the average monthly increase over the past two years.

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