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Report: Extended-stay hotels outperform in December

The segment’s RevPAR rose 5.5 percent, the highest since June 2022

Extended-stay hotels revenue growth
U.S. extended-stay hotels ended the year strong in December, led by lower price points, with supply, demand, occupancy and revenue growth outpacing the industry, though slower ADR gains kept RevPAR growth below the broader industry, according to The Highland Group.

U.S. Extended-Stay Hotels Surge in Growth: December 2024 Industry Insights

U.S. EXTENDED-STAY HOTELS closed the year strong in December, particularly at lower price points, outpacing the overall industry in supply, demand, occupancy and revenue growth, according to The Highland Group. However, slower ADR gains led to a smaller RevPAR increase than in the broader industry.

The Highland Group’s U.S. Extended-Stay Hotels Bulletin: December 2024 reported economy extended-stay hotels saw their third consecutive monthly RevPAR increase, with December's 5.5 percent growth, the highest since June 2022.


“December was another very good month for extended-stay hotels with positive change in RevPAR in eight of the last nine months despite accelerating supply growth,” said Mark Skinner, The Highland Group’s partner.

Extended-stay room supply rose 2.7 percent in December, exceeding the two-year monthly average, the report said. The increase partly reflects the inclusion of WaterWalk by Wyndham, a mid-price extended-stay brand added to the database in May 2024 after joining Wyndham.

Moreover, December marked 39 consecutive months of supply growth at 4 percent or less, with annual supply increases staying under 2 percent for two years and expected to reach about 3 percent in 2024—well below the long-term average, The Highland Group said. Economy extended-stay supply grew 12.5 percent, while mid-price and upscale changes were modest, mainly due to conversions. New economy segment construction added about 3 percent to supply year over year.

Supply change comparisons have been affected by rebranding, de-flagging, and hotel sales to multifamily operators and municipalities. Conversion activity is expected to slow, keeping extended-stay supply growth in 2024 and 2025 well below the long-term average.

Revenue and key metrics analysis

Extended-stay room revenue rose 5.5 percent in December, marking nine consecutive monthly gains and outpacing the overall industry's 4.8 percent increase, according to STR/CoStar data. Economy extended-stay hotels saw their strongest revenue growth since March 2022.

Demand rose 3.8 percent in November, marking growth in 24 of the last 25 months. In comparison, STR/CoStar reported a 1.9 percent increase in total hotel demand for December, the report said.

Extended-stay occupancy grew 1 percent in December, the eighth increase in nine months, slightly exceeding the 0.9 percent gain for all hotels. At 15.1 percentage points above the total industry, extended-stay occupancy maintained its long-term average premium.

After declines in February and March—the first in three years—extended-stay ADR rose for the ninth straight month in December but still lagged STR/CoStar’s 2.8 percent increase for all hotels. However, economy and mid-price extended-stay segments saw faster ADR growth than their counterparts in the broader industry.

Extended-stay RevPAR rose 2.7 percent in December, matching November's gain and marking the eighth increase in nine months, the report said. However, it trailed the 3.7 percent growth reported by STR/CoStar for all hotels. Economy extended-stay hotels saw their highest monthly RevPAR increase in two and a half years.

November marked six straight months of more than 3 percent supply growth, with demand exceeding supply in all but one month, pushing occupancy, ADR and RevPAR to their highest levels in over a year, The Highland Group reported.

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