Skift Take
The extended stay portion of the lodging business continues to see strong demand. But are extended stay brands doing enough to keep up with travelers' evolving tastes and needs? And what about Airbnb?
Extended stay hotels are a particularly bright spot in an otherwise steady hotel industry, especially in the U.S.
These properties, often distinguished by having a kitchenette in each room and taking reservations, instead of requiring a lease, saw room night demand go up 5.4 percent in 2016 compared to 2015, according to a U.S. Extended Stay Lodging Market 2017 report from The Highland Group.
That same report found occupancy for extended stay hotels remains steady at just over 75 percent. To date, there are about 40,000 extended stay properties in the U.S. alone and that number will continue to grow: rooms under construction for this category are up 16 percent compared to 2015, a record high.
"Demand is at a record high," said Mark Skinner, partner at The Highland Group. "More people are staying at extended stay hotels in the U.S. today than there were as ever before but what's also true of the overall hotel industry is that these extended stay hotels are seeing record revenues. Just to put a number it's probably $11 billion in 2016, not including corporate apartments which would be $3 billion. For 2015, room revenue for extended stay hotels was close to $10 billion."
The ways in which customers are using extended stay hotels are also expanding. What was traditionally thought of as something specifically geared toward business travelers working on long projects or perhaps relocating has now become a lodging option for people staying four days or less.
"Extended stay is defined by five days by the industry, and I have looked hard to find a week with only five days in it," said Jack DeBoer, the founder of Residence Inn, Summerfield Suites, and Candlewood Suites, and now CEO of WaterWalk Hotel Apartments. "I think they've [the industry] has abominated it [the extended stay category of lodging] from what it was originally intended to be."
Mark Mahoney, executive vice president of sales for Extended Stay America, said he's also seen the length of stay for extended stay hotel guests become shorter and shorter as well. "The overall volume in the number of stays we experience from relocations and extended stay has been increasing, but the actual length of stay is decreasing. I think that evolution has been a result of visibility and accessibility of the segment."
It's clear there's certainly demand among guests for these types of properties, whether for shorter or longer stays, business or leisure, and hotel owners and developers are respondin
