No Frills, High Margins: Inside Extended Stay America's Formula
Photo Credit: Exterior of an Extended Stay America Premier Suites hotel in Pueblo, Colorado. ESA
Skift Take
Extended Stay America turned kitchenettes and weekly housekeeping into an over $6 billion business. Now everyone wants a piece. The model is usually resilient even during recessions.
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What are the top trends impacting hotels, airlines, and online bookings? We speak to the executives shaping the future of travel.There's nothing sexy about Extended Stay America (ESA). No rooftop infinity pools. No celebrity chef restaurants. And definitely no turndown service with artisanal chocolates on your pillow.
But ESA does have over 700 nearly identical hotels scattered across 45 states, most sitting near highway overpasses or office parks. Guests settle for weeks or months and buy groceries to stock their kitchenettes.
As ESA turns 30 this year, it has become the object of envy, with larger rivals like Hilton, Hyatt, Marriott, and Wyndham rushing to replicate its brands.
"Eight new extended-stay brands have been announced in the past several years," said Greg Juceam, ESA's president and CEO.
That's a lot of added competition since 2021 when Blackstone and Barry Sternlicht's Starwood Capital took ESA private in a $6 billion deal.
Yet Juceam is confident ESA can sustain its market lead and that there's enough demand to support the increasing supply. Last year, ESA served 22 million guests and "had 180 basis points of market share growth," he said.
A guestroom at an Extended Stay America property in the San Diego area. Source: ESA. Two Nights? No Thanks.The secret to ESA's stability is almost absurdly simple: Longer stays equate to better economics than traditional hotels enjoy. Lower costs can drive higher margins, even though extended stay typically commands low
