US: Q3 performance for US extended stay hotels set 14 new records for metrics including demand, occupancy, ADR and REVPAR, according to the latest quarterly report from The Highland Group.
Additionally, in year-to-date metrics to Q3, economy extended stay hotels set four new records, mid-price reported two and the upscale segment set a new high for demand.
“It is highly likely that extended stay hotels will continue to set new performance records during the near term,” said Mark Skinner, partner at The Highland Group
Q3 room-night demand was 40,431, representing a 25.7 per cent year-over-year increase and the highest gain in demand ever reported during any quarter for the segment, according to the report. Supply growth, with various hotel closures and re-openings due to the effects of the pandemic, was 6.3 per cent during the same period, consistent with what was seen prior to the pandemic.
The overall U.S. extended stay occupancy level was 78.8 per cent for the quarter, an 18.2 per cent year-over-year increase. The economy tier reported the highest occupancy level at 83.3 per cent, followed by mid-price at 78.5 per cent. Both figures were Q3 records for their tiers and represent full recovery to 2019 Q3 occupancy levels. Occupancy in the upscale tier, however, which accounts for about 40 per cent of extended-stay room supply, was 77.2 per cent. Though lower than the other tiers, the number represents a 30 per cent year-over-year increase.
Economy and midprice ADRs have surpassed 2019 levels and set new Q3 records. Upscale-tier ADR increased 22.4 per cent from its 2020 level but still is about $9 lower than its 2019 level. The overall US extended-stay segment’s ADR was $104.96 for the quarter, about 98 per cent of the 2019 Q3 rate.
Q3 RevPAR was up 48.5 per cent year-over-year to $82.76. All three tiers showed significant year-over-year improvement, with economy and mid-price RevPAR above 2019 Q3 levels. Upscale RevPAR improved 59.1 per cent to $106.18 year-over-year, representing about 89 per cent of 2019’s third-quarter level.
