US: Starwood Property Trust CEO Barry Sternlicht says the company’s chain of extended stay hotels has been running at 85 per cent average occupancy rates during the coronavirus crisis.
The figure compares with the US hotel industry average of 48 per cent, according to STR.
During an investor call, Sternlicht said: “The two areas where demand isn’t going to return to levels it was anytime pre-Covid are hotels and retail. Those are two asset classes where you can get extraordinary deals and extraordinary spreads, but you’re going to have to predict a future that isn’t going to look like 2019, not for a while.”
But Sternlicht is bullish about the extended stay hotel sector. He acquired nearly nine per cent of Extended Stay America earlier this year through his Starwood Capital investment firm. The deal was reportedly driven by the brand’s resiliency during the initial wave of coronavirus lockdowns and downturn in US travel. While many hotels suspended operations, Extended Stay America did not have to close a single hotel.
Sternlicht also highlighted during the call that another Starwood-owned extended stay brand — InTown Suites — had an 80 per cent average occupancy rate during the first months of the pandemic.
“Twenty per cent of our hotel exposure is in extended stay hotels, which have significantly outperformed other hotel segments and averaged over 80 per cent occupancy during Covid,” added Starwood Property Trust president Jeffrey DiModica.
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