US: A mid-year 2023 report from The Highland Group reveals that extended stay hotels have gained 3.2 per cent RevPAR in Q2 compared to a 2.7 per cent for the overall hotel industry.
All three extended stay hotel segments (economy, mid-price and upscale) are reporting record high room revenues both year to date and for Q2 2023. The growth equates to an overall nine per cent increase in revenues year to date.
At $94.03 in Q2 2023, RevPar was 113 per cent of its 2019 value which is about two points ahead of the overall hotel industry’s recovery index according to STR. The 3.2 per cent RevPar gain in Q2 was the smallest quarterly increase in more than three years but it was better than the 2.7 per cent increase STR reported for the overall hotel industry.
Upscale extended stay hotels reported the largest increase in ADRs (up 8.4 per cent).
Total extended stay hotel occupancy declined 1.2 per cent in Q2 2023 compared to the same period last year. This was double the corresponding fall for the overall US hotel market according to STR. However, the extended stay industry stands at an 11 percentage point occupancy premium compared to all hotels.
There were also 30,104 extended stay hotel rooms reported under construction at the end of the second quarter 2023. At mid-year 2023, rooms under construction totalled five per cent of rooms open – the same as one year ago and a decline from eight per cent at mid-year 2021.
“Very low supply growth bodes well for extended stay hotels but the biggest single factor impacting near term metrics is likely to be the performance of the overall hotel industry,” said Mark Skinner, partner at The Highland Group.
The full US extended stay hotels: Mid-year 2023 report can be downloaded here.
