Every time you blink, another hotel company has announced a new extended-stay brand. The category is at the forefront of industry development in the United States, with the economy and midscale segments leading the way.
The proof is in the numbers. According to Future Market Insights, projections suggest that the market is poised to maintain a steady pace of expansion, with an estimated compound annual growth rate of 11.8 percent from 2023 to 2033. Such consistent growth is expected to propel the market to a value of US $166.58 billion by the end of 2033.
Why the boom? Return on investment is always a good place to start. With smaller amenity spaces and no food and beverage outlets, extended-stays are usually less expensive to build and to maintain than select-service or full-service hotels. Furthermore, the long-stay model has inherent operating efficiencies. For example, staffing requirements are lower, as housekeeping is a weekly, rather than a daily affair, and fewer check-ins and check-outs mean less demand on the front desk. An economy extended stay can operate with less than eight full-time employees, while a midscale property can run with a full-time staff of 11, according to Matt McElhare, senior director of extended stay brands at Choice Hotels International. All of these efficiencies, according to McElhare, means it’s possible to increase gross operating profit between ten and 15 percent over select-service, according to McElhare.
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