Extended Stay America has launched Extended Stay America Premier Suites. The new brand will have new construction and fully renovated properties with upgraded amenities to target higher-rated extended-stay guests, expanding Extended Stay America’s reach. The company will also rebrand the remaining portfolio to Extended Stay America Suites.
“The new Premier Suites brand builds on our legacy to provide a great value to extended-stay customers that demand more,” said Bruce Haase, president and CEO, Extended Stay America. “This is the latest example of our singular focus on the extended-stay customer to create a new product that anticipates what guests want and delivers them unmatched value and service while focusing on our core strength, the extended-stay sector of hospitality.”
Extended Stay America Premier Suites will target average daily rates between $80 and $100 per night and feature additional amenities, including an enhanced healthy breakfast, larger TVs, increased storage space and a signature bedding package. The new brand will launch in second quarter 2021 with more than 30 properties across the country.
“Through extensive customer research, we found that the Extended Stay America brand could reach more customers by providing a product that appealed to a large segment of extended stay travelers who were looking for a fresh product with the amenities they value the most.” said Judi Bikulege, chief investment officer, Extended Stay America. “Extended Stay America Premier Suites is designed to meet the needs of these consumers.”
Additionally, Extended Stay America will rebrand the remainder of its core hotels to Extended Stay America Suites over the next several months to better communicate the current product offering. Extended Stay America’s evolution from a single-branded company to a multi-brand portfolio under the Extended Stay America umbrella will better capitalize on the brand’s strength and the company’s expertise in the extended-stay market.
“Rebranding our core hotels to Extended Stay America Suites communicates our current offering more clearly to guests,” said Mark Williams, managing director, franchise development, Extended Stay America. “The core brand will become our primary target for franchise conversions going forward while Extended Stay America Premier Suites will be the primary growth vehicle for new build construction and higher quality conversions. With this new brand architecture, we will be able to offer our franchisees more options, and we anticipate growing our franchise community throughout 2021 and beyond.”
Extended Stay America anticipates this change will best position its existing core brand to grow rate from its current guests and positions the Premier Suites brand at a higher ADR to attract new customers. The benefits of this new brand architecture will allow Extended Stay America to maximize the value of its portfolio, focus renovation investment on assets that will realize the greatest returns, increase the pace of franchise development, and drive improved earnings before interest, taxes, depreciation and amortization across the entire Extended Stay America umbrella, according to the company.
ESA Earnings
In addition to the new brand introduction, Extended Stay America also released its fourth-quarter and full-year 2020 results. For Q4 2020, ESA reported net income of $65.7 million and total revenues of $259.3 million. Comparable systemwide revenue per available room declined 9.4 percent to $42.46 with comparable systemwide occupancy of 73.7 percent. Adjusted earnings before interest, taxes, depreciation and amortization were $89.3 million.
The company's RevPAR index improved 40 percent against its closest competition during the fourth quarter, Haase noted in the earnings statement.
For the full-year 2020, total revenues declined 14.4 percent to $1,042.3 million driven by the decrease in hotel revenues as a result of the impact of the COVID-19 pandemic. Comparable systemwide RevPAR for the full year 2020 dropped 15 percent from 2019 to $42.91, driven by a 11.6 percent decline in ADR and a 300 basis point decrease in occupancy to 73.8 percent.
As of Dec. 31, the company had a pipeline of 56 hotels representing approximately 6,800 rooms. Two company-owned hotels and seven franchised hotels opened during the fourth quarter, resulting in a total of 17 systemwide hotels opened for the full year 2020.
“We continue to see opportunities for growth from improvements to our commercial engine and operating performance as well as unlocking value in our [real estate investment trust] through accretive asset transactions,” Haase said.