Multibrand push, innovations fuel extended-stay growth

(Wyndham's Hawthorn Suites)

The extended-stay sector continues to thrive—Mark Skinner, partner at The Highland Group, told HOTEL MANAGEMENT in June that this year’s supply increases are slated to reach 7 percent to 8 percent. While the segment has never benefited from the same brand proliferation as other categories in the industry, recent new developments and innovations have been transforming the extended-stay market at a rapid clip.

Choice Hotels International’s MainStay Suites brand announced a new prototype at its annual conference in May after Wyndham Hotel Group’s Hawthorn Suites announced a new electronic cookbook created just for Hawthorn guests in February. After launching the “Take Flight” redesign program for Homewood Suites in 2014, Hilton is taking aim at family travelers with the May launched of its first ad campaign focused on its three all-suites brands, which include extended-stay Homewood Suites and Home2 Suites. In fact, both extended-stay brands will be paired with a Hilton Garden Inn to form Hilton’s first triple-branded hotel, which is scheduled to open at Chicago’s McCormick Place in late 2018.

Hilton's triple-brand project is part of the new trend of combining brands to attract owners with a lower cost and operating efficiencies. The concept continues to gain momentum as Sonesta ES Suites joins the ranks of dual-branded hotels with the upcoming November addition of an ES Suites property to the existing Sonesta Gwinnett Place Atlanta. The focus for the new extended-stay product’s sales team will be on local companies that bring consultants, outside contractors and long-term project leads to Atlanta for weeks or months at a time. “An extended-stay salesperson can help drive awareness and sales in the local market for the complex in their backyard and the local marketing effort provided by the complimentary brand can increase the reach for the complex,” said Mike Wohl, VP operations at Sonesta ES Suites. “I think we’ll see specific multibranded operational platforms, onsite management with this experience, and multibrand dedicated support experts as the multibrand product matures.”

As Hilton carries on forging its own path of multibranded properties, the company is also looking beyond U.S. borders to further develop its extended-stay brands. Bill Duncan, global head for Hilton's all-suites brands, described the interest among international developers and owners as “emerging,” but explained that there is a growing awareness of the profitability potential of the product. “South of Mexico, the notion of space really shifts to an almost European mindset, so we don’t need as much space to bring the extended-stay product to life,” he said, adding that in North America, a Homewood Suites studio is 423 square feet whereas in Latin America, 320 square feet is sufficient space to create a studio with a full kitchen and separate dining area.

Design Evolution Continues

Extended Stay America is also forecasting growth for its brand, with plans to add 750 hotels over the next three to four years, following the company’s June announcement of a new franchise development program. In the meantime, Extended Stay America is anticipating an increased wave of long-term road warriors: Tom Buoy, EVP marketing and revenue management, said that “because of the gig economy, people are traveling more as independent contractors so while there may be some instability in the work environment, the result will be greater lodging needs as people work more and more in nontraditional ways.” With that in mind, the brand recently completed a $1 billion enhancement program that transformed its entire portfolio, adding more in-room storage and larger community space where guests can relax, socialize or work.

Research for MainStay Suites’ new prototype also revealed that technology capabilities continue to be a driver in attracting extended-stay guests exactly because of the rise of millennial travelers and the freelance economy. “Whether for entertainment or work, these travelers want to bring all of their content with them during their extended stays and that will continue to drive some of changes in the segment over the next few years,” said Caragh McLaughlin, head of brand strategy at MainStay Suites. She expects to see greater bandwidth become an even greater priority for the segment as guests increasingly want to stream content from Netflix and HBO Go while also working.

Another possibility on the horizon is the ability to preorder business-center equipment to have delivered to the guestroom in order to accommodate the attorneys and IT professionals who currently travel with much of their own equipment because they can’t use publicly available facilities in a hotel. Similarly, she also anticipates that a secure Wi-Fi network as an upsell may also become available to such guests who work with sensitive information that can’t be transmitted via public networks, but may not work for organizations like governments that provide employees with virtual private networks.

Healthier Dining Options on the Rise

Food is another focus for the future in extended stays. Hawthorn Suites by Wyndham is building upon its focus on food and fitness that includes a bike-share program and the [email protected] seasonal recipe collection. “Forty-five percent of all business travelers looking for long-stay hotels are looking to cook in their rooms,” said Larry Hambro, Hawthorn Suites' VP brand operations. “We’re focused on getting our guests back into the kitchen to prepare quick, healthy meals because if we can help guests maintain their routines, we’re a natural magnet for long-term guests.” Now Hawthorn is in the midst of a pilot program in conjunction with grocery delivery services Instacart and Peapod. While the program is currently being tested at nine properties, Hambro said it will be re-evaluated in the fall to determine next steps for a rollout.

Hilton, too, is working to further develop the F&B offerings available at its all-suites brands. After noticing that guests frequently work or socialize together in the lobby, with wine and beer purchased from outside the hotel, Duncan said a redesigned grab-and-go option for all-suite lobbies is under evaluation. Changes would include a healthier selection of food options, including fresh sandwiches and salads, as well as beer or wine by the glass and possibly more premium breakfast options than what’s available at the complimentary breakfast stations.

Other considerations include possibly partnering with local cafes to supply and operate the outlets as well as the outlets’ design, which Duncan said will be similar to Starbucks’ grab-and-go set-up. “We need to consider merchandising because we want to make the concept appealing to guests without having a blunt intersection in the lobby and we also want to create a potential new revenue stream for our operators,” he said.