Following a general increase in revenue per available room growth over the previous three months, the extended-stay hotel segment’s 1 percent RevPAR gain in November was the smallest increase since July, according to new data from The Highland Group.
Relatively small increases in average daily rate across all three extended-stay hotel segments was the main reason for this as November’s occupancy contraction was lower than the overall hotel industry.
“November’s 1.4 percent increase in extended-stay hotel demand was consistent with the general acceleration in extended-stay hotel demand increases following slower growth during the spring and summer of 2023,” Mark Skinner, partner at The Highland Group, said in a statement.
The segment's strength has been reflected in new development deals. According to Lodging Econometrics' Q3 2023 update, 2,176 projects with 223,518 rooms in the U.S. construction pipeline were extended-stay projects at the end of September, accounting for 38 percent of projects in the total pipeline. Middle-tier extended-stay brands made up the majority of projects in the extended-stay segment at Q3, accounting for 63 percent of projects in the total extended-stay pipeline and 24 percent of projects in the total U.S. construction pipeline.