ATLANTA—The extended-stay segment has put up strong performance for a number of years, but many in the industry didn’t realize its stability until the pandemic. Since then, it seems like everyone wants to talk about and be involved with the segment—but that doesn’t mean that everyone is an expert.
To help elevate the conversation around and operation of the extended-stay segment, a number of executives in the space have launched the Extended Stay Lodging Association, a trade association dedicated to advancing the extended-stay lodging industry by providing an impartial forum for stakeholders in the segment to share ideas, innovations and best practices. The group was introduced at the Hunter Hotel Investment Conference.
Sharing experiences will be crucial to the success of the group, according to Doug Artusio, chairman and CEO of Dellisart Hospitality and founder and chairman of the Extended Stay Lodging Association. “I've had my successes over the years I've had some failures and I think that others will learn and can learn from me and learn from others,” he said. “With all these experts on the board, this is a forum to get better as an industry and as a segment.
"The extended-stay segment is a unique niche within the hospitality industry with different keys to success in all traditional areas from development, sales and marketing as well as operations. ESLA will be the place for extended-stay owners and other stakeholders in this segment to share strategies, innovations, and technical tools."
In addition to Artusio, the board of directors for the Extended Stay Lodging Association comprises Simon Mendy, divisional president, select service, Aimbridge Hospitality; Matt McElhare, senior director, extended stay brands, Choice Hotels International; Carl Hren, senior vice president development, Concord Hospitality; Glenn Bisbing, director franchise services, Extended Stay America; Kimberly Rowell, executive vice president, Five Star Hospitality & Development Group; Rick Colling, brand leader, Homewood Suites by Hilton; Mark Skinner, partner, Highland Group, Scott Stephens, senior principal and COO, HREC; Matt Hostetler, chief development officer, Red Roof; and Phil Hugh, head of lifestyle and lodging development, Sonesta International Hotels Corp.
ESLA will provide developers, owners, lenders and other stakeholders with a combination of educational webinars and educational opportunities on a variety of topics, including educating and sharing historical market and industry data on extended-stay industry performance; educating members on the importance of proper due diligence for market selection; pre-opening planning; listing of franchised extended-stay brands for members further investigation; and educating members on general extended-stay demand generators, types of businesses to pursue, measuring profitability and unique ways to find these purpose-driven clients.
“We'll have this opportunity to share with our fellow owners, as well as the other stakeholders,” Artusio said. “We'll have memberships in various categories of our stakeholders and we can share things in many ways that the brands can’t. We're not defined by the [franchise disclosure document] or by certain legal ramifications. So if someone wants to chat with me individually about performance, we can talk about performance. We can talk about development schedules, we can talk about [gross operating profit], [net operating income], [return on investment]—any kind of level of information you'd like to do. And then if they want information from the brands we will have ways to link into the brands so that they can speak on their own behalf.”
Artusio stressed that the group is not selling franchises or representing brands—it’s solely about education and sharing wisdom.
“We'll talk best practices. We'll talk about various tools that we have, maybe their development models, maybe their five-year pro formas,” he said. “These people have come together in a completely philanthropic aspect.”
Mendy said extended-stay should be a safe space for investors but safety isn’t a given—it still requires smart decisions.
“I think as we look at the whole evolution from the pre-COVID to COVID period where there is all of a sudden an epiphany about extended-stay and how profitable it is and how resilient it is. How come people are just finding out when it's always been the case?” he said. “That is why it is important that we have an association like this. It is a safe space and we need to make sure that investors understand, that new prospective owners understand that they have an opportunity to invest … and have great margins to benefit from. How do we do that? We can help educate them [about] all the options out there.”
Rowell is looking forward not only to educating members, but to expanding her own knowledge, as well.
“Many operators now entering … extended-stay have historically operated in either an economy or a focused-service segment and they are trying to now develop these hotels and operating them in the same fashion and it doesn't work,” she said. “We really need to educate the owners and train the segment on the nuances and the differences so that they can maximize their profitability to the best of how we've all learned in these trying times. There isn't one mousetrap and I think it's going to evolve in a way that we've not seen it evolve thus far. So I think it won't just be a learning experience for all of our members. I think we're all going to learn collectively as well.”