Extended stay hotels continue to lead US recovery

George Sell George Sell Uploaded 09 November 2021

LinkedIn

US: The latest report from The Highland group shows that US extended stay hotels recorded an average occupancy of 77.4 per cent in September, compared with 61.6 per cent for the wider hotel industry.

The report shows that most economy and mid-price extended stay segment recovery indices were considerably higher in September 2021 compared to August, but the bottom-up recovery and room supply distribution geographically are hindering the upscale segment’s recovery.

Occupancy, ADR and RevPar indices for upscale extended stay hotels were about the same in September as in August but the decline in absolute ADR resulted in the segment’s revenue recovery falling below 95 per cent.

The 4.2 per cent increase in extended-stay room supply in September was the lowest monthly gain this year, reflecting the declining uptick to supply growth from reopening hotels closed during the pandemic.

The overall hotel industry lost far more revenue than extended-stay hotels in 2020, so it is now recovering revenue relatively quickly. STR reports all hotel room revenue was up 80 per cent in September 2021 compared to one year ago.

Upscale extended stay hotels endured the largest fall in demand and are leading the demand recovery. Extended stay hotel demand reached 12.93 million room nights in September 2021. For comparison this was nine per cent higher than September 2019.

The waning boost from summer travel impacted overall hotel industry occupancy more than extended stay hotels, widening extended stay hotel’s occupancy premium to 16 percentage points in September. The premium has stayed above its long-term average for most of the last 18 months.

Economy and mid-price segments both reported about a three-point gain in ADR recovery index in September compared to August. The upscale segment’s corresponding ADR indices were essentially unchanged.

The mid-price extended stay segment’s gains in both ADR and occupancy pushed it slightly ahead of the upscale segment in terms of RevPar growth. Because the overall hotel industry lost far more RevPar than extended stay hotels, its RevPar growth in September 2021 compared to September 2020 was more than 85 per cent greater than extended stay hotels.

LinkedIn

Be in the know.

Subscribe to our newsletter »
Subscribe

Thank you sponsors