US economy extended stay RevPAR is double that of luxury sector in April

George Sell George Sell Uploaded 03 June 2020

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US: The latest figures from The Highland Group show that the economy extended stay hotels reported average RevPAR of $29.78 in April, around double that of the luxury sector.

This was a fall of 18 per cent compared to April 2019. Mid-price extended-stay saw a year-over-year (YOY) RevPAR decline of 55.8 per cent, while upscale extended-stay dropped 76.3 per cent.

“Extended-stay hotels, especially the economy segment, should continue to demonstrate RevPAR loss resilience during the foreseeable future,” said Mark Skinner, partner at The Highland Group. All extended-stay hotel segments reported higher occupancy than the US hotel average, with YOY declines of 12.3 per cent for the economy segment, 39.5 per cent for mid-price and 66.1 per cent for upscale.

The Highland Group report noted that the closure of some mid-price and upscale extended-stay hotels distorted the distribution of rooms open compared to one year ago. The change in distribution coupled with large losses of higher-rated guests caused overall extended-stay ADR to fall 34.7% in April 2020 compared to one year ago. ADR losses were lower than the 44.4% decline STR reported for the overall hotel industry.

April ADR for the economy extended-stay segment dropped 6.5% to $44.21 in 2020 from $47.28 in 2019, while mid-price fell 27% ($64.61 from $88.52) and upscale declined 30.2% ($66.71 from $102.17).

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