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REVPAR FOR U.S extended-stay economy, mid-scale and upscale segments is recovering back to pre-pandemic levels, according to a report from consulting firm The Highland Group. Total extended-stay hotel occupancy is very close to the first quarter levels reported in 2016 and 2017 but below its peak years since 2015. "Overall, first quarter extended-stay hotel ADR was the highest ever reported in 2023 and all three segments have more than fully recovered their 2019 nominal ADR values," the report said. In its "2023 First Quarter U.S. Extended-Stay Hotels Report," Highland said the economy and mid-price extended-stay hotels made considerable gains in RevPAR relative to corresponding classes of all hotels between 2019 and 2023. Due to high concentration of rooms in urban markets, upscale extended-stay hotels have seen RevPAR decline slightly relative to all upscale class hotels. However, the gap is expected to narrow as urban markets make a full recovery, the report noted. "Rising interest rates and construction costs, as well as tightening loan underwriting, means extended-stay supply growth should be relatively low nationally for two to three years. Assuming the overall hotel industry does not endure a correction, extended-stay hotels should set more new performance records during the near term at least," says Mark Skinner, partner at The Highland Group.

U.S. EXTENDED-STAY HOTEL room revenues increased by $1.1 billion in 2023, similar to 2018 and 2019, though with a lower relative gain due to a larger room base, according to The Highland Group. All three extended-stay segments reported record-high room revenues in 2023, with the upscale segment leading despite previously lagging behind the pandemic recovery. The 6.1 percent increase in extended-stay hotel revenues outpaced the corresponding 5.5 percent gain reported by STR/CoStar for the overall hotel industry, the report said. However, extended-stay hotel supply experienced its smallest annual increase on record in 2023, at just 1.8 percent. Factors such as re-branding, de-flagging of non-compliant hotels, and sales to other sectors influenced supply fluctuations, a trend expected to persist into the first half of 2024, particularly with older extended-stay hotels remaining on the market. The report also highlighted a 6.6 percent increase in economy extended-stay supply, alongside modest gains in mid-price and upscale segments, primarily driven by conversions. New construction in the economy segment is estimated at around 3 percent of rooms open compared to one year ago.

EXTENDED-STAY HOTELS experienced limited growth in July, reflecting the summer travel season's tendency to favor the overall hotel industry more than extended-stay establishments, according to The Highland Group. Total hotels reported a smaller decrease in occupancy and a slightly higher increase in ADR compared to all extended-stay hotels in July 2022. According to Highland, Extended-stay hotels performed similarly to the preceding three months in July. The economy segment reported a decrease in RevPAR, while upscale extended-stay hotels saw the strongest RevPAR increase. However, ADR growth across extended-stay segments has noticeably narrowed over the last three months. For the second consecutive month, the economy segment achieved faster ADR gains compared to mid-price extended-stay hotels. "Extended-stay hotels' 9.2 percentage-point occupancy premium above the overall hotel industry is slightly below the long-term annual average range but typical for the summer travel season," said Mark Skinner, partner at The Highland Group.

ALL RECOVERY INDICES of U.S. extended-stay hotels were lower compared to 2019 in May than in April, according to hotel investment advisors The Highland Group. The demand for economy extended-stay hotels declined 1.3 percent for the second consecutive month in May compared to same period last year mainly due to sharp increase in ADR in last few months, the report said. The U.S. Extended-Stay Hotels Bulletin: May 2022 by The Highland Group said that the extended-stay room supply growth was just 1.9 percent during the month. It is the second successive month that the growth was below 2 percent since 2013, and the eighth consecutive month of 4 percent or lower supply growth. The report added that the supply increase will be well below pre-pandemic levels during the near term. According to STR, all hotel room revenue was up 43 percent in May 2022 compared to last year. "In May, mid-price and upscale extended-stay segments reported their lowest monthly change in demand in 2022. Except for February 2021, due to the leap year in 2020, economy extended-stay hotels reported only the second monthly fall in demand in 23 consecutive months," the report said. "Overall hotel occupancy gained more than extended-stay hotels in May compared to one year ago, decreasing extended-stay hotel's occupancy premium to 12 percentage points, and remains within its long-term average range."

U.S. EXTENDED-STAY HOTELS set new records for demand, ADR, RevPAR and room revenues in the fourth quarter of 2022, according to a report from hotel investment advisors The Highland Group. Also, the report showed rate resistance is apparent at lower price points due to recession and the economy extended-stay segment reported nine consecutive months of declining demand and three successive quarterly falls in occupancy. According to the Highland Group's "U.S. Extended-Stay Hotels: Fourth Quarter 2022" report, mid-price extended-stay hotels reported their second consecutive quarterly decline in occupancy in fourth quarter. Similar occupancy declines occurred for about two years starting in mid-2015 before ADR growth moderated and occupancy recovered. Extended-stay hotel supply growth was the lowest since 2013 during the quarter, below its long-term historical average for 20 consecutive quarters. The last time extended-stay supply growth was consistently near its current level was from 2010 fourth quarter through third quarter of 2014. "Extended-stay hotel RevPAR was more than 12 percent higher than in fourth quarter of 2019. There were 567,770 extended-stay hotel rooms open at the end of the quarter. Excluding 2020, the 6,481 net gain in rooms open over the last year was the lowest annual increase since 2012. Room nights available increased 1.2 percent over the last year which was the smallest annual gain in supply for nine years," the report said. "Fractional net economy and upscale segment supply gains compared to 2021 are largely due to re-branding moving rooms between segments in our database, de-flagging of hotels which no longer meet brand standards, as well as the sales of some hotels to multi-family apartment companies and municipalities."

U.S. EXTENDED-STAY hotels experienced their first quarterly decline in RevPAR since the first quarter of 2021, according to The Highland Group. In the first quarter, the segment saw a 1.6 percent drop in RevPAR, despite a 1.5 percent increase in revenues. Demand increased by 1.7 percent, contrasting with a 2.8 percent fall in total hotel demand when excluding upper upscale and luxury segments. STR/CoStar estimated that overall hotel RevPAR, excluding upper upscale and luxury segments, which have minimal extended-stay room supply, increased by 1.3 percent in the first quarter of 2024 compared to the same period in 2023. The Highland Group's 2024 First Quarter U.S. Extended-Stay Hotels report indicated that overall hotel RevPAR and room revenues declined by 1.1 percent and 0.9 percent year-to-date, respectively, excluding upper upscale and luxury segments.

EXTENDED-STAY HOTELS DISPLAYED varied performance in December compared to the overall hotel industry, with supply, demand, and room revenues showing relative gains, according to The Highland Group. Occupancy experienced a milder decline than the broader hotel sector while low ADR growth and an unexpected decline in economy extended-stay RevPAR resulted in a total extended-stay hotel RevPAR decrease versus a slight RevPAR increase in the overall hotel industry. The 2.4 percent net increase in extended-stay room supply in December represents a modest rise compared to the average over the past 18 months and a slight gain over the most recent three months, the report said. Supply shifts overview December marked nine consecutive quarters with 4 percent or less supply growth, significantly below the long-term average, according to The Highland report. The 13 percent surge in economy extended-stay supply and the reduction in mid-price segment rooms are primarily attributed to conversions, with new construction in the economy segment accounting for approximately 3 percent of rooms compared to a year ago.

THE COLLECTIVE RECOVERY indices of U.S. extended-stay hotels exceeded 100 percent in November for the first time in 2021, according to hotel investment advisors Highland Group. The strongest gains were reported by mid-price and upscale extended-stay hotels. Economy extended-stay hotels continue to lead the RevPAR recovery during the month with a 22 percent gain compared to two years ago, according to "U.S. Extended-stay Hotels Bulletin: November 2021" report from the Highland Group. According to the report, the 4 percent increase in extended-stay room supply in November tied with October as the lowest monthly gain in 2021. "The impact to supply growth from reopening hotels closed during the pandemic is effectively over. Early indications are that mid-price and upscale supply growth should be well below pre-pandemic levels during the near term," the report said. "The overall hotel industry lost far more revenue than extended-stay hotels in 2020, so it is now recovering revenue more quickly." STR reported that all hotel room revenue was up 110 percent in November compared to a year ago.

U.S. EXTENDED-STAY HOTELS set new performance records for demand, ADR and RevPAR in the third quarter of 2022, according to a report from The Highland Group. However, rate resistance is growing at lower price points as recession fears loom. The "U.S. Extended-stay Hotels: Third quarter 2022" report by the Highland Group said that the economy extended-stay segment reported six consecutive months of demand drop and two successive quarterly falls in occupancy in the quarter ending September. "Mid-price extended-stay hotels reported first quarterly decline in occupancy since fourth quarter of 2020. Excluding the last 15 months, extended-stay hotel ADR is still increasing at the fastest rate for 20 years but, like the overall hotel industry, ADR growth continues to decelerate," the report said. "The slowdown in ADR growth is greatest at higher price points although mid-price and upscale extended-stay ADR is still increasing faster than the economy segment."

U.S. EXTENDED-STAY HOTELS continued their good performance in all measures of performance in April compared to 2019 and higher than in March, according to hotel investment advisors The Highland Group. Due to seasonal increases in leisure travel, the upscale extended-stay hotels benefited the most from the greatest lift in recovery indices except ADR. Meanwhile, mid-price extended-stay hotels achieved the strongest monthly gains in ADR and room revenues compared to April 2021, the U.S. Extended-Stay Hotels Bulletin: April 2022 report said. Economy extended-stay hotels continued the lead the recovery compared to 2019, but, demand declined 1.4 percent in April this year compared to April 2021, mainly due to strong increases in ADR over several months. "The 1.8 percent increase in extended-stay room supply in April is the first month supply growth reported below 2 percent since 2013 and the seventh consecutive month of 4 percent or lower supply growth. It is likely that the supply increases should be well below pre-pandemic levels during the near term," the report said.

WYNDHAM HOTELS & RESORTS and WaterWalk recently launched a new upscale brand, "WaterWalk Extended Stay by Wyndham." This deal will introduce up to 11 hotels with more than 1,500 rooms, initially in markets such as Tucson, Jacksonville, and Wichita. Pictured is the lobby of the WaterWalk by Wyndham - Phoenix. The new brand is Wyndham's 25th addition to its portfolio and will join the company's existing economy and mid-scale extended-stay brands, Wyndham said in a statement. "In the last year, guest demand for the extended stay segment reached record highs, which has been underscored by demand from owners and developers looking for new opportunities to partner with Wyndham," said Chip Ohlsson, Wyndham's chief development officer. "Our vision is to offer the industry's most robust portfolio of extended stay brands and the addition of WaterWalk marks an important step in that direction-helping ensure we have an offering in every segment, for every owner and for every guest." WaterWalk, founded by the late Jack DeBoer, currently runs 11 hotels in the U.S., the statement added. Newer hotels adopt the brand's Gen 2.0 prototype, focusing on efficient design and lower operating costs to increase profitability.

U.S. EXTENDED-STAY hotels posted record high demand in January and monthly RevPAR was up by more than one third mainly due to record ADR growth during the period over 2021, according to hotel investment advisors The Highland Group. Occupancy extended-stay hotels also remained high in the month when compared to the overall hotel industry's long-term average. The supply growth of 3.5 percent in January further indicated that mid-price and upscale supply increases should be well below pre-pandemic levels during the near term, according to "U.S. Extended-Stay Hotels Bulletin: January 2022" report by Highland Group. It is the fourth consecutive month of 4 percent or lower supply growth. The report said that the overall hotel industry lost far more revenue than extended-stay hotels in 2020 and 2021, so it is now recovering revenue more quickly. Besides, overall hotel industry lost far more RevPAR than extended-stay hotels in 2020, its RevPAR growth in January this year compared to last year was considerably greater.

AS THE FIRST half of 2022 ended, U.S. hotels overall were catching up with extended-stay hotels in terms of recovery, according to a report from The Highland Group. RevPAR recovery, for example, was almost the same for hotels overall and extended-stay. Also, the report found that new construction fell to an 8-year low over the first two quarters of the year, according to the report. For the first time in 18 months, the overall hotel industry's second quarter RevPAR recovery index surpassed 100 percent, matching the extended-stay hotel's 109 percent index. Economy and mid-price extended-stay hotels are still ahead of the overall recovery as well as upscale extended-stay hotels. The gap between the segments is expected to narrow over the near term.

U.S. EXTENDED-STAY hotels registered an increase in occupancy and ADR in the first quarter of this year, according to hotel investment advisors The Highland Group. Record high demand, low supply growth and rising overall ADR are driving the strong performance. Economy and mid-price extended-stay hotels recovered RevPAR to their nominal 2019 values and the former is leading the recovery, the U.S. Extended-stay Hotels: First Quarter 2022 report said. However, the upscale extended-stay segment is lagging the overall recovery but reporting slightly better recovery performance as demand is at an all-time high, the report added. "There were 564,257 extended-stay hotel rooms open at the end of the first quarter. However, the 17,165 net gain in rooms open over the last year was the lowest annual increase since 2014, excluding 2020. Room nights available increased 3.1 percent over 2021, but supply growth dropped 50 percent from 2016 across all three segments," the report said.

ADR GROWTH FOR U.S. extended-stay hotels reached a record high in February, according to hotel investment advisors The Highland Group. Owing to this, the segment saw record high demand and monthly RevPAR up by more than 40 percent during the month compared to a year ago. During the month, occupancy growth was also significant with extended-stay hotel's occupancy premium compared to the overall hotel industry staying well above its long-term average. The 3.1 percent increase in extended-stay room supply in February is the fifth consecutive month of 4 percent or lower supply growth, according to "U.S. Extended-Stay Hotels Bulletin: February 2022" report by Highland Group. It suggested that mid-price and upscale supply increases should be well below pre-pandemic levels during the near term, the report added.

THE REVPAR RECOVERY of U.S. extended-stay hotels remain unchanged in August compared to July, according to consulting firm The Highland Group. However, ADR growth for mid-price and upscale segments decreased for the fifth consecutive month but remained higher than any other period before 2021. STR said that hotel occupancy gained 5.3 percent in August 2022 compared to same period last year, decreasing extended-stay hotel's occupancy premium to 12.6 percentage points compared to more than 14 points in August 2021. But the premium remains well within its long-term average range. Economy and mid-price extended-stay segments reported much faster ADR growth compared to corresponding segments during the month, according to the US Extended-Stay Hotels Bulletin: August 2022. The economy segment continued leading the RevPAR recovery compared to 2019, but demand declined 1.9 percent for the fifth consecutive month compared to August 2021 due to strong increases in ADR.

THE DEMAND PREMIUM that extended-stay hotels have experienced over the past two years compared to other types of hotels is beginning to ebb, according to consulting firm The Highland Group. Also, ADR growth decelerated for the fourth consecutive month in July but remains higher than any other period before 2021. The overall hotel industry revenue recovery is now only one half a point greater than extended-stay hotels, according to the US Extended-Stay Hotels Bulletin: July 2022 report by the Highland Group. According to STR, all hotel room revenue was up 12.1 percent in July this year compared to last year. "For the first time in more than two years all three extended-stay segments reported a monthly decline in demand compared to the previous year. Demand declines in economy and mid-price segments, which were less than corresponding falls for all hotels in the same rate categories, are mainly correlated to strong growth in ADR. The upscale segment's demand decline is correlated to both increasing ADR and the contraction in supply," the report said.

HAWKEYE HOTELS RECENTLY acquired the Hotel Indigo Pittsburgh East Liberty in Pittsburgh. It is the company's third hotel owned and operated in Pennsylvania. The 135-room Indigo is a restored boutique hotel in Pittsburgh's historic East Liberty Neighborhood, according to the Hawkeye. Nearby are the Carnegie Museum, Carnegie Mellon University, the University of Pittsburgh, Phipps, Heinz Chapel, St. Paul's and East Liberty Presbyterian Church. Its interior décor reflects the neighborhood's community's theater, entertainment and charitable heritage. Hawkeye closed on the transaction 21 days after executing the contract. It has recently acquired, developed and operated dozens of hotels in over 20 states across the U.S. "We continue to be bullish on the hospitality market recovery and look forward to seeking out additional opportunities to acquire hotels across the U.S.," said Parth Patel, Hawkeye's head of investments. The company is considering acquiring an upscale extended stay hotel in Erie, Pennsylvania, where it recently opened Holiday Inn.

STONEBRIDGE COS. HAS acquired the Le Méridien New Orleans hotel for $84 million from Park Hotels & Resorts Inc. It is the second acquisition in the city in 12 months for the Denver-based company, started by CEO Navin Dimond. The 410-room, full-service upscale hotel on Poydras Street is near the city's French Quarter, Bourbon Street and Warehouse Arts District. Also nearby are the New Orleans Ernest N. Morial Convention Center, Mercedes-Benz Superdome, Smoothie King Center and the Port of New Orleans Cruise Ship Terminal. Amenities include a rooftop pool, onsite restaurants and more than 13,000 square feet of event space. With the new purchase, Stonebridge's portfolio stands at 63 hotels and more than 10,000 guest rooms, including select-service, extended-stay, mid-scale and full-service hotels in several states. It is the first Le Méridien hotel for the company, Dimond said. "Last year we purchased the Embassy Suites by Hilton New Orleans," Dimond said. "New Orleans is truly a great American city, and the Le Méridien is ideally located for both leisure and business travelers alike visiting downtown New Orleans."

AURO HOTELS RECENTLY ACQUAIRED the Residence Inn by Marriott Atlanta Buckhead/Lenox Park. Hunter Hotel Advisors helped broker the deal, which it said is another example of the strength of the extended-stay segment that has been seeing increased interest from major hotel companies such as Wyndham Hotels & Resorts. The 150-room Residence Inn is in Atlanta's upscale Buckhead neighborhood near shopping and dining outlets, such as Lenox Square Mall and Phipps Plaza, according to Hunter. Also, the hotel is across from AT&T corporate offices. "We are thrilled that the stars aligned on this acquisition - a smooth process with a highly professional seller, another collaboration with a trusted equity partner, and a further expansion of our relationship with Marriott," said D.J. Rama, CEO of Auro Hotels. "With the expertise brought by our investment, operations and design and construction resources, we believe strongly in the property's future performance potential."