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EXTENDED-STAY HOTEL room supply in the 100 largest metropolitan statistical areas in the U.S. grew 2.5 percent in 2022 compared to 2021, its smallest increase in several years, according to a new report from The Highland Group. The survey, which researched supply, demand, revenues and new construction of extended-stay hotels, said the outcome in 2022 was about half the net supply gain reported in 2021. According to the report, the lengthening hotel development timeline, fewer construction starts, disenfranchising hotels that no longer meet brand standards, conversions to apartments and some municipalities acquiring extended-stay hotels for housing have resulted in the muted growth. While there was a sharp decline in reported extended-stay rooms under construction last year compared to 2021, construction starts increased 6 percent over the last 12 months. "However, they remain low compared to the pre-pandemic period, the report noted. RevPAR growth in 2022 strongly favored ADR as opposed to occupancy gains in 2021. "Consequently, more than 40 MSAs reported lower average occupancy in 2022 than during the previous year. However, only a dozen MSAs have not yet recovered RevPAR back to its nominal 2019 value compared to about half the MSAs last year," it showed.

BOUTIQUE HOTELS GENERATED more annual RevPAR than traditional hotels in the U.S. last year, according to a report from consulting agency The Highland Group. Hotels focused on experiential stay, exceptional design and amenities also attracted a rate premium, the report said. Boutique hotels are classified into independent boutique, lifestyle hotels and soft brand collections. The Boutique Hotel Report 2022 has said that upper midscale, upscale and luxury soft brand collections recovered strongly in 2021 in performance metrics against their US upscale counterparts, while the upper upscale class was ahead in rate recovery and lagged in occupancy. According to the report, lifestyle upper upscale and luxury hotels recovered at parity with their counterparts, while upper midscale and upscale lifestyle hotels reported slower recovery in both occupancy and average rate. "Upper midscale and upscale independent boutique hotels in urban locations recovered at a stronger pace than all U.S. hotel in urban locations in both performance metrics.