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.