Smith Travel: Demand, Supply Grew For Extended-Stay Hotels

While extended-stay hotels have taken a hit during the economic downturn, they continued to see demand growth in the closing months of 2008 even as the rest of the lodging industry saw demand declines, according to a research article published this week by Smith Travel Research.

U.S. extended-stay hotel year-over-year demand growth dropped steadily as the year closed, with growth at 3.8 percent in September, 2.6 percent in October and 0.6 percent in November, according to Smith Travel Research. Upscale extended-stay brands drove most of the segment's demand growth, the firm reported. The U.S. lodging industry overall, however, saw demand decline by 3.2 percent in September, 3.8 percent in October and 7.8 percent in November.

The extended-stay tiers also are outpacing the industry as a whole in supply growth, according to Smith Travel Research. Extended-stay property supply grew by 9.2 percent from January through November of 2008, while the U.S. hotel industry had a 2.6 percent growth rate.

"Most major hotel companies offer at least one extended-stay brand, and if year-to-date 2008 room-supply growth is any indication, many hotel developers feel that the segment has a promising future," STR industry research manager Chad Church wrote in the article.