Fourth-quarter 2025 U.S extended-stay hotel supply growth increased by 5 percent year over year, and occupancy "consequently" dropped by 1.9 percent, according to a new report by The Highland Group.
The 5.1 percent increase in supply was " the first quarterly gain to exceed the long-term annual average increase since 2019," outside of the Covid-19 pandemic, according to Highland. "Consequently, except during 2020, extended-stay hotel average occupancy sunk to its lowest fourth-quarter level since 2013."
Total fourth-quarter extended-stay demand, measured by total room nights sold, increased 3.2 percent year over year, according to Highland. Room nights sold increased in all three service tiers: 1.2 percent in upscale, 4.5 percent in midprice and 4.2 percent in economy.
The occupancy rate, though, declined in all three tiers: down 1.2 percent in upscale, down 2.6 percent in midprice and down 1.4 percent in economy. The overall Q4 occupancy rate was 71.3 percent.
U.S. average daily rate declined 1.2 percent year over year to $116.08, the third straight quarterly decline, according to Highland. Revenue per available room declined 3 percent to $82.76.
"The moderation and distribution of extended-stay hotel supply growth, as well as the performance of the overall hotel industry, will be key factors in the timing of a return to positive change in total extended-stay hotel RevPAR," said Mark Skinner, partner at The Highland Group, in a statement accompanying the report.
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