Fourth-quarter average daily rate and occupancy at U.S. extended-stay hotels each increased year over year as demand surged and supply continued to grow, according to a new report by The Highland Group.
The fourth-quarter U.S. extended-stay ADR increased 1.4 percent year over year to $117.66, though Highland noted that figure falls short of the 2 percent increase reported by hotel analytics firm STR for the broader hotel industry.
Fourth-quarter extended-stay occupancy increased 1.5 percent year over year to 72.7 percent, the highest Q4 figure since 2021 and one that is about 12 percentage points higher than the broader hotel industry, according to Highland. Revenue per available room increased 3 percent to $85.52.
Noting that "extended-stay hotels had an exceptional fourth quarter," Highland in the report said year-over-year supply growth rates exceeded 3 percent for the fourth consecutive quarter. Still, that rate remains below the long-term average.
"With interest rates expected to stay relatively high during the near term and construction costs rising, extended-stay supply growth should be comparatively low nationally for the foreseeable future," according to Highland. "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."
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