The U.S. extended-stay hotel occupancy level in the fourth quarter of 2023 was 71.5 percent, the lowest fourth-quarter non-pandemic figure since 2013, according to a new report from The Highland Group, released Friday.
Meanwhile, the segment's fourth-quarter average daily rate increased 2.1 percent year over year to $116.31, and revenue per available room increased 1 percent to $83.18. That's the smallest Q4 RevPAR growth since 2019, according to Highland.
Occupancy decreased year over year for the third consecutive quarter, according to Highland, and declined in each of the three tiers the company tracks: upscale, midprice and economy. Fourth-quarter occupancy last was lower than 71.5 percent in 2013, when it was 71.1 percent, excepting 2020, when it was 62.9 percent.
The lower occupancy comes amid growth in supply, with available fourth-quarter rooms up 2.3 percent year over year to about 53.4 million, a net gain in rooms that was the lowest since 2013, according to Highland.
"With interest rates and constructions costs likely to remain relatively high, the risk of extended-stay hotel over supply nationally is very low in the near term, despite the launch of several new brands," Highland partner Mark Skinner said in a statement.
Fourth-quarter ADR increased more sharply in the upper extended-stay tiers, with upscale up 2.7 percent to $153.81 and midprice up 3.6 percent to $107.40.