Third-quarter demand and revenue per available room reached record highs for the U.S. extended-stay hotel sector, while occupancy fell for the first time since 2020, according to a new report from The Highland Group.
Third-quarter U.S. extended stay RevPAR increased 11.9 percent year over year to $92.60—the smallest such gain since Q1 2021—and rose about 9 percent compared with 2019, according to the report. Economy extended-stay RevPAR increased 3.5 percent to $45.74, while upscale RevPAR rose 14.2 percent to $121.31. The midscale tier increased to $84.59, up 11.2 percent year over year.
Average third-quarter daily rates followed in a similar vein for the U.S. extended-stay sector, with a 12.2 percent increase year over year. Upscale ADR rose 11.9 percent to $153.80; midscale ADR climbed 12.1 percent year over year to $108.52; and economy increased 8.1 percent year over year to $57.33.
As for occupancy, overall third-quarter U.S. extended-stay occupancy decreased 0.2 percent year over year to 78.7 percent. The economy and midscale tiers decreased by 4.2 percent (to 79.8 percent) and 0.7 percent (to 78 percent), respectively. Upscale was the only tier to see an increase, up 2.1 percent to 78.9 percent, but still is shy 0.8 percentage points of 2019 levels.
While occupancy declined in the economy tier for the second successive quarter, according to the Highland Group, it is the only tier with an occupancy rate above 2019 levels—up 2.3 percentage points.
“Expect more new extended-stay hotel performance records during the near term, but further deceleration in average rate growth,” Highland Group partner Mark Skinner said in a statement.
When it comes to inventory, supply was up 1.5 percent across the board in the third quarter, year over year. Demand was up 1.2 percent year over year.
RELATED: Highland Group Q2 extended-stay report