Extended Stay America reported a 1.3 percent decline in
comparable systemwide revenue per available room for the third quarter, year over
year. It joined Choice
Hotels, Wyndham
Hotels and Resorts and InterContinental
Hotels Group with negative RevPAR results for the period compared to 2018.
In the third quarter, "we saw a continuation of the softness
the industry began experiencing in June, and in fact the decline accelerated in
September even after adjusting for the holiday shift," said ESA president
and CEO Jonathan Halkyard, adding that for the month of September alone, RevPAR
declined 2.7 percent. "We remain focused on driving demand from our core extended
stay guests, business travelers with stays ranging from a week to a couple of
months, which we believe is a bit more consistent than transient business."
The decline "was most pronounced in business transient
and mid-length extended stays from property walk-in visits and a decline in
global distribution business," said CFO Brian T. Nicholson. Looking to the
fourth quarter, ESA expects comparable systemwide RevPAR to decline in a range
from 4.5 percent to 2 percent. The full year 2019 RevPAR guidance has been
adjusted to anticipate a decline of between 1.75 percent and 1.25 percent.
Average daily rate declined 2 percent, to $67.87; it was
partially offset by a 0.7 percentage point increase in occupancy, to 80.8
percent. Net income declined 29.7 percent in the quarter year over year to
$53.2 million.
Nicholson also noted that ESA had paused its renovation
plans and is re-evaluating them. It wants to ensure guests are not confused on
what the differences are among the four tiers the company had introduced, so
ESA is looking to consolidate and simplify them.
The company plans to open a newly built property during the
fourth quarter, and nearly one per quarter through September 2020. ESA also
completed 12 hotel renovations in the first nine months of 2019 and expects to
complete four more in the fourth quarter.
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