Revenue per available room for every segment of the U.S.
extended-stay hotel sector in the second quarter recovered to 2019 levels for
the first time since the onset of the Covid-19 pandemic, according to a new
report from The Highland Group. Meanwhile, the rate of extended-stay supply
growth has dwindled and the number of rooms under construction has dropped
sharply.
Second-quarter U.S. extended-stay RevPAR increased 24.3
percent year over year to $91.12, compared with $83.32 in 2019. Upscale
extended-stay RevPAR for the first time since the pandemic reached 2019 levels,
at $117.99 from $117.25 three years ago.
Extended-stay occupancy hasn't quite recovered to 2019
levels. In the second quarter, it was 78.3 percent—up 1.1 percent year over
year—versus 78.5 percent in 2019. Average daily rates, however are higher, at $116.35
compared with $106.12 in 2019.
While extended-stay properties during the pandemic reported
stronger comparative occupancy and revenue levels than did hotels, "the
overall hotel industry recovery caught up with extended-stay hotels in Q2 after
lagging for 18 months," according to Highland.
Available extended-stay room nights in the second quarter
increased 2.4 percent year over year to about 101.8 million, and supply in each
segment—economy, midprice and upscale—increased by similar percentages. Rooms
under construction, however, declined 34.3 percent year over year, with the
upscale tier most affected. Highland noted that "supply growth forecasts
through 2025 are the lowest for several years."
"The foreseeable outlook for extended-stay hotels is
very good, because the last time extended-stay hotel supply growth declined
below 3 percent it stayed there for four years and RevPAR grew 47 percent over
the same period,” The Highland Group partner Mark Skinner said in a statement.
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