Revenue per available room for the combined price tiers of U.S. extended-stay hotels in 2020 declined 33.4 percent year over year, according to the latest report from The Highland Group. Though not a direct comparison, RevPAR for the overall U.S. hotel industry in 2020 declined 47.5 percent, according to STR.
Similar to the trend in the overall U.S. hotel market, the economy extended-stay segment fared better than its midscale and upscale counterparts, with RevPAR dropping just 5.4 percent. RevPAR for the midscale tier was down 25.8 percent, and for upscale down 41.6 percent.
The economy tier's residential guests and construction industry-related demand coupled with little interaction between guests and hotel employees are key reasons the segment performed relatively well since the pandemic started, according to the report.
Extended-stay supply increased in 2020 by 3.9 percent year over year, while demand declined 15.8 percent. Overall extended-stay occupancy was down 18.9 percent, but only 3.1 percent for the economy tier and 14.8 percent for the midscale tier versus 29.7 percent for upscale extended-stay properties.
Average daily rate followed the same pattern: Overall extended-stay ADR in 2020 was dragged down 17.8 percent year over year by a 17 percent decline in upscale extended-stay ADR and a 13 percent drop in midscale extended-stay ADR. The economy tier ADR was down just 3.1 percent. The individual numbers are less than the aggregate because of a change in the distribution of rooms by price segment from 2019 to 2020, said Highland partner Mark Skinner.
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