The U.S. extended-stay lodging tier reported improved third-quarter results compared with record lows of the second quarter, according to a report released Wednesday by The Highland Group. Occupancy rebounded from 50.2 percent as of June 30 to 65.8 percent as of Sept. 30, a 17.2 percent year-over-year decline. Third-quarter economy segment occupancy dipped just 0.8 percent year over year, while upscale dropped 28.7 percent.
"Occupancy is now higher than during the low points in 2009 and is rapidly approaching parity with quarterly occupancy during the last recession," according to the report. And while not a direct comparison, the sector continues to report stronger overall results than those posted by the U.S. lodging industry as a whole.
Extended-stay room supply grew 6.7 percent year over year during the third quarter to 490,820, as new hotels opened and existing hotels re-opened, according to the report. The year-to-date supply growth was 6 percent to 1,413,170 room nights available.
Quarterly demand, however, was down 12.5 percent year over year, with the upscale extended-stay segment reporting a decline of 24.7 percent. Only the economy segment showed growth at 1.8 percent. Upscale also dragged down quarterly room revenues: the segment declined 42.1 percent year over year, while economy slipped just 1.4 percent, and U.S. extended stay room revenue as a whole declined 30.7 percent. In absolute numbers, room revenue was $2.71 billion, the lowest since 2014, when they were $2.4 billion.
Third-quarter revenue per available room declined 35 percent year over year, compared with a 55.6 percent drop the prior quarter. The year-to-date RevPAR decline was nearly even with that of the third quarter, at 36.4 percent.
Average daily rate also was depressed. It dropped 21.5 percent year over year for the quarter to $83.77, an improvement over the 29.4 percent second-quarter decline to $75.48. Year-to-date ADR was down 18.6 percent to $85.75.
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