Industry Update
Press Release29 July 2021

Extended-Stay Hotels Have Weathered The COVID-19 Pandemic

Lower-Tier Segment Has Outperformed Other Hotel Types During Recovery

share this article
1 min
Str bis

While no hotel escaped unscathed from the COVID-19 pandemic, extended-stay hotels reported some of the highest occupancies over the course of 2020.

Advertisements

The additional space and kitchen facilities offered by the segment, as well as the budget-friendly price points of most brands, made extended-stay hotels popular with key workers, displaced locals and essential travelers.

While extended stay hotel occupancy dipped in January 2021 amid a second wave of COVID-19 and a slow start to the U.S. vaccination rollout, the segment maintained its occupancy premium over other types of hotels, averaging occupancy 20 points higher than non-extended stay hotels.

In recent weeks, the resurgence of summer leisure travel has narrowed the gap, and while extended-stay hotel occupancy retained the top spot, recording 82.6% occupancy for the week ending July 17, the gap between extended-stay and non-extended-stay hotel occupancy narrowed to only 13 points.

While demand for the segment appears sky-high, average daily rate (ADR) for extended stay hotels has not kept pace. Extended-stay hotel ADR reached $139 for the week ending July 17, its highest level year to date and more than 95% of its 2019 level.

However, despite their lower occupancy, non-extended-stay hotels have reported rates above 2019 levels for each of the last four weeks.

The class makeup that gave extended-stay hotels an occupancy advantage may now be working against them: While mid- to low-tier hotel rates have improved over the course of the year, it’s the luxury segment that has had the most success in regaining ADR.

Non-extended-stay hotels’ pricing power gave them an edge, pushing both revenue per available room and RevPAR index ahead of extended-stay hotels for three of the past five weeks.

The race to the top has served both hotel segments well, with both segments reporting RevPAR more than 90% of the way to its 2019 level for the past four weeks and proving that driving occupancy or ADR can return RevPAR to pre-pandemic highs.

Kelsey Fenerty is a research analyst at STR.

This article represents an interpretation of data collected by STR, CoStar's hospitality analytics firm. Please feel free to contact an editor with any questions or concerns.

About STR

STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.

Contact
Annie Gaffron
Director, Marketing Operations – STR
Phone: +1 (615) 824 8664 x3403
Send email
Latest News
Advertisements