Report: Q4 Continued Boom Time for U.S. Extended-Stay

The U.S. extended-stay lodging sector set more than a dozen performance records in the fourth quarter of 2021, according to the Highland Group, with hotels notching double-digit percentage gains year over year in key metrics.

Total fourth-quarter revenue for the segment increased by 50.9 percent year over year to nearly $3.9 billion. Occupancy increased 15.7 percent to 72.8 percent, average daily rate was up 25.7 percent to $103.26 and revenue per available room spiked 45 percent to $75.16, compared to the fourth quarter of 2020.

Compared to What?

Some may consider 2020 too easy a comparison—like shooting fish in a barrel. The Highland Group partner Mark Skinner in a statement acknowledged, “Comparisons with 2021 data will make new performance records harder to achieve in 2022 than in 2021, which was compared to 2020.”

But 2021’s fourth-quarter numbers also stack up well to the same quarter in 2019. RevPAR edged out the fourth-quarter 2019 figure of $74.04 by about 2 percent and ADR at beat 2019’s Q4 figure of $101.39 by a similar margin. Fourth-quarter 2021 occupancy rate percent was just shy of 2019’s 73 percent.

Several hotel companies are lauding their own extended stay results and doubling down on development in the category. A Red Roof spokesperson told BTN its extended stay brand HomeTowne Studios achieved a 22.6 percent ADR increase for full year 2021. Home2 Suites is among Hilton’s fastest-growing brands with 437 properties in development in the United States. In 2021, extended stay accounted for 37 percent of Marriott’s room signings in the U.S. and Canada.

At the same time, investment groups are grabbing extended stay inventory. Blackstone Real Estate Partners and Starwood Capital Group last year bought the Extended Stay America brand, and the same group just threw down $1.5 billion to acquire 111 WoodSpring Suites properties from Brookfield Asset Management, the Wall Street Journalreported last month. WoodSpring is Choice Hotels’ extended-stay brand.

Terri Hardin  www.businesstravelnews.com