U.S. Extended-Stay Q2 Rates Rise, While Occupancy Sees a Dip
U.S. extended-stay hotels’ revenue per available room and average daily rate in the first half of 2023 again increased year over year, though occupancy slipped in the second quarter, according to a new report from The Highland Group.
In Q2, overall U.S. extended-stay RevPAR was $94.03, up 3.2 percent year over year and 113 percent “of its 2019 value” which is approximately “two points ahead of the overall hotel industry’s recovery index, according to STR,” according to Highland.
Second-quarter upscale extended-stay RevPAR increased 5.5 percent year over year to $124.45, while midscale rose 2.9 percent to $86.41. The only extended-stay sector in which RevPAR fell year over year was economy, down 2.8 percent to $45.01 in the second quarter.
Q2 U.S. extended-stay hotel ADR rose 4.4 percent year over year to $121.47—the highest yet on Highland’s scale, dating to 2016. Upscale ADR increased 5 percent year over year to $159.82, and midscale increased 3.6 percent to $111.64. Economy ADR increased 2.9 percent to $58.88.
Overall, extended-stay RevPAR and ADR both seem to be flattening to 2017 and 2018 levels, according to the report.
Second-quarter extended-stay occupancy, however, paid the price, according to Highland, and decreased 1.2 percentage points year over year to 77.4 percent—the lowest since 77.5 percent in 2021. Upscale was the only extended-stay sector in which occupancy increased year over year in Q2, up 0.4 percent to 77.9 percent. Midscale occupancy declined 0.7 percent to 77.4 percent, while economy fell 5.6 percent to 76.4 percent.
With that said, U.S. extended stay’s “occupancy premium above all hotels remained within its long-term average range,” according to the report.
Revenue across the extended-stay board increased in Q2, according to the report.
“Although room revenue growth in decelerating following the rebound from the pandemic, it is still well above inflation year to date with the mid-price segment reporting the strongest gain in Q2 2023,” according to Highland.
Overall revenue increased 5 percent year over year, with midscale up 6.2 percent year over year. Upscale followed with a 4.9 percent increased, and economy climbed 0.8 percent.
Angelique Platas www.businesstravelnews.com