Higher margins drive extended stay

Revenue from extended-stay hotels has more than quadrupled since 1998, according to Mark Skinner, partner with The Highland Group, who cited the number to introduce a panel at the Serviced Apartment Summit Americas titled “Why are extended-stay hotels doing so well and where do they go from here?”

The success of the segment continued in 2017 with a 12.8% rate increase, the fastest since 2009, Skinner said. He also said the number of extended-stay rooms is growing four times as fast as regular hotel rooms in response to accelerating demand. He called that acceleration “contrary to what’s typical at this stage of the cycle.”  Today, 8% of total U.S. hotel rooms are extended-stay, and they represent $12.4 billion in room revenue in 2017.