The correlation between total extended-stay and all US hotel revenue per available room (RevPAR) levels has returned to its 2019 nominal values, according to the U.S. First Quarter Extended Stay Hotels Report from The Highland Group, a consultancy.

From 2019 to 2023, economy and mid-price extended-stay hotels made considerable gains in RevPAR relative to corresponding classes of all hotels. Largely because of a comparatively high concentration of rooms in urban markets, upscale extended-stay hotels have seen RevPAR decline slightly relative to all upscale class hotels. However, the gap is expected to narrow as urban markets make a full recovery.

Because of limited growth and assuming the overall hotel industry does not endure a correction, according to the report, extended-stay hotels should set more new performance records during the near term at least.

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First quarter highlights for extended-stay hotels included:
Mid-price occupancy the highest since 2001;
Economy segment occupancy the lowest in 13 years;
Smallest supply growth in a decade;
Average daily rate (ADR) up 11% over the first quarter of 2022;
Room revenues up 14% over last year;
Average occupancy 13 points higher than all hotels.

Image: Courtesy of Marriott