Extended stay hotels performed very well in March, with monthly demand recording the largest increase in four years and average daily rate (ADR) increasing the most in more than a year. March marked a five-month trend of accelerating extended stay demand growth, and Mark Skinner, partner at The Highland Group, said, “Decelerating supply growth and accelerating increases in demand bode well for extended stay hotel RevPAR to increase during the foreseeable future.” 

Extended stay supply contracted as demand recorded its largest monthly gain in four years, said the report, resulting in occupancy growth for the second consecutive month. Following a fractional gain in February, extended stay ADR posted its largest monthly occupancy increase in more than one year.

Extended stay hotel ADR’s 1.6% gain in March was the first positive monthly change since March 2025. Economy was the only extended stay hotel segment reporting an ADR contraction in March, but the 0.3% decline compares favorably with the 2.2% loss for total economy class hotels as reported by STR/CoStar.

March’s strong performance coincided with a greater rebound in the overall hotel industry, according to the report. The monthly RevPAR gain for all upscale hotels was larger than for upscale extended stay hotels, but economy and mid-price extended stay hotels bettered corresponding classes of all hotels.

Extended stay hotels’ 3.2% RevPAR increase in March was the second successive positive monthly change since March of last year and the largest increase since October 2024.