Demand for extended stay hotels in the first quarter of this year was up 5.4% year over year, the largest quarterly increase since 2022, according to a new report by The Highland Group. Demand also increased year over year and hit record highs across all three service tiers: 3.2% in upscale, 7% in mid-price and 6.4% in economy.
According to the report, “Generally in line with the broader hotel industry, the end of Q1 2026 marked a five-month trend of accelerating extended-stay demand.”
In other highlights of the report:
- Occupancy in the quarter rose 0.7 percentage points year over year to 71.3%. Occupancy increased across all three service tiers: 0.8 percentage points in upscale, 0.5 percentage points in mid-price, 1.1 percentage points in economy.
- Revenue per available room (RevPAR) was up 1.1% to $84.69, breaking a three-quarter streak of RevPAR declines. First-quarter average daily rate increased 0.4% year over year to $118.71, and only the economy tier recorded a rate decline, down 2% to $58.45.
- Supply, as measured by total room nights available, increased 4.6% year over year to 57.2 million. Supply also grew across all three service tiers: 2.4% for upscale, 6.4% for mid-price and 5.3% for economy.
- Supply in future quarters is expected to “continue to plateau or tick down as extended stay rooms under construction have been falling and relatively high interest rates are likely to continue during the foreseeable future,” according to the report.
