Extended-Stay Hotels Report Monthly Demand Declines for First Time Since Pre-Pandemic
Highland Group research also shows rates now moving in sync with hotels overall >>
by: Harvey Chipkin
For the first time in more than two years, economy, mid-price and upscale extended-stay hotels all reported monthly declines in demand compared with the prior year, according to The Highland Group, a consultancy. Extended-stay hotel segments reported demand declines from 0.8% to 2.5% as rates increased faster than in corresponding classes of all hotels. This compares with STR reporting a 1.6% increase in overall hotel demand. Monthly increases in revenue per available room (RevPAR) were about the same for extended-stay hotels and the overall hotel industry in July. Mark Skinner, partner at the Highland Group, said the long-term trend of generally similar monthly changes in RevPAR between extended-stay hotels and the overall hotel industry has resumed for the first time since the pandemic began. Also, according to The Highland Group, mid-price and upscale extended-stay hotels continue to lead average daily rate (ADR) growth. The economy segment’s ADR recovery index with comparisons to 2019 contracted slightly in July compared with June, but mid-price and upscale segments both gained about 2%. For the fourth successive month, upscale extended-stay hotels more than fully regained ADR back to their nominal 2019 value.
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