Extended stay hotels saw the highest-demand growth in almost four years in February, lifting RevPAR and occupancy to positive change for the first time in 11 and 14 months respectively, according to the latest report from The Highland Group, a consultancy. February marked a four-month trend of accelerating extended-stay demand growth, which, if continued, should lead to stronger RevPAR gains during the foreseeable future, according to the report.
Mark Skinner, partner at The Highland Group, said, “Economy extended stay hotel RevPAR declined again in February, but the fall was less than all economy class hotels reported, and recent trends indicate it should turn positive in the next one to two months.”
Total monthly extended stay average daily rate (ADR) was unchanged in February after declining each month starting in April of last year. February’s strong performance coincided with a greater rebound in the hotel industry overall. Monthly RevPAR gains for all mid-price and upscale hotels were larger than corresponding classes of extended stay hotels. Although economy extended stay hotel RevPAR declined again in February, the fall was less than for all economy class hotels.
Extended stay hotel demand growth in February exceeded the 5% long-term average increase for the first time in 14 months, and it was the largest monthly gain since March 2022. Comparatively, STR/CoStar reported that aggregate comparable class hotel demand increased 3.3% in February. Furthermore, all three extended stay hotel segments reported higher demand growth in February compared with corresponding classes of all hotels.
The 0.8% increase in extended stay hotel occupancy in February was the first positive monthly change since December 2024. Extended stay hotel occupancy in February was 14.4 percentage points higher than the average for comparable class hotels. The occupancy increase for economy extended stay hotels in February was the segment’s second consecutive monthly gain.
Extended stay hotel ADR in February was unchanged compared with February 2025, following declines for 10 successive months. Economy was the only extended stay hotel segment reporting an ADR contraction in February, but it compares favorably to the 3.3% loss for total economy class hotels as reported by STR/CoStar.
Extended stay hotels’ 0.9% RevPAR increase in February was the first positive monthly change since March of last year.
