Most of the gain was attributed to average daily rate (ADR) growth, which saw the largest yearly increase on record. Other milestones achieved in 2022 include new highs for nominal value RevPAR (revenue per available room) levels for economy and mid-price extended stay hotels.
The upscale segment reached its highest ADR on record, but lagging occupancy recovery meant the segment was still slightly short of restoring RevPAR to its nominal 2019 value.
Extended stay hotel supply growth in 2022 dipped below 2% for the first time in a decade. The gain was less than the increase in demand, which lifted total extended stay average occupancy close to its level during the years preceding the pandemic.
Mark Skinner, partner, said much of the segment’s future performance will depend on the overall hotel industry with negative quarterly change in extended stay hotel RevPAR a distinct possibility, especially at lower price points in the first half of 2023. However, he added, the longer-term outlook for extended stay hotels “remains very favorable.”
Image: Courtesy of Marriott
