Occupancy at extended-stay hotels in Janaury was at its highest level (72%) in at least four years, according to the latest report from The Highland group, a consultancy. The number beat January 2019 by five percentage points and was 19 points above the 53% occupancy for the overall hotel industry in January, as reported by STR.

Higher-priced extended-stay hotels led the gains in occupancy, as most lower-rated properties experienced occupancy declines following months of some of the strongest increases in room rates ever reported.

Mark Skinner, partner at The Highland Group, said that consistent with the overall hotel industry, lower-priced extended-stay hotels continued to report markedly lower RevPAR (revenue per available room} gains than higher-rated properties in January 2023.

Business Travel News Promo

The upscale segment, which accounts for 40% of total extended-stay room supply and lagged the post-pandemic recovery, continues to post the strongest gains in performance metrics. Accordingly, the segment is influencing total extended-stay increases, which are significantly weaker at lower price points.

Mid-price and upscale extended-stay hotel demand increases were stronger than corresponding classes of all hotels in January. However, economy extended-stay hotels reported their tenth consecutive month of declining demand. Although the contraction was less than in November and December 2022, it was greater than the 3% decline STR reported for all economy hotels in January. Image: Courtesy of Marriott