Extended stay room supply increased 2.2% in the 100 largest Metropolitan Statistical Areas (MSAs) in the US, according to a report from The Highland Group, a consultancy. More than 19,000 extended stay rooms were reported as under construction at the end of 2023; however, the net change in rooms open by the end of 2024 was less than 10,000, reflecting the lengthening hotel development timeline, disenfranchising hotels that no longer meet brand standards, conversions to apartments and some municipalities acquiring extended stay hotels for housing.

Extended stay hotel rooms reportedly under construction in the 100 largest MSAs increased more than 50% over the last 12 months. However, the near-term risk of over supply across the 100 largest MSAs is very low, according to the report. Although five MSAs reported lower revenue per available room (RevPAR) in 2024 compared with its nominal value in 2019, the recovery from the pandemic is a distant memory in most markets, according to the report.

Nineteen MSAs have seen RevPAR growth of 40% or more since 2021 and only four reported a decline. Nationally, RevPAR increased 1% in 2024 compared with 2023 but 25 MSAs recorded a gain of 5% or more.

Like the last two years, some markets hardest hit by the pandemic — including San Jose, New York, Chicago and Seattle — reported among the strongest gains in RevPAR in 2024. Forty-four MSAs reported lower RevPAR in 2024 over 2023 and occupancy loss was the dominant factor in most cases.

Image: Marriott