Mark Skinner, partner, said that RevPAR and room revenue increases at extended-stay hotels with higher room rates were very good in December, but rate resistance is still evident at lower price points.
Average daily rate (ADR) growth is still high compared with long-term averages, but with the economy segment reporting its ninth consecutive monthly decline in demand, four consecutive months of occupancy contraction in both economy and mid-price segments and slower ADR growth at lower-priced brands, rate resistance is evident at the lower end of extended-stay hotels.
Monthly revenue growth rates for the overall hotel industry have exceeded those of extended-stay hotels since midyear 2022 as the overall industry caught up from much larger revenue declines during the previous two years, but the gap generally narrowed through the second half of the year. December, however, was the first month since the pandemic recovery started in which extended-stay hotel revenue growth (12%) exceeded the gain (9.3%) STR reported for all hotels.
