It may have taken a pandemic to really wake the lodging market, but finally, investors, developers, and hoteliers, along with their consumers, are realizing the beauty of the extended-stay concept. According to Matt McElhare, Senior Director, Extended Stay Brands at Choice Hotels International, the extended-stay hotel segment has always been a constant player in the brand mix of hotel companies, accounting for 10 percent of overall lodging supply and 20 percent demand for extended stays of a week or more.
The decision for Choice to grow in that direction was an easy one, especially as the segment is likely to grow even more due to an increase in blue- and gray-collar business travelers, remote workers, and “bleisure” travelers. McElhare remarked, “As it is now, the segment is under-built, so you’re talking about a 2-to-1 supply demand imbalance that should support a lot of continued growth in the space, particularly at the lower price points, which is where our brands are positioned.”
During the first nine months of 2023, Choice’s extended-stay hotel openings grew by 38 percent, compared to the same period in 2022, and its extended-stay domestic pipeline increased 12 percent year over year to more than 47,000 rooms in the third quarter of this year. Choice currently has 60 Everhome Suites properties in the pipeline and over 250 across three other extended-stay brands: MainStay Suites, Suburban Studios, and WoodSpring Suites.
McElhare said there’s nothing new about the demand for extended-stay lodgings, which has always been needed for “non-discretionary guests who can’t do their jobs via Zoom.” He also noted that others have gravitated to extended stay during and since the pandemic because it provides more space, a kitchen, and a place to do laundry, along with greater comfort and flexibility. This model enables guests to work remotely and extend business trips into so-called “bleisure” vacations.
McElhare also mentioned current economic trends and fiscal policy that suggest continued extended-stay demand growth, including the $1.2 trillion infrastructure bill and onshoring of industries fueled by the CHIPS Act.
