Extended-Stay Occupancy Stays Near Record High Despite Signs of Cyclical Slowdown

ATLANTA—In the third quarter of 2018, extended-stay hotel supply and demand posted their slowest quarterly increases in two years, according to The Highland Group’s “2018 Third Quarter U.S. Extended-Stay Lodging Market Report.”

Room revenue growth was the slowest in five years and the 1.7% gain in RevPAR was the least in eight years. Despite the deceleration in performance metrics, Q3 average occupancy stayed above 80% for the fifth straight year.

Part of the reason for the slowdown in operating performance growth was the hurricane related boost in Q3 2017.

“The even stronger revenue lift in the fourth quarter 2017 could exert downward pressure on comparisons with Q4 2018 and lower growth for the calendar year 2018. Much will depend on the revenue boosts from Hurricanes Florence and Michael in 2018,” said Mark Skinner, partner at The Highland Group.

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