Strong Extended-Stay Demand Keeps Occupancy Above 80%

NATIONAL REPORT—Extended-stay hotel demand growth almost matched the change in supply in the third quarter 2016. For the year-to-date, strong demand growth has kept extended-stay hotel occupancy above its long-term average despite record levels of 20,000 new rooms under construction.

The increase in supply has resulted in some occupancy loss but strong ADR growth kept the quarterly change in RevPar positive at 3.4%.

“Extended-stay occupancy should finish 2016 above its long-term average of 73.8%. This will be very welcome as we move into 2017 because the growth in extended-stay supply and slowing ADR gains in the overall hotel industry are making it more difficult to increase ADR and that is the only way to grow RevPar at this stage of the cycle,” says Mark Skinner, partner at The Highland Group.