Good News for Extended-Stay Segment

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As the rest of the hotel industry continues to sink into a deeper recession, Smith Travel Research recently released a report showing the extended-stay segment was holding its own. Nationwide through November, it had a 9.2-percent growth in room supply, versus 2.6 for the entire industry. Occupancy grew 3.5 percent and fell 1.5 percent industry-wide.

The extended-stay segment even had positive demand growth in September, October and November when the rest of the industry slumped badly. Upscale extended-stay hotels were the primary reason, outpacing their midscale and economy counterparts. The logic for that, STR contends, is leisure travelers are recognizing the value and convenience of the extended-stay segment, usually with complimentary breakfasts and light dinner and larger rooms with kitchens, all potentially perfect for a lesser expensive vacation.

That makes sense and I would think the trend continues, but a cause for concern will be if supply growth continues to outpace demand. Negative occupancy numbers (year vs. year) loom, but the extended-stay segment ought to continue to hold up better than the rest of the industry.

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