Extended stay hotels soften next slowdown

Leisure travel’s downward pull on segment is not strong

Extended stay hotels form a large share of the hospitality industry’s market for business travellers. They are expected to soften the blow of the anticipated coming slowdown in the rate of RevPAR increases. Research firm STR Global predicts that although extended stay properties and the hospitality industry overall follow similar revenue cycles, projections show that the extended-stay segment will see better growth in demand than the rest of the hotel industry in 2012 – just as it has done consistently over the last decade.
Leisure travel is slowing faster than business travel and overall hotel industry forecasts are being revised downward as a consequence. In the US, leisure travellers account for only 28% of extended stay hotel room nights. Therefore leisure travel’s downward pull on the extended stay segment is less significant.
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[pictured: Staybridge Suites; courtesy IHG]