The extended-stay pipeline is heating up

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Extended-stay hotels continue to be a hot topic in the hotel industry and rightfully so. Over the last six years, this segment of the hotel industry has grown substantially and isn’t showing any signs of slowing down. In 2022 alone, three new extended-stay brands were announced: Extended Stay America Premier Suites, ECHO Suites by Wyndham and Home by BWH. Since 2017, nine new extended-stay brands have launched.

 

 

From Q3 ’21 to Q3 ’22, the extended stay new construction pipeline grew 26% Year-Over-Year (YOY) by rooms. At the end of Q3 ’22, 1,855 projects/190,405 rooms in the U.S. Construction Pipeline are extended-stay projects, accounting for 35% of projects and 30% of the rooms in the total U.S. pipeline.

Extended-stay projects under construction, at the end of Q3 ’22, accounted for 264 projects/28,286 rooms, up slightly YOY. Projects scheduled to start construction in the next 12 months (SN12), ended Q3, with 818 projects/86,240 rooms, up 43% by projects and 48% by rooms YOY. Projects in the early planning phase, at the end of Q3, accounted for 773 projects/75,879 rooms of the extended-stay pipeline, up 23% by projects and 17% by rooms. In Q3 2017, projects in the early planning phase stood at 248 projects/23,683 rooms.

“Middle-tier” extended-stay brands account for 60% of the projects and 55% of the rooms in the extended-stay pipeline. “Upper-tier” brands follow and account for 31% of the projects and 35% of the rooms in the extended-stay pipeline. The “lower-tier” or economy segment comprises 9% of the projects and 10% of the rooms in the extended-stay pipeline. This is seemingly a segment that has room for growth in the future.

Home2 Suites by Hilton, a “middle-tier” extended-stay brand, currently has the largest new construction pipeline of all brands in the U.S., with 494 projects/50,809 rooms. YOY this brand has grown 23% by projects and 21% by rooms.

Other extended-stay brands with large pipelines at the end of Q3 2022 include Marriott’s TownePlace Suites with 291 projects/27,329 rooms, followed by its Residence Inn brand with 234 projects/28,659 rooms. IHG’s Staybridge Suites follows with 125 projects/12,962 rooms, then Choice’s WoodSpring Suites with 121 projects/14,562 rooms, Homewood Suites by Hilton with 102 projects/11,915 rooms and IHG’s Candlewood Suites with 101 projects/8,240 rooms. All of these brands YOY have increased project and room counts.

The hotel construction pipeline for extended-stay brands is robust and will continue to be for the next several years as developer interest in this segment of the lodging industry continues.

Lodging Econometrics (LE) is tracking all extended-stay and all other projects in the construction pipeline with start and open dates. We also have current supply information and forecasts for the next three years. To learn how LE can help you optimize your strategic plans, please contact us: 603-431-8740, ext. 0025 or [email protected]