Report: U.S. Ext.-Keep 2023 Charges Rise Amid Document-Low Provide Development

U.S. extended-stay resort out there room provide in 2023 elevated 1.8 p.c yr over yr, the bottom enhance on file, in response to a brand new report by The Highland Group. Common day by day charges in 2023 elevated yr over yr, permitting for income per out there room progress whilst occupancy declined.

The small enhance in U.S. extended-stay room provide in 2023 follows a equally modest enhance the yr prior. The final time such annual provide progress was lower than 2 p.c was in 2011 and 2012, in response to Highland Group accomplice Mark Skinner, when within the subsequent two years, progress remained beneath long-term averages. 

“We count on an identical sample will emerge over the subsequent two years on condition that rates of interest and development prices are a lot increased than they had been a decade in the past,” Skinner stated within the report.

A lot of the 2023 enhance in provide fell within the financial system extended-stay tier, the place the room rely elevated 6.6 p.c yr over yr, whereas midprice provide elevated 1.5 p.c and upscale provide held regular.

The U.S. extended-stay pipeline, nevertheless, is beginning to present some signal of a rebound. Rooms underneath development in 2023 elevated 53 p.c, bringing it to a stage seen in 2020 after sharp declines in 2021 and 2022.

A number of resort corporations previously 18 months have introduced the event of latest extended-stay manufacturers, together with Hilton Worldwide, Marriott Worldwide, Hyatt Inns Corp. and Greatest Western dad or mum BWH Resort Group.  

Nonetheless, “the near-term danger of extended-stay resort over provide may be very low nationally … and loads of extra extended-stay demand stays,” Skinner stated in an announcement. That ought to enable extended-stay hoteliers to take care of a stage of pricing energy after one other yr of fee will increase in 2023.

General U.S. extended-stay resort ADR elevated 4.7 p.c yr over yr to $118.80, with upscale ADR up 5.4 p.c to $156.43. General occupancy declined 0.4 p.c to 74.9 p.c, though within the upscale tier it elevated 1.2 p.c to 75.7 p.c.

The speed positive aspects fueled a 2023 RevPAR elevated 4.7 p.c yr over yr to $88.98. Skinner famous that RevPAR enhance outpaced that of the broader resort trade, and given projections of year-over-year progress in resort RevPAR of 3 p.c to five p.c in 2024, “we count on that to proceed for the foreseeable future.”