“An Perception on Prolonged Inns”

In a bad global economy during the COVID-19, it was a challenging time for the various hotel companies. One segment that surpasses the rest of the hospitality industry is long-stay hotels. They usually have larger rooms with well-equipped kitchens and are inexpensive for budget-conscious guests. They provide long-term housing for people who need to stay; for a week, a month, six months, several years or longer, e.g. B. Business people on long trips, families on long vacations and / or people looking for more permanent accommodation. This means that these hotels can almost count on being profitable and stable in the market despite the unstable conditions of the global economy. The longer stay is recovering despite the pandemic crisis and has reached a record high in recent years.

So … what are advanced hotels?

Long-stay hotels are also known as long-stay hotels (sometimes referred to as apartment hotels or serviced apartments). Due to the longer period, hotels often offer discounted rates for long-term stays. In addition, they have all the necessary amenities such as self-service laundry and kitchens in the suite. As in traditional hotels, long-stay hotels vary in price and style. Some offer apartment or studio-style living, while luxury options have multiple bedrooms, more space, and special amenities like private patios. Some of the extended stay hotel brands include TownePlace Suites, Candlewood Suites, Hawthorn Suites by Wyndham, and many more. Home2 Suites by Hilton was named the Top Rated Extended Stay Hotel Brand in the United States in 2018.

Home2 Suites by Hilton North Conway –
Photo: Farazad Group Ltd.

Let’s get to the statistics …

According to a study by Savills in September 2020, the largest global operators have shown that long-stay properties have outperformed their other hotel sectors. The following result shows the efficiency advantages in the area of ​​long-term stays.

IHG reported a 46% decrease in revenue per room available (RevPAR) for its extended stay brand – Staybridge Suites – VS – a decrease of 59% for all brands in EMEA and Asia.

Hilton reported a 41% decrease in RevPAR for its extended stay brands – Homewood Suites and Home2 Suites – VS, a decrease of 54% for all brands worldwide.

Marriott reported a 46% RevPAR decrease for its Residence Inn brand, down from 59% for all brands (North America only).

HVS studies show that Q2 2020 performance statistics of brands are reported by public companies In the early months of the pandemic, longer-stay brands reflect the resilience of the economy.

Photo: Farazad Group Ltd.

As can be seen from the tables above, In the economy, long-stay brands had the least impact, although they still fell 13% on average. On the flip side, luxury brand occupancy rates saw an unprecedented drop of 67% on average. In addition, economy hotels, extended stay hotels, and limited-service hotels were less affected by business travel, corporate group cancellations, group size restrictions and convention center closings.

Marriott International’s results for the second quarter of 2020 showed that the Residence Inn had the highest occupancy of all brands at around 40%, outperforming the 18% at the Courtyard and 8% at the Ritz-Carlton. Remarkable, The stocks of the real estate investment trust Extended Stay America are up 90% since mid-March, outperforming stocks in other hotel segments. In an investor presentation in June, the company reported that 84% of guests who stayed in their homes used the kitchen. Researchers say that in an environment where people are trying to create social distance due to Covid-19, guests are more likely to cook at home.

Photo: Farazad Group Ltd.

The pandemic poses major challenges for the hotel industry. Guests are not ready to travel. Despite the lifting of travel restrictions, the travel level is not nearly as high as it was before COVID. This has put a lot of pressure on hotel companies. Morris studies in February 2021 showed that “revenue per available hotel room fell 50% between 2019 and 2020 and about 25% of all hotels in the country are at risk of foreclosure”.

“In May, luxury hotels were occupying 15% of capacity compared to economy hotels at 40%. These numbers suggest that the customers that economy hotels rely on, such as truck drivers and extended-stay guests, are still Hotels, however, are not widely used by tourists. And these numbers indicate that the luxury hotel industry may take longer to fully recover. We don’t know when tourism and hospitality will fully recover. And some properties will never recover Income losses. If the current downturn continues through 2023, many more hotels will be pushed out of business, a trend that could be particularly common among luxury hotels. “

Overall, the expanded hotel outperforms other hotel segments, particularly the luxury industry. The key element here, however, is the recovery in guest demand. As a result, PWC expected the industry to recover in the second half of 2021.