U.S. extended-stay lodging continued its strongperformance in 2021, according to a report released Thursday by The HighlandGroup. Compiled with the assistance of STR, the report analyzed 100 metropolitanstatistical areas in the U.S. With few exceptions, however, the strongest recoverieswere in smaller markets, not often associated with traditional business travel.
The report showed only 10 percent of the MSAs achievingabove average RevPAR recovery in 2021 had 50,000 or more hotel rooms. Marketswith the highest 2021 RevPAR recovery over 2019 levels included Myrtle Beach,S.C., Baton Rouge, La. and Ogden, Utah, with 144.5 percent, 126.7 percent and122.1 percent, respectively. Myrtle Beach had the most inventory at 31,682rooms; Baton Rouge had 13,143 rooms and Ogden 4,503.
Areas with the lowest RevPAR recovery in 2021 compared to2019 included San Jose, San Francisco and Washington DC, with 45.3 percent,61.7 percent and 67.6 percent, respectively. The report noted that largermarkets can have more upscale extended-stay properties, which have been slowerto recover.
Large cities like Las Vegas, Phoenix and San Antonio, whichhave higher concentrations of economy extended-stay properties, were among 43metropolitan areas that in 2021 achieved RevPAR equal to or higher than the nominal value in2019.
RevPAR recovery at extended-stay properties was powered byoccupancy over average daily rate in most markets. Nearly half of the 100 areas Highland included in its report had a 2021 occupancy recovery index of at least 100 percent. Highest occupancyrecovery was recorded in Lancaster, Pa., Ogden and Baton Rouge. MSAs with thelowest 2021 occupancy recovery were Minneapolis-St. Paul, San Jose and WashingtonDC.
Essential Business Travel Putting Heads in Beds
In recent Q4 and full-year 2021 earnings calls, Choice,Wyndham,IHGand Hiltonreported lift from extended-stay properties housing reshoring, relocating and essentialworkers. Hotel executives are seeing a market that needs more options.
MarriottInternational SVP global sales Tammy Routh told BTN, that leisure remains thestronger component of extended-stay business, but business travel continuedthere as well with, “traveling nurses and doctors, project teams, businesscontinuity, entertainment and insurance.”
Choice Hotels president and CEO Patrick Pacious, in thecompany’s recent earnings call, cited global supply chain shortcomings andre-shoring of offshore operations as a big extended stay opportunity. “A recentsurvey indicated that over 80 percent of North American manufacturers arelikely to reshore their production operations. This trend has alreadycontributed to the accelerated recovery of our business travels,” he said.
Wyndham president and CEO Geoffrey Ballotti exuded the sameconfidence in the essential and long-term project workforce to bolster moreextended-stay business. “We know that there are over 10 million constructionworkers out there that travel every week. And we also know that relocation andlong-term assignments are going to continue to pick up.”
