The extended stay hotel segment is experiencing significant growth, driven by evolving guest preferences and a focus on operational efficiency.
As travellers increasingly seek accommodations that blend the comforts of home with hotel amenities, major hotel brands are expanding their portfolios to include extended stay options.
Market Growth and Demand
The global extended stay hotel market was valued at approximately USD 54.51 billion in 2023 and is projected to reach USD 166.58 billion by 2033, exhibiting a compound annual growth rate (CAGR) of 11.8% during the forecast period.
This surge is attributed to the rising demand for longer-term accommodation, particularly among business travellers, remote workers, and individuals relocating for work assignments.
Brand Expansion and Diversification
Recognising the lucrative potential of the segment, several major hotel chains have introduced or expanded brands to cater to for the demand:
- Marriott International: Launched «StudioRes,» a brand focusing on budget extended stays, and expanded into the midscale segment with the acquisition of Hoteles City Express.
- Hilton Worldwide: Introduced «LivSmart Studios,» targeting travelers seeking cost-effective, longer-term lodging solutions.
- Hyatt Hotels Corporation: Unveiled «Hyatt Studios,» marking its entry into the upper-midscale category.
- Wyndham Hotels & Resorts: Launched «ECHO Suites Extended Stay,» aiming to capture demand in the midscale extended stay market.
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Operational Efficiency and Guest Preferences
Extended stay hotels typically operate with leaner staffing models and offer amenities such as in-room kitchens and laundry facilities, reducing operational costs and appealing to guests seeking a home-like environment.
The rise of remote work and hybrid arrangements has further fuelled demand, as professionals look for flexible lodging options that accommodate longer stays.
Strategic Considerations for Hoteliers
To successfully capitalise on the extended stay trend, hotel operators must:
- Tailor Offerings to Local Markets: Understanding regional demand drivers is crucial for positioning properties effectively.
- Maintain Brand Consistency: Ensuring a uniform guest experience across locations builds trust and loyalty.
- Leverage Technology: Implementing advanced booking systems and personalised services enhances guest satisfaction and operational efficiency.
The extended stay segment presents a significant growth opportunity for hotel brands. By aligning offerings with guest preferences and focusing on operational efficiencies, hoteliers can effectively tap into this expanding market.
