Choice Hotels’ Extended-Stay Portfolio Outperformed the Industry in 2020
Extended-stay hotels have been popular with guests during the coronavirus pandemic — and Choice Hotels International Inc. is proof of that. The company recently reported that its extended-stay portfolio continued to outperform the industry in 2020, proving that its strategic commitment and continued investments in this segment are driving a competitive advantage.
Its brands in the segment also showed significant gains in 2020. For example, in the fourth quarter of 2020, Choice Hotels says its extended-stay portfolio outperformed the industry’s revenue per available room (RevPAR) change by 49 percentage points and reached RevPAR index share gains of 14 percentage points over its local competitors, year-over-year.
It also achieved average weekly occupancy rates of more than 70% since the pandemic’s start in mid-March through the end of the year, which exceeded the industry weekly average by 30 percentage points. In addition, WoodSpring Suites — its largest brand in the segment — saw an average occupancy rate of 72% last year, which was higher than the U.S. hotel industry average of 44%.
The brand also enjoyed year-over-year RevPAR growth of 2% in December. “Our strategy to focus on the extended-stay segment continues to pay off, as evidenced by our brands’ resiliency and outperformance compared to the industry in this unprecedented environment,” said Ron Burgett, the senior vice president of franchise development of extended stay for Choice Hotels.
“Hotel developers recognize the value of our brands, which is why we awarded 110 extended-stay franchise agreements last year, validating our strategic focus on the segment,” he added. “Choice gained key insights from the WoodSpring Suites brand when it was acquired over three years ago and has successfully leveraged those leanings. We’re optimistic about the growth potential of our extended-stay portfolio in both new construction and conversion opportunities.”
Choice Hotels also has seen growth in the footprint of its extended-stay portfolio. Its WoodSpring Suites, MainStay Suites, and Suburban Extended Stay brands together opened 44 hotels in 2020, bringing their total to nearly 450 domestic hotels. In the last five years, the extended-stay portfolio has almost quadrupled in size and now comprises 8% of Choice Hotels’ total domestic portfolio. The company also launched Everhome Suites, which is the first brand to enter the midscale extended-stay space in nearly a decade.
“Our extended-stay brands are purpose-built for long-term guests, and the demand for long-term rooms in various stay occasions, such as colleges and universities, has increased along with requirements for social distancing,” added Anna Scozzafava, the vice president and general manager of extended stay for Choice Hotels. “We’re proud to offer hotels that suit guests’ needs and lifestyles, irrespective of the travel landscape.
“Our brands are designed to provide comfort, convenience, and in-room features that are essential when away for a night, a week, a month, or longer — including kitchens, onsite laundry facilities, and food and beverage options that meet extended-stay guests’ preferences while enabling owners to operate efficiently and maintain margins regardless of the economic climate,” she added.