Published April 15, 2024
Extended-Stay hotels are a lucrative investment niche. Market shifts are creating new opportunities as the lines blur with select-service hotels. Let’s explore…
Why the Rise of Extended-Stay Amenities in Select-Service Hotels?
There are several factors contributing to the rise of extended-stay amenities in select-service hotels:
- Growing Consumer Demand: It caters to travelers seeking longer-duration accommodations, often for business or relocation. The increasing demand for flexible living arrangements, especially among millennials, is driving the growth of this market segment.
- Enhanced Profitability: Select-service hotels can boost their profitability by offering amenities such as in-room kitchens or kitchenettes. These can attract guests seeking a more home-like environment for longer stays, leading to higher room rates and revenue.
A Lucrative Opportunity for Investors
Investors see the potential of the extended-stay market. This convergence of select-service is creating a new asset class with compelling investment opportunities, offering:
- Strong Demand Fundamentals: The demand for extended-stay accommodations is rising due to the resurgence of business travel and the growing popularity of flexible living.
- Stable Returns: Extended-stay hotels often offer stable returns due to longer guest stays and potentially higher room rates.
- Less Competition: This new segment within the select-service space has less competition compared to traditional hotel, presenting a niche for investors.
The Future of Extended-Stay Hotels
The trend of integratingfeatures into select-service hotels is shaping the U.S. hotel market. Investors are well-positioned to capitalize on this lucrative opportunity in the extended-stay segment, driven by continuous demand for accommodations tailored to those seeking longer stays.Source: This article is informed by insights from the JLL report “U.S. Select-Service and Extended-Stay Hotel Outlook 2024“
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