Six hotel industry consultants provide a window into the latest trends.
by Nick Fortuna
Choice Hotels International’s acquisition of WoodSpring Suites for $231 million last December served as a real endorsement of the extended-stay segment of the hotel market. And already this year, Yotel, known for its compact rooms, has announced plans to expand into the segment with five locations in an initial rollout.
“Extended-stay hotels have really ramped up,” said Bruce Ford, senior vice president and director of business development for Lodging Econometrics. “There are a few new brands in extended stay, and we’re seeing more extended stay being developed than ever before.”
In February, Lodging Econometrics reported that there were 424 extended-stay hotel projects accounting for 46,551 rooms currently under construction, representing about 27 percent of all hotels currently under construction in the United States. In addition, 605 extended-stay projects accounting for 64,121 rooms were scheduled to start construction within 12 months, and 341 more extended-stay projects totaling 32,672 rooms were in the early planning stages.
Home2 Suites by Hilton has the largest extended-stay pipeline with 355 projects and 37,188 rooms, according to Lodging Econometrics, followed by Marriott’s Towneplace Suites with 208 projects and 21,299 rooms and its Residence Inn brand with 199 projects and 24,680 rooms. Last year, 239 extended-stay hotels with 26,586 rooms opened in the U.S.
Ford said the demand for extended-stay rooms is especially strong near family leisure destinations and some of the large youth sports complexes that have sprouted up because they are convenient for parents traveling with children.
“Extended stay gives you the flexibility to have a little bit more space within your guestroom environment,” Ford said. “Suites have always been a part of the hotel business, but extended stay has evolved the suite concept into more of a family-style guestroom in some cases.”
The increasing popularity of extended-stay hotels is just one of the trends seen by hotel industry consultants in 2018. Here are five more:
Shared-site developments. Extended-stay construction is one of the factors driving the building of shared-site developments, where a family of hotel brands puts two or more brands next to each other to accommodate different market segments. The individual hotels may be slightly smaller than other locations within each brand and typically will have shared guest services and staffs, Ford said.
One such example is found in Teaneck, N.J., where Hilton is constructing a 14-story building housing two hotel brands. There will be 160 rooms in an extended-stay Homewood Suites and another 190 in a Hampton Inn & Suites. The extended-stay rooms address strong demand from professionals seeking affordable rooms with an easy commute to Manhattan.
“Many of the shared-site developments do in fact contain extended-stay components,” Ford said.
Nelson F. Migdal, an attorney for the hotel industry and a member of the Urban Land Institute’s Hotel Development Council, said shared-site developments are a way hotel brands can stay connected to consumers as their travel habits and priorities change over time.
“There is a lot of attention being paid to the millennial customer, but I think we have to keep our minds open to the idea that what is appealing to us today may change,” he said. “Single travelers’ tastes and requirements are going to change if they have a partner, if they have children, so the idea is, and I think you’re seeing this with the brands, that you have to have a range of products.”
More last-minute booking. Mike Schugt, president of the Teneo Hospitality Group, said smartphone apps such as HotelTonight are making it easier than ever for last-minute travelers to arrive in a city on a whim and still find the best deals on hotel rooms. The low national unemployment rate, good deals on last-minute airfare and demanding work schedules that prevent some consumers from planning vacations long in advance are among the factors fueling last-minute hotel bookings, he said.
“As a traveler, you don’t even have to make a hotel reservation ahead of time now,” Schugt said. “In the digital age, all the inventory is on the handheld devices and the laptops of millions of people, so it’s just so simple to book the day of. Now they can book a last-minute flight and go see the sporting event or the concert that they wanted to see.”
Shorter vacations. Last-minute deals from airlines and hotels looking to fill inventory have led to shorter vacations for many travelers who could manage to get away for a long weekend on short notice but can’t take off for a full week or two, according to Jacquel Tucker, managing director of Global Hospitality Expert Solutions. Also contributing to the trend is that while the unemployment rate is low, consumers’ wages have remained flat, making it difficult for most people to splurge on long trips.
“It’s all about being flexible and finding that last-minute deal, and the economy is dictating a lot of that, where people don’t have that extra money to spend on a whole two-week vacation,” Tucker said. “The trend is very short-term travel, and the length of stays isn’t the same as it used to be. It’s rarer now for people to go away for a week or two weeks unless they’re traveling internationally. Mostly, it’s a long weekend, whenever they can get that in.”
Rise in adventure traveling. U.S. national parks enjoyed record popularity in 2016, with nearly 331 million visitors, a 7.7 percent increase from 2015, according to the National Park Service, continuing a recent trend of record visitation levels. Hotels near national parks and other destinations that offer outdoor adventures such as whitewater rafting, mountain biking and ziplining are reaping the rewards, according to Christopher Henry, chief executive of Majestic Hospitality.
“Adventure travel is one of the fastest-growing sectors within the travel-and-tourism arena,” Henry said. “In a quest for new and different experiences, people are reconnecting with the natural world. People want to see and experience things that they can’t in their hometowns.”
Informal eats. Clark Wolf of the Clark Wolf Co. said a recent experience he had while consulting for the Loews hotels in Orlando, Fla., is representative of a broader trend – hotels devoting fewer resources to traditional room service and more resources to food markets in the lobby that allow guests to bring meals up to their rooms.
“Nobody wanted the butler room service that we had very carefully and expensively designed,” he said. “Nobody wanted strangers to come rolling into their room with all this gorgeous china and crystal. They didn’t want it – they were in Orlando, for God’s sake. So, we did a little market, called it Sal’s Market, with a pizza station and some takeout deli stuff, and there was a line out the door with some serious markup.
“They would call from their room, order something and have it delivered in a bag. More hotels are doing exactly that. They’re having their own little markets in the lobby.” ■