Analysts Expect Extended Stay Hotels To Give Others A Run For The Money

NEW YORK— Jones Lang LaSalle Hotels’ analysts report that extended-stay hotels are relatively recent products in lodging that have gained tremendous popularity over the last decade, thereby representing a significant competitor to conventional hotels in many markets around the world. Despite economic bad times, Jones Lang points out that in the past 18 months the extended-stay segment has held occupancy in the 70-percent range compared with all hotels in the USA where occupancy has rested below the mid 60-percent range. One factor that might be driving this trend is the fact that the average daily rates for extended stay are as much as 50% lower than at traditional hotels. Given these healthy numbers, construction continues to increase at a rapid rate says the Jones Lang report. For example, in 2002 limited service outfit Extended Stay America increased construction starts to 24 from 15 in 2001, and intends to increase the rate further to 25 new starts in 2003. Also, Holiday Inns upper-end Staybridge Suites plan to open 11 new properties by the close of 2002. This builds their portfolio from zero to 50 properties in four years. Going further, Jones Lang indicates that US Franchise Systems expects to open a total of 20 new Microtel Inn and Suites properties by year-end 2002. US Franchise Systems also owns Hawthorn Suites, for which it expects to open another 22 properties by year-end. In addition, Wingate Inns International and AmeriHost Franchise Systems have opened five Wingate hotels to-date in 2002, with another 19 expected by the end of 2002.