HB ON THE SCENE: Marriott Underscores Commitment To Growth In The Extended-Stay Arena

PHILADELPHIA— Marriott International is continuing to pad its lead in the extended-stay arena, and shows no signs of taking its foot off the accelerator anytime soon. Taking full advantage of the opening of its 400th Residence Inn (this one in Philadelphia) as a suitable occasion to underscore Marriott’s growing commitment to the extended-stay segment, Senior VP/brand management Tim Sheldon noted that— including the opening of 100 TownePlace Suites— the Washington DC-based lodging company has (already) passed the 500-property milestone in this end of the business. Sheldon was joined by Residence Inn Brand VP Stacey Fell Milne and TownePlace Suites VP Laura Bates during the Sept. 24th early morning media briefing at the newly opened Center City Philadelphia facility. Together, the trio of Marriott executives explained why extended-stay has weathered the current economic storm better than many other sectors of the industry… and is likely to continue doing so. According to Sheldon, the numbers already show nearly one-third of the total room-nights sold are to hotel guests staying five nights or longer. Add to this the contention (by Milne) that extended-stay properties have barely scratched the surface in terms of capitalizing on urban opportunities, and the future for this line of lodging product shapes up as a busy one indeed. On the other hand, it was explained that perhaps the biggest impediment to development in city locations has been the understandably higher land costs involved. However, it was pointed out that— if the price for a particular parcel does fall into line— an extended-stay hotel can just as easily be built on a vertical as on a horizontal plane. Such flexibility was seen as making it eminently possible to place a significant number of rooms on a comparatively small plot of land. Moreover, apparently there is even great flexibility in the number of rooms necessary to make the concept work. While some contend the optimum number of units for an extended-stay property should be something in the neighborhood of 120, the visiting Marriott executives (and their associates back at corporate headquarters) seem determined to prove there is no hard-and-fast number to hold to when opening rooms in this sector; it’s more a case of fitting the facility to its surroundings… as demonstrated by the 269 rooms encompassed within the newest Residence Inn to call this city home. Additionally, Marriott’s extended-stay savants should have more than ample opportunity to continue demonstrating their belief in developmental flexibility. As Milne pointed out: “We expect to open 33 more (Residence Inns) by the end of 2003.” As for how those already up and running are doing, she noted occupancy levels are averaging in the high 70% range systemwide year-to-date, and up into the mid 80% range in recent months. (Interestingly, Bates reported similar results, noting TownePlace Suites has posted about a 75% occupancy rate year-to-date, but also registering a hike to about 80% more recently.)