NATIONAL REPORT—Kalibri Labs has released a special report evaluating U.S. hotel performance using length-of-stay and rate category metrics for March 2020, the first month of the COVID-19 pandemic, with comparisons to full-year 2019. The report specifically illustrates the distinctions between the extended-stay hotel category and the traditional hotel model, as well as delves into upper-tier and lower-tier extended-stay hotel performance. Business mix plays a significant role as a driver of performance, with pronounced differences in COVID-19’s impact by hotel category, length of stay and rate category.
Extended-stay hotel guest paid RevPAR performed 14.4% better than the non-extended-stay hotels in the U.S. during March, which is the only month in the last five years that this has occurred. Lower-tier extended-stay hotels specifically drove the extended-stay resiliency at a -30% March 2020 year-over-year guest paid revenue compared to -48% for upper-tier extended-stay hotels and -54% for all non-extended-stay hotels.
This report features several cuts of U.S. hotel performance to provide additional context and performance metrics on the COVID-19 impact as it relates to extended-stay hotels.
Key Takeaways
Many of the fundamentals that made extended-stay hotels attractive over the last decade also mitigated its COVID-19 impact:
- In 2019, 40% of extended-stay hotel revenue was driven by demand staying seven nights or more as compared to 9% for non-extended-stay hotels.
- In March 2020, longer-length-of-stay hotel demand was not as severely impacted as the shorter-length-of-stay hotel demand.
- In March 2020, extended-stay hotels’ largest contributing rate categories, Rack/BAR and Corporate, declined significantly less than non-extended-stay hotels.
Within extended-stay, lower-tier extended-stay hotels were the least impacted by the COVID-19 crisis:
- In 2019, lower-tier extended-stay hotels captured 22.4% more of their business through Rack/BAR and 3.1% more from Corporate in 2019 than non-extended-stay hotels.
- In March 2020, shorter-length-of-stay business (1-6 nights) was impacted the most in both extended-stay categories, but lower-tier extended-stay hotels proved more resilient across all length of stay tiers.
- In March 2020, lower-tier extended-stay hotels’ largest-producing rate categories, which encompassed almost 60% of their actualized room nights in 2019, experienced the least reduction in demand.