It’s no secret that the extended-stay hotel segment is a current favorite of guests and developers, alike. And why not? They include all the amenities of home (think a kitchen), rooms are typically larger than other types of properties and they don’t break the bank. For owners, the cost to build, cost to upkeep and cost to operate have been value engineered to be as or more effective vis-a-vis other hotel asset types.
It’s why many of the newer brand launches have targeted this segment: Marriott International’s StudioRes, Hyatt Hotels Corp.’s Hyatt Studios, Hilton’s still unnamed Project H3, ECHO Suites Extended Stay by Wyndham, to name but four.
CBRE Hotels Research and STR have noted that extended-stay portfolios in the U.S. have expanded by more than 50%—a CAGR of 7.1% versus 3.2% for the U.S. market as a whole. Meanwhile, as Highland Group has pointed out, demand for extended-stay accommodations is still outpacing current supply.
Extended-stay is more mature in the U.S. than it is in Europe, but Accor is now touting its own brands, inclusive of extended-stay sibling aparthotels, like Adagio and Novotel Living. Accor says it now has an estate of more than 380 hotels and 45,000 rooms.
“The escalation of demand for extended-stay properties is a global phenomenon, driven by a demographic shift among travelers who are taking longer trips, mixing business with leisure and exploring destinations more fully,” said Jean-Jacques Morin, Accor deputy CEO and Premium, Midscale & Economy Division CEO. .
Accor is now taking its extended-stay message to the masses in a rather vigorous campaign. “With new travel habits taking hold and more people seeking out longer stays, Accor has continued to do what we do best—lead the markets where we have deep roots, strong relationships and a powerful presence, such as Europe, the Middle East and Asia-Pacific,” said Morin.
He continued, adding that over the past 20 years, Accor has been building up and developing its extended-stay portfolio. “With one of the fastest growing extended stay networks in the industry and robust demand for our popular premium to midscale brands, we will continue to push the boundaries in creating innovative places where our guests can live, work and play,” he said.
Accor noted that global extended-stay hotels market is currently valued at approximately $54.5 billion and projected to reach $166.5 billion by 2032, citing Future Market Insights, predicting a CAGR of 11.8% over the next 10 years.
And, according to the Global Serviced Apartment Industry Report 2023, “Europe remains the epicenter of serviced apartment demand,” while Asia Pacific accounts for the largest share of corporate serviced apartment volumes, with the UK a close second. Accor said the report further identifies the cities with the greatest growth in demand as Riyadh, London and Singapore.
Accor opened its first Novotel Living in Singapore with subsequent properties in Bangkok, Saigon and Kazakhstan and more on the way, the company said. Of the Novotel Living brand, Accor calls it “a brand perfect for guests wishing to experience longer stays, while feeling at home wherever they are in the world.”
Meanwhile in Riyadh, Accor has several luxury serviced apartment projects underway, including the 250-key Sofitel Serviced Residences Riyadh.