Extended-stay hotels—once the domain of road warriors, soon-to-be homeowners, job shifters and even divorcees— are in vogue for travelers and hotel developers, alike.
The rise in remote work, a shifting economy and a severe case of ‘why not?’ have all contributed to a new kind of traveler that, by choice or by trade, is looking for convenience and cost-effectiveness.
By their very nature, extended-stay hotels are designed for a life in transition. Less expensive than a traditional, by-the-night hotel, with none of the long-term commitment that renting an apartment requires, extended stays are the perfect middle ground. Standard amenities include space for sleeping as well as living, an in-room kitchen, plenty of storage and often an in-lobby market with grab-and-go snacks.
Major brands are entering the affordable midscale market with their own spin on the format, and some are so new their details are still in the conceptual stage. But with hundreds of properties already in development around North America, the commitment is very real.
Will the hotel landscape ever be the same? Only time will tell. But one thing is for certain—the comfort of convenience is here to stay.
NEW LOCATIONS
In developing its new extended-stay brand for the upper-midscale market, Hyatt Hotels Corp. saw an opportunity to do more than just provide guests an affordable hotel experience. The new format afforded an opportunity to reach new locations and segments of the population that previously had felt inaccessible. When it opens in 2024, Hyatt Studios will offer a casual, cost-effective option in a multitude of new areas.
“Through research, we learned that when our World of Hyatt members chose to stay with another brand, it was often because they couldn’t find a Hyatt hotel nearby, or were looking for a different price point,” said Dan Hansen, global head of Hyatt Studios and former CEO of real estate investment trust Summit Hotel Properties. “For our developers, they wanted a brand that was easily scalable, flexible, and adaptable across markets, and could accommodate both extended and shorter stays. By entering the upper-midscale segment, and extending into markets where we currently don’t have a presence, we are filling a need for both developers and guests.”
Hyatt is not alone in recognizing the potential to activate a new market. In creating Project H3, Hilton envisioned a chance to plug in properties near military bases, hospitals, and even natural disaster-stricken regions. In instances where renting an apartment would be impractical, an affordable extended-stay hotel would satisfy a crucial need for temporary housing. Project H3 will allow guests to stay for weeks, or even months at a time, if necessary.
“There are quite a few instances where you do extend your stay for even longer because circumstances have changed,” said Matt Schuyler, chief brand officer for Hilton. “That’s why [Project H3 is] priced daily, but paid for based on your length of stay every week. The longer you stay, the lower your rate.”
Hilton already has extended stay brands Home2 Suites and Homewood Suites, but envisions Project H3 tapping into locations where those brands don’t make sense, said Schuyler. With a focus on the service industry or economy market segments, Hilton already has more than 400 locations identified for future Project H3 properties.
“You see where these types of extended-stay hotels make sense, yet [currently] there is no product in the market for extended stay,” said Schuyler. “There’s hundreds of opportunities in front of us for this type of product, and eventually thousands.”
EFFECTIVE DESIGN
Past iterations of extended stays were often patchwork renovations of older hotels, a decision that benefitted neither traveler nor operator. These new prototypes, like Wyndham Hotels and Resorts’ ECHO Suites Extended Stay by Wyndham, were built from scratch with efficiency in mind. Modus Architects and interior designer AB Blevins developed a décor program that was not only stylish, but could be easily fixed or replaced.
“In this segment, you really must think about how the high occupancy and demand affects design, and how you can plan to make that easier for owners,” said Krishna Paliwal, head of architecture, design, and construction at Wyndham Hotels & Resorts. “For example, rather than a mirror in the bathroom that backlit, we use regular mirrors because we are thinking about easy replacements. Lamps can break, so we stick to ceiling lights throughout. That way, if something is broken, it’s easier for the owner to go to a local repair shop for a temporary fix while still renting the room, rather than having to take the room out of service for more intrusive updates.”
Streamlined building measures, like building the walls 8 feet tall—the same height as the material used—are making labor and installation costs more efficient for mass production. With 265 hotels in the pipeline, and multiple projects already in various stages of construction, ECHO Suites is now Wyndham’s fastest-growing brand.
The cost efficiency extends to guests, too. A reduction in amenities means not paying for things you don’t need, while focusing on the things you do. ECHO Suites will include a 24-hour fitness center, on-site security, multiple laundry machines and free parking to help guests live normal routines during their stays.
“From a design and construction perspective, the extended-stay format has presented us with a huge opportunity to be even more thoughtful than ever before and really focus on how we are making each space efficient,” said Paliwal.
SMOOTH OPERATOR
A slower pace makes extended stays affordable for hotel owners and operators, too. Housekeeping services are weekly or on demand, not daily. Contactless check-out and intermittent check-ins reduce the number of concierge staff. Without costly amenities like restaurants, bars, pools or conference areas, there’s no need to pay for upkeep.
Extended-stay brands in the Marriott Bonvoy portfolio like Residence Inn, TownePlace Suites and Apartments by Marriott Bonvoy offer upscale and luxury guest experiences, but are costlier to rent and operate. The just-announced StudioRes was built with a focus on a streamlined, minimalist operating model to appeal to maximize a return on investment.
“Our designers are equally focused on maximizing the efficiency and minimizing the cost-to-build of the StudioRes prototype to ensure that it can be built at a fully loaded cost that is consistent with the return expectations of owners and franchisees,” said Noah Silverman, global development officer, US & Canada for Marriott International, Inc. “We also want to be careful not to add ‘bells and whistles’ to enable us to keep the model intact and the efficiencies in place.”
At 124 rooms and 54,000 square feet, with an estimated construction cost of around $13 million, StudioRes is poised to be Marriott’s most affordable cost-per-key product to develop and build in the U.S. Marriott has already identified more than 1,800 potential markets in North America alone.
“Marriott comes to the affordable midscale extended-stay market with a combination of strong historical operational and financial performance and experience,” said Silverman. “That experience will allow us to deliver bottom-line cost savings with a light operational model for owners and franchisees, thereby enabling a lower price point for guests.”
Story contributed by Derek Herscovici.