Rooms Hotels

Extended Stay Properties are Hot and Growing

May 24, 2014 1:05 pm

Skift Take

From extended-stay properties to limited service hotels, there is a whole lot happening and hot in the hotel industry beyond luxury 4- or 5-star properties.

— Dennis Schaal

Free Report: The Changing Business of Extended-Stay Hotels

Scorpions and Centaurs  / Flickr.com

The kitchen area in a guest room at Staybridge Suites at the Denver Tech Center in Colorado. Scorpions and Centaurs / Flickr.com


Living out of hotels and eating in restaurants every night can get old fast.

So for Randy Franzen, a pilot based out of Oregon, the ability to cook his own food and use a full laundry room while on the road makes for a better traveling experience, especially when that trip lasts all summer.

“There’s just a lot more catered to your ability to make yourself a little more at home,” he said from his room at the My Place hotel on South 42nd Street in Grand Forks, Michigan.

Grand Forks has seen an influx of new extended-stay hotel rooms in the past year, a demand that hotel officials said is being driven by temporary workers and those looking for a place to stay while they wait to move into more permanent digs.

Extended-stay hotels offer amenities such as a kitchenette in each room and don’t require a lease, according to the Highland Group, which compiles an annual report on the extended-stay hotel market. Local hotel managers referred to the rooms as being like studio apartments.

“There weren’t any accommodations for these people who were staying here for one month to a year,” said Clare Albrecht, director of sales at Staybridge. She said the 42nd Street hotel, which opened in May 2013, was the first locally to be geared toward extended stays.

“Just offering the full kitchens and the amenities you would find at home has been so great for these people who are coming long-term,” she said.

Meeting demand

The number of extended-stay rooms available across the U.S. has increased steadily over the last few years, reaching 360,925 in 2013, according to the Highland Group. And that’s poised to continue growing, with almost 17,000 rooms under construction at the end of 2013, up from 6,000 in 2011.

Upscale extended-stay hotels, which include Staybridge, accounted for 65 percent of the growth, Highland reported. Average occupancy across all extended-stay hotels reached 75 percent in 2013, the highest since 2005.

“Demand increased faster than supply despite a net gain of more than 10,000 rooms (in 2013), which was the largest annual increase since 2009,” the Highland Group report stated.

Albrecht cited some of the oil-related companies that have located here as one reason her hotel is seeing demand for extended stays, as well as a rush of new construction projects.

“There’s just so much being put up in Grand Forks right now that we’ve stayed busy,” she said.

My Place, which is adjacent to the Staybridge Suites on 42nd Street, is also seeing a lot of business from construction workers. But it also offers nightly rates and is still seeking visitors from the Alerus Center across the street. Albrecht said Staybridge also accommodates short-term visitors.

“With how Grand Forks is booming… there definitely is a market for the extended stay,” Heather Correll, director of sales and marketing for My Place. “We see a mixture of people who stay one night, and we see people who will come in and stay three months at a time.”

My Place opened its first location in Dickinson, N.D., in early 2012 as demand for housing options in the Oil Patch grew, Correll said. It now has locations in Bismarck, Minot, Sioux Falls, S.D., Bozeman, Mont., and Cheyenne, Wyo.

Housing

Others are staying in hotels long-term while they try to find permanent housing.

“A lot of times this is their temporary fix until they can get in somewhere,” Albrecht said. “People building homes, they stay with us until their home is ready. It’s just really hard to find those flexible leases right now in Grand Forks.”

Still, some hotel managers said their biggest clientele appears to be construction workers.

“Most of them have been contractors,” said Michael Smith, general manager of Expressway Suites just off of 42nd Street.

That hotel is not considered extended-stay, Smith said, but all of its rooms are suites. He said it currently has about nine extended-stay visitors in the 71-room building.

Smith said his previous employer, another motel in town, would get a few requests a month for extended stays, but “not nearly as many as here.”

“Not even close.” ___

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