The Biggest Hotel Deal of the Pandemic So Far Does Not Signal Future Deals
Skift Take
What distress? The $6 billion price tag on Extended Stay America is a result of its real estate and durable customer base. Period. That is why it is significantly outpacing the rest of the hotel industry during the pandemic.
Early Check-In
Editor’s Note: Skift Senior Hospitality Editor Sean O’Neill brings readers exclusive reporting and insights into hotel deals and development, and how those trends are making an impact across the travel industry.
Blackstone and Starwood Capital’s $6 billion joint acquisition of Extended Stay America is the largest hotel deal announced from the pandemic so far — but it isn’t the kind of pandemic hotel bargain many investment firms are jockeying for.
Extended Stay America, through its ESH Hospitality lodging trust subsidiary, owns 564 hotels and only franchises out 86 properties. This is unique, given the hotel industry’s push in recent years to go asset-light and instead focus on management agreements and licensing deals for brand affiliation.
“Extended Stay America is a real estate company, but it’s effectively a $6 billion real estate company,” said Michael Bellisario, a senior analyst covering the hotel sector at Baird. “In order to take a company like that private, the debt market has to be functioning and available as a source of capital.”
The Chase: The extended stay hotel sector has been the hotel industry’s most durable for the duration of the pandemic. Extended St
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