Extended-Stay Hotels Post 7.7% Revenue Surge in August

Extended-stay hotels generated a 7.7 percent room revenue surge in August, outperforming the wider hotel industry's 3.1 percent lift as demand outpaced room supply additions for the seventh consecutive month. Occupancy hit 77.8 percent, widening the performance gap over comparable properties to 12.3 percentage points, according to The Highland Group.

How did extended-stay hotels outperform the broader industry in August?

Extended-stay properties recorded higher growth across all core performance metrics compared to comparable class hotels, according to The Highland Group's US Extended-Stay Hotels Bulletin: August 2026 [1]. Room revenue climbed 7.7 percent, more than double the 3.1 percent increase posted by the overall U.S. hotel industry [1].

Occupancy reached 77.8 percent for extended-stay properties compared to 65.5 percent for comparable hotels, establishing a 12.3 percentage point premium [1]. Asian Hospitality noted that this margin widened from 11.9 percentage points a year earlier [1]. The Highland Group observed that such a wide spread is unusual for a summer month, a period when traditional hotels generally capture greater benefit from seasonal leisure travel [1].

What do the monthly ADR and RevPAR figures show?

August marked the seventh consecutive month of simultaneous gains in occupancy, average daily rate, and revenue per available room for extended-stay lodging [1]. Occupancy rose 0.7 percent year over year, ADR climbed 2.3 percent to $122.17, and RevPAR increased 3 percent to reach $95.11, according to The Highland Group [1].

Comparable hotel performance trailed across every segment, according to STR/CoStar figures cited in the report [1]. While comparable hotels experienced an overall RevPAR gain of 1.1 percent, extended-stay properties beat corresponding classes across economy, mid-price, and upscale segments [1].

How did individual extended-stay tiers perform against regular chain scales?

Extended-stay properties outperformed traditional tiers in revenue and rate across every price point, according to STR/CoStar figures [1]. In the economy bracket, extended-stay RevPAR increased 1.4 percent while traditional economy hotels suffered a 1.1 percent RevPAR decline [1]. Mid-price extended-stay RevPAR grew 3 percent, leaving traditional midscale hotels behind at 0.2 percent [1]. Upscale extended-stay RevPAR expanded 4 percent versus 3 percent for upscale peers [1].

The room revenue divergence showed even wider separations between the models. Extended-stay revenue jumped 6.1 percent in economy, 9.6 percent in mid-price, and 6.6 percent in upscale [1]. By contrast, standard economy hotel revenue contracted 2 percent, midscale managed a 1.7 percent lift, and upscale gained 4.9 percent [1]. Across all traditional properties excluding luxury and upper upscale—segments where extended-stay supply remains negligible—revenue grew just 2.1 percent [1].

Why is extended-stay room supply continuing to lag demand?

Extended-stay room demand increased 5.3 percent in August, surpassing supply expansion for the seventh straight month, Asian Hospitality reported [1]. This August expansion also beat the segment's long-term annual demand average of 5 percent [1]. Adjusted for the February 2024 leap day, extended-stay demand has risen in 44 of the past 45 months, whereas demand at comparable hotels rose just 1 percent in August, according to STR/CoStar [1].

Available room nights grew 4.5 percent compared to August of the prior year [1]. Although supply growth rose above 5 percent during the second half of 2025, it stayed below that threshold through the first eight months of 2026, averaging 4.6 percent, according to The Highland Group [1]. Annual supply growth over the past three years settled between 2.1 percent and 4 percent, with both rates trailing long-term averages [1].

What does the construction pipeline indicate for future performance?

Development activity is declining, with rooms under construction falling 30 percent year over year, according to The Highland Group [1]. This drop follows a second quarter in which extended-stay operators recorded their largest quarterly gains in demand, ADR, RevPAR, and room revenue in years [1].

The Highland Group projects total supply growth across 2026 will finish below the long-term historical average [1]. With new room deliveries slowing and demand remaining steady, operating fundamentals point toward sustained RevPAR expansion [1].