By Justin Randall, HUB International
The growth in extended stay accommodations isn’t a passing trend but rather a reflection of the changing social and economic landscape. Even renowned hotel brands are pouring substantial investments into this expanding market, with their extended stay portfolios growing by over 50% in the last decade.
Overall hotel occupancy is set to hit 63.8% in 2023, with Wisconsin only 2.2 percentage points behind its pre-pandemic numbers at 54.2%. Several factors have propelled this growth, including the surge in remote work, mobile work crews and the need for temporary housing due to natural disasters such as flooding, tornados and wildfires.
Embracing the extended stay model offers a multitude of advantages and operational efficiencies. It can significantly bolster revenue streams and occupancy rates since guests often book for extended periods, which is valuable during traditionally slow periods in the hospitality industry. Moreover, by catering to guests who stay for weeks or even months, hotels can reduce the frequency of room turnovers (and consequently, staffing requirements) while building brand loyalty, thereby enhancing a hotel’s reputation and overall profitability.
Extended stays not only benefit hotel owners but offer a plethora of perks to customers, with affordability being the primary draw. These establishments typically feature spacious, apartment-like suites at competitive rates, inclusive of essential amenities like Wi-Fi, laundry facilities, fully-equipped kitchens, mail services and 24/7 security. Unlike traditional hotels, they often don’t include bars, restaurants, stores or concierge services, making them cheaper to build.
Revealing the hidden risks
While the advantages of extended stays are undeniable, this model also presents unique risks and challenges that hoteliers should remain aware of. These risks extend beyond just maintaining rooms over extended periods.
Consider the following risks:
5 best practices for extended stays
To mitigate the risks associated with extended stays, hotel operators should consider implementing the following best practices:
As the industry continues to evolve, extended stay hotels are poised to remain a prominent and enduring presence in the accommodation landscape. By understanding the dynamics of this market and implementing best practices, hoteliers can seize the opportunity to offer guests an enticing alternative to traditional lodging.
About the Author:
Justin Randall leads the Hospitality & Real Estate Practice for global insurance brokerage Hub International’s Wisconsin Region, focusing on leading client strategy in those verticals. Justin’s 10 years of experience encompasses leading client engagements, advising clients on all aspects of insurance, risk management and overall enterprise growth. Justin works with several different franchises including clients with more than nearly $2B in revenues. Justin is an active member of the Wisconsin Restaurant Association as well as a participant in the American Hotel & Lodging Association. Mr. Randall holds a Bacheler’s Degree in Business from Edgewood College in Madison, WI.
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