WASHINGTON, D.C. — In late July, the Extended Stay Lodging Association—a membership-based non-profit association for owners and operators of extended-stay hotels—and Kalibri Labs, hosted the ExStay D.C. Workshop at the Westin Crystal City Reagan National Airport. The one-day event brought representatives from hotel brands, management companies, investment groups and performance-analytics firms together to discuss the challenges and opportunities inherent in the sector.
Facts & Figures
Following a welcome by Kimberly Rowell, executive vice president of Five Star Hospitality Management; Douglas Artusio, chairman and CEO of Dellisart Hospitality and founder and chairman of the Extended Stay Lodging Association; and Cindy Estis Green, CEO and co-founder of Kalibri Labs, the first full session of the day was an overview of the domestic extended-stay sector with insights from Kalibri’s Jennifer Hill and Kristie Kacarab and Mark Skinner of The Highland Group.
“This year has been a little bit turbulent, to say the least, when it comes to our industry,” Hill said, noting that the team at Kalibri has been tracking the impact of federal policy changes.
Despite the turbulence, demand for extended-stay accommodations has been steadily growing. As of May, approximately 611,000 extended-stay guestrooms are open and operating in the United States, making up about 10.3 percent of the total U.S. inventory by room, according to the Highland Group. The segment reported $14.4 billion in room revenue in 2019 and this grew to $19.5 billion in 2024. The Highland Group estimates the sector will achieve $20 billion in room revenue by the end of this year.
According to Kalibri, half of all states across the country have between one and five “high-demand” submarkets for extended-stay developments. Sixteen have between five and 10, and five have between 11 and 20. While Florida and Texas are “hot spots” in terms of demand and development, Hill said, other markets may be less obvious. For example, Ohio shows a "notable concentration of high-potential submarkets."
Development
The next panel examined new-build and conversion developments—and how developers are underwriting extended-stay projects.
Emily Feeney, senior director of capital markets and investments at Noble Investment Group, said that to lower risk, the team at Noble will look for a piece of land that fits what they need. For example, finding a two-acre site that is zoned and entitled correctly with utilities and facilities to handle storm water all in place can “extremely expedite” the process. “Time is money,” she told the attendees. “It helps the whole process move more efficiently and helps us stay within the confines of our budget.”
What Owners Need to Know
The next session encouraged attendees to talk with their neighbors at each table about best practices in terms of attracting long-term guests. Ralph Thiergart, executive vice president for strategy and chief of staff at Dimension Hospitality, noted that at extended-stay hotels, a few guests staying for a longer term can be more lucrative than multiple guests using the property as a traditional transient hotel. To that end, he advised sales and marketing leaders at extended-stay hotels meet with the management teams at local apartment complexes so that the managers will recommend the hotels to incoming residents whose apartments are not yet ready.
Mia Smith of Concord Hospitality Enterprises recommended reaching out to traveling nurses as target guests for extended-stay hotels. "They are low impact on the hotel. They're asleep [half] the time that they're there and working the other half. So they are great, great, great clients for extended-stay."
Several participants agreed that passing up short-term stays during periods of high demand can be beneficial as well if it makes more rooms available for more long-term stays.
Lifetime Achievement
The Association and Kalibri also used the conference to present its first-ever Lifetime Achievement Award to Paul Novak, partner at Whitman Peterson. Over the course of Novak’s 55-year career in hospitality real estate development, he has launched several notable brands, including the first-ever Courtyard by Marriott, Fairfield Inn, Residence Inn and Aloft by Westin, and most recently, StudioRes by Marriott. Over his career, he has developed or acquired more than $4 billion in hotel assets.
A graduate of the Michigan State University School of Hospitality Business, Novak began his career at Marriott, where he oversaw the development of more than 225 Courtyard properties. He later led large-scale acquisitions and redevelopment efforts at the Hampstead Group (Bedrock Partners), including key transactions involving Wyndham, Harvey Hotels and Holiday Inn assets.
The award was presented by Liam Brown, group president, U.S. and Canada, Marriott International, and Artusio. Industry leaders celebrated Novak’s career in a tribute video. Hilton President and CEO Chris Nassetta, who praised Novak’s impact on the sector: “This recognition is so, so well deserved. For years, you have helped shape the landscape of our industry—particularly in the extended stay segment ... We are so grateful for your partnership, and I am personally so thankful for our close friendship.”
Getting Local Approvals
Following the award, Chirag Shah, EVP of policy, regulatory and legal at the American Hotel & Lodging Association, interviewed Novak about the challenges of getting local approvals for extended-stay developments.
"[Many] municipalities simply will not allow an extended-stay product in the market unless it meets certain standards—and those standards are really designed to create a product [that is] more of a transient product," Novak said. For example, some may not approve projects that don't have full-service restaurants or at least 5,000 square feet of event space. "For most extended-stay products, that makes no economic sense, because we're not in the group business, we're in the individual transient business."
Brand Selection and Chain Scale
The day’s final panel examined the ever-growing range of brands within the extended-stay segment and operating strategies for each. With most recent past AAHOA chair Miraj Patel as moderator, Damon Healey, founder and managing principal at Eternal Companies; Chet Patel, senior vice president at Baywood Hotels; Steven Anderson, senior director of extended-stay development at Concord Hospitality Enterprises; Talene Staab, brand leader of Home2 Suites by Hilton; Matt McElhare, vice president and extended-stay segment lead for Choice Hotels International; and Ron Stewart, senior vice president, midscale brands, U.S. at Marriott International; weighed in on what developers and operators need to know when selecting a brand for their asset and then running it efficiently.
Stewart said that the Marriott team takes a “holistic view” when determining what kind of asset belongs on what street corner, examining data from their existing hotels in the market or in similar markets.
“Not every brand's optimal for each market,” McElhare said, noting that partnering with an established company can “allow for alternative development strategies and put the right brand in the right market.”