Skift Take
Choice Hotels is betting big on extended-stay hotels but is doing so methodically.
As hotel groups vie for dominance in the lucrative extended-stay sector, Choice Hotels has emerged as a leading player in the economy and midscale segments. The franchisor said on Wednesday it had opened its 500th extended-stay property.
America’s hotel companies have been investing heavily in extended stays. In the past two years, Marriott, Hilton, Hyatt, and Wyndham have been rolling out extended-stay brands to capture what they see as long-term demand. However, longer-term players like Choice Hotels and Extended Stay America say they have some competitive advantages.
The big picture: Choice Hotels is betting mostly on properties that function more like apartments than hotels, targeting blue-collar business travelers and project workers rather than traditional hotel guests. The group had nearly 400 hotels in the pipeline across four extended-stay brands: Everhome Suites, WoodSpring Suites, Suburban Studios, and MainStay Suites.
Driving the news: Choice has gone from 100 to 500 extended-stay hotels in only six years.
Between the lines: Choice Hotels’s strategy differs from competitors in a few ways, McElhare said.
“We’ve doubled down on really investing in being the leader in what we would call kind of ‘true extended stay,’” Matt McElhare, vice president and extended stay segment lead, told Skift.
- Choice’s average length of stay for guests staying more than a week is 35 days. Less guest turnover means lower customer acquisition costs.
- The group offers multiple entry points for developers (new builds and conversions and models with different levels of amenities).
- Choice uses an AI-powered data-analysis tools to identify high-potential markets for hotels by tracking metrics like population growth and manufacturing investment. Its 500th property, for example, is an Everhome Suites in Glendale, Arizona near infrastructure projects and key demand drivers like Luke Air Force Base.
- The group’s properties are designed to be run with lean staffing, yet its WoodSpring Suites brand has won J.D. Power awards for guest satisfaction. That can translate into profits. WoodSpring Suites boasted 55.5% gross operating profits on average last year, well above typical hotel margins.
- For developers, the company has created a model designed for rapid conversions in as little as a few months for its MainStay Suites and Suburban Studios brands such as by shipping pre-fab kitchens and lobbies to be installed on-site quickly.
- “Over the past six years, Choice has built a team of 70 individuals that do nothing but extended stay, from operations to marketing to sales to all the little nuances that affect how we drive accountability for guest experience,” McElhare said.
What’s next: Choice Hotels is exploring automated check-in kiosks and remote overnight support systems to further optimize operations, with potential launches in 2025, McElhare said.
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