Extended stay hotels are a surefire investment

Extended stay hotels aren’t as glamorous as luxury chateaus, but they are a good investment.

They may not have buzzy nightclubs or champagne bubble baths like some hotels, but one analyst told The Wall Street Journal that, for investors, extended stays “print money.”

Extended stay hotels are a surefire investment

At extended stay hotels…

… guests typically check in for 1 week to several months. They differ from traditional hotels in a couple of ways:

  • They have cheaper nightly rates
  • They come with kitchenettes
  • They swap posh amenities for things like laundry and mail services

They’re also cheaper to operate

With less guest turnover, hotels save on cleaning and staffing costs. And because guests frequently cook for themselves, they don’t need full-service, on-site restaurants and bars.

Plus, they can weather a pandemic

At the onset of the pandemic, extended stays were used by health care and military personnel. In 2020, revenue per available room fell 48% YoY for traditional hotels, but only 33% for extended stays.

And now, experts say the lodging once popular with business travelers is attracting remote workers and vacationers, who are into the autonomy, low contact, and convenience they provide.

In 2021, extended stays enjoyed an average occupancy rate of 73% compared to 56% for hotels in general.

Fun fact: Actor Richard Harris once said he lived in London’s The Savoy Hotel because “if you’re paying the mortgage on a home, you can’t ask the bank manager to fetch you a pint.” He’s got a point.

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