Extended Stay Hotels Market | Global Industry Analysis 2033

EXTENDED STAY HOTELS MARKET OVERVIEW

The global extended stay hotels market size was valued approximately USD 32.70 Billion in 2024 and will touch USD 61.10 Billion by 2033, growing at a compound annual growth rate (CAGR) of 7.19% from 2025 to 2033.

An extended stay hotel is for guests staying longer than usual, often a week or more. These hotels have more home-like features like full kitchens, bigger living areas, and laundry. They're great for business people, families, or anyone needing a cozy place for a long time. With flexible bookings and extra conveniences, they're a cheaper and more comfortable option than traditional hotels for longer stays.

COVID-19 IMPACT

“Shift in Customer Demographics”

The COVID-19 pandemic changed who stays at extended stay hotels. Before, it was mainly business travelers and people on long-term jobs. But during the pandemic, more individuals and families stayed longer because of travel rules, remote work, and needing to isolate. So, extended stay hotels got more leisure travelers and people needing temp housing while moving. This change in guests meant new needs for services and amenities.

LATEST TREND

”Rise of Remote Work and Digital Nomads”

The rise of remote work and digital nomads has big effects on extended stay hotels. More people working from home find these hotels appealing because they're flexible, cozy, and have home-like features. Guests now like staying longer in cities to mix work and play, boosting the demand for long-term bookings. Hotels are adapting by providing better Wi-Fi, offices, and other work-friendly perks to attract this new group.

EXTENDED STAY HOTELS MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Economy, Mid-Range and Luxury/Upscale.

Economy: Economy extended stay hotels offer basic rooms for long stays at cheap prices. These hotels have small kitchens, laundry, and Wi-Fi, perfect for budget travelers or those staying for work, etc. They're cheap and simple, so they're popular. But, competition is fierce and profits are small because prices are low.

Mid-Range: These are more comfortable with nicer kitchens, bigger rooms, and extras like gyms. They're popular with business travelers and families who want a good mix of comfort and price. This market is growing because more people are staying longer, especially in cities, and are willing to pay a bit more for perks.

Luxury/Upscale: These are the best hotels with top-notch amenities, concierge services, and fine dining. They're for high-up business people or wealthy individuals who want the best and most exclusive stays for a long time. Although this market is smaller, it's expected to grow as richer people and big companies look for long-term luxury options. But, they face competition from traditional luxury hotels and serviced apartments that also want this high-end market.

By Application

Based on application, the global market can be categorized into Travelers, Business Customers and Others.

Travelers: Extended stay hotels are awesome for people staying a long time, like on vacation, moving, or for personal reasons. They're cheap and have home-like features, which is great for families or anyone needing a longer stay. The demand is steady, but since many travelers want cheap options, the competition is tough, and profits are usually lower.

Business Customers: Business customers are a huge market for extended stay hotels, especially those on long work trips or moving for work. These hotels have business centers, fast Wi-Fi, and are near offices. Demand is up because more people are working from afar or on short-term jobs. Business guests often pay more for comfort and ease, so this part of the market makes more money than traveler stays. The market is expected to keep growing as work habits change.

Others: This category includes groups like government employees, students, and people needing long-term stays for medical treatments or special circumstances. This market is smaller but still important. While it doesn't have the same steady demand as business or vacation guests, it's growing as more people look for temporary housing. This sector is more niche and varies depending on the specific needs, but it provides unique opportunities.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

”Increasing Demand for Longer Stays”

More and more people are choosing extended stay hotels because they need a place to stay for a longer time. This is happening because of things like job moves, short-term work, long vacations, and life events. People are looking for cheap, flexible places that feel like home when they're staying for weeks or months. This new love for longer stays, plus the perks of hotel amenities, makes extended stay hotels a better pick than regular short-term stays.

Restraining Factor

”Economic Uncertainty and Reduced Consumer Spending”

Economic downturns or times of financial uncertainty can really affect the demand for extended stay hotels. When money is tight, businesses often cut back on travel budgets, meaning fewer long-term business travelers will choose extended stay hotels. On top of that, people who are struggling financially might look for cheaper accommodation or delay their travel plans altogether. This leads to lower occupancy rates and a drop in revenue for extended stay hotels.

Opportunity

”Increasing Demand for Work-from-Home Solutions”

The rise of remote and hybrid work has created new chances for extended stay hotels. More folks are working from home or doing a mix of home and office work, and they need flexible, cozy spots to stay. Extended stay hotels have work areas, fast internet, and kitchens, so they're perfect for both working and chilling out. Lots of business people and remote workers are picking them over regular hotels now. This change in work patterns will likely increase the demand for long-term stays.

Challenge

”Intense Competition from Traditional Hotels and Other Lodging Options”

One big challenge for extended stay hotels is the tough competition from traditional hotels, serviced apartments, and short-term rental sites like Airbnb. These options often have similar features like kitchens and flexible stays, sometimes cheaper or more convenient. Regular hotels are now offering long stays to attract more customers, which is making it tough for extended stay hotels to shine. Plus, short-term rentals are a pain too because travelers love the comfort and flexibility of places like Airbnb, especially for shorter stays.

EXTENDED STAY HOTELS MARKET REGIONAL INSIGHTS

North America

In North America, especially the U.S. and Canada, extended stay hotels are becoming more popular because more people want to stay for longer, whether for work or fun. Cities with a lot of business are behind this trend, and these hotels have kitchens and laundry, making them a great choice for stays that last weeks or months. Remote work has also boosted demand, as people need flexible living arrangements. Online booking makes it easy to find these hotels, but competition is high, and hotels must focus on providing great experiences to stand out.

Europe

In Europe, especially in cities like London, Paris, and Berlin, the extended stay hotel market is booming. More people are staying for business or moving, and tourists are also opting for longer stays because it's more flexible and cost-effective. Major cities and business hubs are seeing a rise in these hotels. However, the market is a bit more fragmented, with some countries embracing extended stays more than others. There are also challenges like local regulations and tough competition in big cities.

Asia

In Asia, especially in China, Japan, India, and Singapore, the extended stay hotel market is growing super fast. Business travel and foreigners moving there are the main reasons behind this. More and more people are seeking long-term stays in these rapidly growing cities. In places like China and India, international business is booming, making extended stays a popular option. In Singapore, a business hub, extended stays cater to both corporate clients and long-term visitors. The market is still developing, though, and faces challenges like competition from other types of accommodations and varying customer preferences.

KEY INDUSTRY PLAYERS

”Rising Competition and Evolving Trends in the Long-Term Accommodation Market”

Competition for extended stay hotels is tough now because many companies are joining in. Hotels need to be in good spots, have fair prices, and offer kitchens, laundry, etc. Online prices make it easy to compare, so hotels must stay competitive. Good service and tech like contactless check-ins are also important. To stay ahead, hotels are expanding their networks and loyalty programs as the market grows.

List of Top Extended Stay Hotels Companies

Extended Stay America
Marriott International, Inc.
Hilton Worldwide Holdings Inc.
The Ascott Limited
Hyatt Hotels Corporation

KEY INDUSTRY DEVELOPMENTS

August 2024: Extended Stay America planned to open several new properties in key metropolitan areas across the US, reflecting its commitment to expanding its presence and meeting the growing demand for extended stay options.

June 2024: Marriott International announced the opening of a new Residence Inn in Toronto, Canada, expanding its footprint in the key North American market.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

Extended stay hotels have grown a lot recently because people's work and living habits have changed. More people work from home and look for flexible housing. These hotels are great for stays of weeks or months, with kitchens, laundry, and big living spaces. They're perfect for long-term business trips or temporary moves. The pandemic also made them more popular because they're safer and more private than regular hotels.

In the future, extended stay hotels are expected to keep growing. Remote work and being a digital nomad will keep people wanting flexible, long-term places to stay. Corporate relocations and long trips will also help the market. Hotels will focus more on tech, health and safety, and being eco-friendly. With longer stays and personalized experiences, extended stay hotels are becoming a good alternative to short-term rentals and vacation homes, and will keep growing and innovating.