Recent Extended-stay market trends observed in the US are not necessarily a reflection of its new cousin in Europe.

Recent trends in some US markets show a deceleration or decline in the RevPAR performance of extended-stay hotels. This trend mirrors the traditional hotel sector in the US which started these trends in some markets last year.

Is this likely to be a reflection of the trends to be seen in Europe in the near future? We don’t think so….

The reasons are threefold: 1) infancy of the European market, 2) demand-supply imbalance, and 3) concept innovation.

1) The European Market is still in its infancy, which only reallystarted in earnest with global branded supply 7-10 years ago. The US is a mature extended-stay market. The first Residence Inn by Marriott only opened in Europe in 2011, whereas the first Residence Inn opened in the US in 1975 (created by Jack de Boer), and the chain was sold to Marriott in 1987.

Jonathan Humphries led the product development and market development strategy for the creation of Residence Inn by Marriott in Europe, one of the first branded extended-stay concepts in Europe. The first property opened in Munich in 2011. Since its launch, the concept has been further fine-tuned and now boasts eleven properties. This year, Marriott is opening a new dual-branded property of Residence Inn and Moxy in Frankfurt, Germany.

2) The demand-supply imbalance is still dramatically significant, as experienced extended-stay customers are only starting to become familiar with the concepts available in the market place. Whenever a new well-targeted extended-stay hotel opens it ramps-up to stabilised performance in a very short time, whilst usually outperforming the traditional hotel market. The US faces some of the usual supply-demand imbalances, typical of this timing in the hotel cycle.

3) Whereas as in the US, investors are familiar with the attractive returns of extended-stay versus traditional hotels; in Europe, concept innovation is driving investor interest in extended-stay because of the existing comfort-level of investing in traditional hotels. In many cases this has led to more innovative products than in the hotel sector: think Zoku (Amsterdam), Locke (London), etc. with still more to come in the future……

Overall, we feel there is plenty of time for investors in Europe to “make hay whilst the sun shines” – if they invest in well-positioned, targeted, customer-focused and innovative extended-stay concepts.

The following articles highlight the recent US trends and the robustness of the European market:

By Jonathan Humphries, Chairman and Owner of HoCoSo.


About HoCoSo

Swiss-based HoCoSo, which stands for Hospitality Consulting Solutions, brings together teams of global experts to create tailor-made solutions for client projects. Jonathan Humphries, Chairman and Owner of HoCoSo, and his direct team specialize in the extended-stay hospitality market, the boutique sector, and resort developments in Europe, the Middle East and Africa (EMEA). We create innovative and future-oriented solutions for each of our clients across the following three fields of services:

  • Product & Concept Creation, for both portfolio & individual asset developments.
  • Strategic Project Scoping, Execution & Asset Management, with a focus on strategic business planning, partner selection, and market & nancial feasibility studies.
  • Hospitality Education for companies and academic institutions, with a focus on course development, training and teaching innovation.