Extended-stay hotels outperformed comparable hotel segments during the first half of 2026, posting stronger performance across most key metrics as moderating supply growth and above-average demand helped drive revenue growth.
According to the “US Extended Stay Hotels: Mid-Year 2026” report from The Highland Group, RevPAR returned to positive year-over-year growth in February after declining for 10 consecutive months beginning in January 2025. Growth continued to accelerate through June as supply growth moderated and demand increased at a pace above the long-term average.
The segment recorded its strongest quarterly performance in several years, with the largest quarterly increases in demand, average daily rate (ADR), RevPAR and room revenue in 11 to 17 quarters. Second-quarter room revenue increased 9 percent year-over-year, marking the largest quarterly gain in more than three years.
RevPAR, meanwhile, posted its highest quarterly increase in 13 quarters, while ADR recorded its strongest quarterly growth since the third quarter of 2023. Extended-stay hotels also maintained an occupancy premium of 11.6 percentage points over comparable hotel classes.
“Strong demand growth coupled with a substantial decline in new rooms under construction are very good indicators that extended-stay hotel RevPAR will continue to grow during the foreseeable future,” Mark Skinner, partner at The Highland Group, said in a statement.
Development activity continued to moderate during the first half of the year. The number of extended-stay rooms under construction declined 30 percent year-over-year and is now slightly more than half the level reported two years ago. National extended-stay supply growth is projected to reach approximately 4.5 percent in 2026, below both the four-year pre-pandemic average and the segment's long-term average.