The K-shaped economy was very evident in the hotel industry in 2025, according to the Highland Group's 2025 Annual Report for Extended-Stay Hotels.
Luxury class hotels led RevPAR growth and the economy segment reported the largest decline in RevPAR compared to 2024. Not so with lower priced extended-stay hotels which are the least impacted by discretionary changes in travel. Economy extended-stay hotels reported a 1.4 percent RevPAR loss in 2025 which was slightly more than one third of the decline all economy class hotels recorded. The 1.1 percent fall in mid-price extended-stay hotel RevPAR was less than half the estimate for all mid-price hotels.
“Extended-stay hotel room supply growth accelerated in the latter half of 2025 but with new room construction and RevPAR both falling, supply growth should moderate and maybe even decline in 2026,” Mark Skinner, partner at The Highland Group, said in a statement.