The number of extended-stay hotel rooms under construction in the U.S. declined 21 percent as revenue per available room declined in 69 metropolitan markets, according to information from the Highland Group. Notably, the number of extended-stay rooms under construction in the nation’s 100 largest hotel markets fell below 25,000 from more than 30,000 one year ago.
Sixty-nine MSAs reported lower extended-stay hotel RevPAR in 2025 compared to 2024. More than one fifth saw a greater than 5 percent decline, which was more than twice the national average.
“With about one third of MSAs expecting 5 percent or less extended-stay supply growth and no increase forecasted in one quarter of the 100 largest markets in 2026, the near term outlook is generally good for extended-stay hotels” Mark Skinner, partner at The Highland Group, said in a statement.
Supply growth also ticked down, while demand and room revenues posted their highest monthly gains in more than one year. January’s decline in RevPAR was the smallest since it started contracting in April 2025.
While construction numbers declined, the segment reported what the Highland Group called “a comparatively strong start to the year” in January with most performance metrics bettering corresponding classes of all hotels.
“With the overall hotel industry showing signs of emerging from the downturn, January’s relatively strong extended-stay hotel performance is a good early indicator for 2026.” Skinner said.