HOLLYWOOD, Fla. — With just about every hotel company expanding further into the extended-stay space, it’s no surprise that Red Roof is also taking steps towards growing its footprint within the sector.
During a general session at Red Roof’s conference last week, Robert Goad, SVP of revenue strategy, described extended-stay hotels as the “one opportunity” he believes “can help this franchise community outperform” in the coming year.
Goad noted CoStar statistics that extended-stay demand has reached a record high, capturing 15.9 percent of total travel demand in 2026. “Even more importantly, lower-priced extended-stay hotels are continuing to gain share, with demand growth exceeding 5 percent this year,” he told attendees. “Current industry forecasts suggest extended-stay demand growth is expected to continue into 2027.”
To that end, Goad said that setting a goal of capturing 5 percent to 10 percent of demand from extended-stay guests may create “meaningful occupancy and revenue opportunities” next year. “Building this base business is what will help drive [revenue per available room] growth well beyond 1.2 percent while also positively impacting your profitability in 2027.”
Heating Up Extended Stay
During a panel called Heating Up Extended Stay, Brenna Worl, Red Roof’s director of training, encouraged extended-stay owners and managers to leverage operations, pricing and sales together to improve extended-stay profitability.
Operations
To maximize operational efficiencies, she noted that housekeeping could be limited to weekly visits when appropriate, which can reduce labor costs.
Worl noted ways extended-stay hoteliers can save in their supply chain, particularly in terms of cleaning and laundry supplies as well. “When we're doing [fewer] cleanings … you really save on those supplies,” she said, adding that energy usage can also be reduced by less frequent housekeeping. Cross-training staff can also help improve efficiencies and save money, she added. “It improves the coverage, it improves the service and the experience that you're getting.”
Owners also can drive revenue through on-site marketplaces, pantries, laundry services and renting or selling kitchen kits, Worl added.
Pricing Tips
Senior Revenue Manager María Meléndez said extended-stay hotels should have a balanced mix of guests from three segments: “We have the monthly, which is about 60 to 80 percent of our guest contribution, weekly with 10 to 15 [percent], and daily with only 5 to 15 percent.” Each segment, she continued, plays a “very critical role” in the overall performance, with monthly guests providing stability for the overall business, weekly providing some flexibility and daily guests for short-term opportunities.
When it comes to pricing for different types of stays, Meléndez advised pricing by both commitment and market conditions. For weekly stays, find a baseline by scoping out competing hotels in the area but also seek out class-B apartments for a benchmark. “If your market is very limited with extended-stay hotels in the area, we generally recommend a savings between 20 to 30 percent” of the daily best available rate, she said. Monthly rentals can get a 3 to 5 percent discount from the weekly rate, and the few daily bookings can charge a 10 percent higher rate than nearby economy hotels for the perks of having in-room kitchens and laundry facilities in the hotel.
Meléndez also encouraged her audience to protect the long-term residents rather than displacing the base business for short-term demand, especially during major events when managers could be tempted to raise rates. “It becomes a challenge to rebuild all that base business,” she cautioned. “Our objective should be to maximize profitability without having to sacrifice your future occupancy.”
Winning Local Markets
Dana Lewis, enterprise account executive for extended-stay, said that every extended-stay GM should have a clear plan of action, intentional messaging and a way to involve the entire staff in finding demand. “We're going to look at the reality in our markets,” she said, noting that demand already exists: “Crews, displaced families, travel nurses, students, and relocating employees are already needing a place to stay,” she said. “The business is here. Our job is to find it.”
To that end, outreach should be specific and consistent, with team members focusing on a few local targets, she said. Flyers and QR codes also can help raise awareness and secure business.
“Get to know your nearby employers, the project crews, healthcare contacts, and people helping families who need temporary housing. Don't just sell a night. Show them how hometown studios can fit a long-term need.
Summarizing the lessons, Worl said that when operations, pricing and selling all come together, the benefits go “right to the bottom line. It's all about profitability—and that's what we're in business for, right?”