Remember Richard Gere in Pretty Woman — the decadent playboy who lived in luxurious hotels and traded personal stories with the hotel manager and concierge? Back then, the very notion of living in a hotel was far-fetched. But in today’s hospitality industry, hotels are being built for that very purpose. The extended-stay segment is trending towards expansion and few brands are willing to be left out of the development loop.
Brian Stanford, senior managing director at CBRE Hotels, says the dual-branded hotel model is the industry mechanism of change. “As a way to maximize the value of amenities, the dual-branded hotel model can cater to the long- and short-term guest — without having to build two sets of amenities,” explains Stanford. “The extended-stay hotel will ultimately run at a higher occupancy rate and ADR, which benefits the select-service brand.” Stanford states the occupancy numbers regularly run several points higher than the select-service occupancy rates, while ADR remains consistent between the two.
But even extended-stay hotels that don’t participate in “dual branding” are witnessing momentum and a need to increase choices for the extended-stay guest. “One thing that’s really important is that the property reflect the amenities and comfort of home,” says Jeanette Costa, vice-president of Sales and Marketing at Crescent Hotels & Resorts based in Fairfax, Va. “That includes convenience amenities, such as free laundry, fully equipped kitchens and storage lockers, at no extra cost.”
Costa notes that an extended-stay hotel normally runs at approximately 55 to 65 per cent occupancy. “This is the optimal mix,” she says. “But it depends on how other sectors in the market are managing, the time of year, or even current events.” Given regularity of natural disasters relative to climate change, Costa says it’s important for a hotelier to not just cater to the business class, but to remember the segment also remains key for the demographic relocating during a crisis. “Extended-stay includes everything, including families that have been displaced by an emergency,” she says. “Or it may include families relocating temporarily while they search for a permanent home. That’s where extras really make a difference — to a family in transition.”
Whatever the reason for the industry turn, extended-stay properties have seen a five-per-cent leap in growth and development. “We’re seeing a supply growth in this area, especially from upper-tier brands,” explains Stanford. “Take the Homewood Suites by Hilton or Residence Inn by Marriott, which are relatively new to the Canadian market — these are considered upscale in terms of the brand spectrum. It’s a development within the sector we never would have seen say, 20 years ago.”
In part, globalization has required business people to travel and stay for longer periods of time. “Development is bound to happen in parts of the country where people are travelling for work, such as Alberta,” says SilverBirch Hotel & Resorts’ CEO Steve Giblin, who opened the first Hilton-branded Home2Suites in Canada. It’s one of the first Hilton-exclusive extended-stay offerings with trademark services such as an “Inspired Table” complimentary breakfast, free Wi-Fi, a 24-hour business centre, digital check-in options and lots of convenient extras such as a desk on wheels for guests to relocate their work areas within the spacious suites.
On June 1, 2016, the property won the Edmonton Mayor’s Award for accessibility, which honoured the development’s inclusivity of design. Not only are Home2Suites by Hilton West Edmonton accessible, but the property allows the possibility for disabled guests to upgrade their rooms to larger suites with bigger bathrooms, roll-in showers or bathtubs and wheelchair-accessible kitchens — with appliances, counters and sinks designed to be operable while seated. “It’s the attention to detail that will really win you back customer loyalty,” says Giblin. “In this industry, return guests are crucial.”
“There’s also a lot of team building that happens at extended-stay properties,” says Costa. “Or you may have a project team come for an extended stay. These are teams of people that usually arrive on a Monday and then check-out by Thursday.” For these types of short stays, Costa says attracting the millennial guest is key. “There are a lot of young, single people who come through, working on a contract. It’s just the nature of work these days. So you want to make sure your amenities and food-and-beverage options cater to that demographic.”
Steve Gupta, CEO of the Gupta Group and Easton’s Group of Hotels, recently opened a Courtyard Marriott and a TownePlace Suites by Marriott. “This was a 20-year dream in the making,” says Gupta. “But I think it will become a trend in terms of combining hotels depending on use. Extended-stay is a growing segment.” Gupta’s notion was controversial because of the single front desk and the two concepts rolled into a single tower, but he says it works.
“[TownePlace Suites] caters to extended-stay guests by offering much more space, free buffet breakfast and other business options,” he notes. Extended-stay guests enjoy breakfast on the top floor of the building, where extensive Toronto skylines stretch before them. “But it’s also a huge advantage because of the large amount of venue space.” With more than 13,000 sq. ft. on the main floor, participants at a conference or multi-day event can return to the rooms without ever leaving the building.
There are, however, cautionary tales. “Extended-stay buildings will bring to them a number of different types of guests, so developers really need to take noise into consideration when designing a building,” says Costa. She notes that most of the complaints received in this kind of property relate to noise level with neighbours or door slamming in the corridors. “Some people may just really be trying to get their rest — even during the daytime hours, so it’s important to ensure noise doesn’t travel.”
With an ever-increasing millennial demographic, there really is nothing more important than digital connectivity. To this end, Costa warns there is no such thing as being too current. “Managers and staff will need to revisit their technology plan frequently leading up to installation,” cautions Costa. “With the quick-changing nature of the tech world, your plan could change within months — and your brand new hotel could already be outdated by the time you open.”
Volume 28, Number 8
Written by Jennifer Febbraro