Extended-Stay Hotel Performance Reaches Multiyear High as Construction Pipeline Shrinks

August 3, 2026

Extended-stay hotels have posted some of their strongest performance gains in several years during the first half of 2026 as demand accelerated and the number of rooms under construction declined sharply, according to new reports from The Highland Group.

Extended-stay hotel demand increased 5.8% year over year in June, the largest gain for the month since 2021, when the sector was rebounding from the COVID-19 pandemic. Demand growth also exceeded supply growth for the fifth consecutive month.

The FIFA World Cup contributed to the segment’s June performance, boosting average daily rate (ADR), revenue per available room (RevPar) and room revenue growth to their highest monthly levels in more than three years, The Highland Group reported.

For the second quarter, extended-stay hotels recorded their largest increases in demand, ADR, RevPAR and room revenue in 11 to 17 quarters, depending on the metric. Most midyear performance measures also exceeded those of comparable classes of traditional hotels.

The improvement came as the development pipeline continued to contract. The number of extended-stay rooms reported under construction fell 30% from a year earlier and was less than half the level reported two years ago.

“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,” said Mark Skinner, partner at The Highland Group.

The findings were included in The Highland Group’s recently release June extended-stay hotel bulletin and its 2026 Mid-Year U.S. Extended-Stay Lodging Market Report.