Choice Hotels International executives believe they’ve found a new brand that taps into unmet guest and developer demand with the extended-stay, midscale Everhome Suites brand.
LOS ANGELES—Executives with Choice Hotels International believe their company is uniquely poised to grow in the midscale, extended-stay space, noting their history of success in both of those segments while launching their new Everhome Suites brand.
Everhome Suites—the 13th brand in Choice’s portfolio—was announced during the first day of the Americas Lodging Investment Summit on Monday, and ground broke on the first property for the brand in Corona, California, a suburban market adjacent to Los Angeles. The hotel is being developed by the Paladin Group.
Choice officials said they plan to primarily grow the brand in the U.S. and Canada by selling master licensing agreements to institutional investors for the development rights around the top MSAs in both countries. The company currently has two such deals in place for the brand, developing properties in Los Angeles and Austin, Texas.
President and CEO Pat Pacious said his company has seen significant growth in the extended-stay segment in recent years.
“We now have 400 extended-stay hotels in our portfolio, which has tripled over the last two years across three hotels,” he said. “It’s a high growth segment for Choice, and 20% of supply pipeline (for extended-stay hotels) is our products.”
A prototypical Everhome Suites property will be roughly 114 guestrooms, ranging in size from 324-square-feet king bed studio suites to 658-square-feet one-bedroom suites.
David Pepper, chief development officer for Choice, said the company will be strict in staying close to the brand standards, which he said is important for maintaining profitability at the $85 rate the brand will target along with the projected costs to build the hotels.
The product is rather fine tuned to the needs of investors looking to grow in the extended-stay segment, Pepper said.
“We worked with (existing WoodSpring Suites owners) to make sure this brand and prototype has the type of returns they want,” he said. “And there’s a lot of institutional capital that feels like they missed out on WoodSpring and want to get in on this.”
The first Everhome Suites property is expected to open in 2021, with an expected construction time of 18 months.
Anna Scozzafava, VP of extended stay brands, strategy and operations at Choice, said the brand will target guests who stay seven nights on average and will provide all of the amenities needed to maintain their at-home routines, particularly when it comes to cooking meals.
“We’ll allow them to live their life on their own terms while at this hotel,” she said.
According to a news release announcing the brand, key features for guests include:
- a rolling, variable height workstation;
- a full-size closet;
- “spa-like” bathrooms;
- fully-equipped kitchens;
- modern public spaces;
- outdoor pools;
- a self-service market place; and
- in-room laundry in some room types.
The expected cost of developing an Everhome Suites property is roughly $85,000 per key. Scozzafava noted the brand is signed to operate efficiently with 13 FTEs needed.
Pacious noted getting the right types amenities, such as guestroom desks, with the right average length of stay is key in getting the types of returns developers are looking for.
“We want to put them in markets where there’s demand still for extended stay,” he said. “If it turns into a transient hotel, then developers should be doing (other brands). We have to make sure we’re not overloading the owner with amenities the guests don’t value.”
Scozzafava said that 20% of roomnights sold are for hotel stays seven nights or more but only 9% of existing supply is designed for purpose-built for extended-stay guests.