HENDERSONVILLE, Tennessee—New hotel supply has been growing by leaps and bounds since the basically flat levels in 2004, 2005 and 2006. As of July 2009, year-to-date, the number of new hotel rooms that have opened in the U.S. has increased 3.2 percent (148,174 rooms).
Of the STR-defined chain-scale segments, upscale and midscale-without-food-and-beverage report the most rooms under construction, not including conversions of hotels from one segment to another.
The hotels in the upscale segment include Courtyard, Four Points, Hotel Indigo and Homewood Suites. Of the existing U.S. properties in that segment, 34 percent of the properties (27 percent of rooms) are extended-stay brands such as Residence Inn, Staybridge Suites and Hyatt Summerfield Suites. Of all of the hotel projects under construction, the upscale segment is expected to grow properties by 7.0 percent (6.3 percent room growth). The upscale tier of extended-stay hotels is expected to grow by 5.8 percent (6.2-percent room increase). Transient upscale brands such as Springhill Suites, Hyatt Place and Hilton Garden Inn are expected to grow by 7.6 percent (6.3-percent room growth).
By comparison, the midscale-without-F&B segment, represented by brands such as Comfort Inn/Suites, Country Inn & Suites and Hampton Inn/Suites, has almost three times as many properties (and twice the number of rooms) in the U.S. This segment’s extended-stay brands include Candlewood Suites and TownePlace Suites. Even though there are only 56 extended-stay hotels under construction in this segment, these hotel openings will increase the number of extended-stay midscale-without-F&B properties by almost 10 percent. Transient midscale-without-F&B brands (e.g., Fairfield Inn/Suites, Holiday Inn Express, La Quinta Inn/Suites) expect 4.8-percent growth from its properties currently under construction.
The growth of extended-stay properties in the upscale and midscale-without-F&B segments reflects the investment in hotel development that tends to maintain healthy performance premiums during challenging economic times.