Extended stay hotel room revenue posted its first monthly decline in more than three years in March, but the contraction was far lower than the overall hotel industry, according to The Highland Group, a consultancy.

Although most performance metrics compared with March 2023 were lower for extended stay hotels, they were better than the results from corresponding classes of all hotels.

Mark Skinner, partner, said, “Total extended stay hotel room revenues fell 0.2% in March, the first monthly decline in more than three years, but significantly less than the 1.6% contraction CoStar estimated for the overall hotel industry.” (CoStar is a data and analytics provider for the hospitality industry.)

The result continued “a difficult start” to 2024 for the segment, according to the research. Economy extended stay hotels extended their monthly declining RevPAR trend, but March’s contraction was less than half for all economy class hotels as reported by CoStar.

Total extended stay demand gained 0.8% in March and represented positive changes in demand in 15 of the last 16 months. Although only fractional, said the report, March’s increase compares favorably with the 1.4% decline in demand CoStar reported for the overall hotel industry.

In March, total extended stay hotel average daily rate (ADR) recorded a monthly decline. Economy extended stay was the only segment reporting an actual ADR decrease. ADR for the upscale category was flat, and the mid-price segment gain was insufficient to raise total extended stay ADR. Compared with corresponding classes of all hotels, as estimated by CoStar, the change in ADR in March was equal to or better for extended stay as a whole over the same period.