Photo: Sonesta ES Suites
It’s a lodging category often forgotten by travel agents because it only represents about 8% of the total rooms available in the United States.
But extended-stay lodging is a critical component for corporate travelers working on long-term projects. And because of its unique business model, the category is often a forgotten value option for weekend family travelers.
Consumers spent nearly $10 billion at U.S. extended-stay hotels in 2015, said Mark Skinner, partner at The Highland Group, an Atlanta-based lodging consultancy that specializes in the extended stay category. It’s the fastest-growing segment in terms of lodging demand, scoring reliable double-digit revenue growth the past five years, and up until recently, has been able to raise daily rates annually at a higher year-over-year percentage than other hotel categories.
“It’s a very good market for lodging companies to be in,” Skinner said.
Sonesta International Hotels Corp. agrees with Skinner, and is investing heavily in extended-stay hotels in the United States. The company, more known for its upscale Royal Sonesta resorts and corporate hotels, has been acquiring individual properties and small extended-stay portfolios the past five years, with an eye on renovating older properties and providing an updated value option to business and leisure travelers in suburban locations.
Today, Sonesta owns 27 extended-suite properties, up from 16 hotels in 2012. All of the hotels are existing properties, often 20 years old or older, so Sonesta is applying a modern and fresh redesign of the rooms and public spaces to attract both Millennials working on long-range corporate projects and young families looking for a good-value weekend.
Most of the hotels have one- and two-bedroom suites, and studio suites. Some, like the renovated Residence Inn properties, are duplexes.
“The aesthetic we’re trying to achieve is casual, welcoming, surprisingly different,” said Michael Wohl, Sonesta operations vice president. For example, the chain has converted the lobbies from spaces that almost exclusively focused on guests availing themselves of the daily complimentary breakfast and evening hors d'oeuvres. Now, lobbies include a space inviting business travelers to gather, or collaborate on work, or for families to play games.
Miele, Inc., a global company that manufactures appliances, hosts on average 10-12 technicians a week, for two- or three-week stints, at the newly renovated Sonesta ES Suites in Princeton NJ. The technicians, undergoing training to service Miele appliances, average between the ages of 21 and 35.
Once Miele employees stay at the Sonesta ES Suites, said senior administrative assistant Kathleen Collazo, they don’t want to stay anywhere else when they return for additional training. “Our travelers call it a home away from home,” she said.
Like all Sonesta’s U.S. properties, the Princeton hotel has a swimming pool, outdoor barbeque area, small gym, free WiFi, and a food pantry offering up a range of products from detergent to salad dressing. The lobby has a space called “the pour,” where a guest can order a beer, mixed drink, or fruit smoothie made to order. “We find that a lot of our long-term business guests feel lonely, and want to talk to our staff,” Wohl said. “So it’s natural for them to come, chat and have something to drink.”
Weekday rates for a two-bedroom suite with two bathrooms this fall run $219-$249 a night in Princeton; one-bedroom suites are $169 and up. For a two-night weekend stay for a family of five, those two-bedroom suites run $169-$199 a night.
“We get lots of families booking our hotels on the weekends, for a local break with a swimming pool,” said Lorie Juliano, corporate director of communications. “A family can have two rooms for the price of one, free breakfast, and mom and dad can even have an evening barbecue, so they don’t have to take everyone out to a more expensive dinner at a restaurant.”
Sonesta is beginning to reap benefits from its strategy. According to Wohl, the Sonesta ES brand is capturing 16% more market share than the share of rooms it has in the marketplace. Other major players in the category include Hyatt’s Hyatt House brand, and Marriott’s TownePlace Suites and Residence Inns.