HomeTowne Studios rooms feature full kitchens with refrigerator, stove, microwave, and the option to … [+] purchase cooking utensils.
Red Roof, a long-time staple brand in the economy lodging industry, entered the extended stay market in 2018 and has seen “exceptional potential” in the segment, according to company officials. The HomeTowne Studios by Red Roof brand currently has 58 properties open with ten more expected to open this year.
Red Roof’s chief marketing officer Marina MacDonald points out that demand has only grown since the start of the pandemic. This year’s new property pipeline represents a 17 percent growth in footprint.
The new lobby prototype for HomeTowne Studios includes communal seating areas and complimentary … [+] coffee.
Lodging Econometrics data shows that extended stay properties make up more than a quarter of all hotel development projects in the U.S. pipeline to meet the growing demand for the segment. And STR metrics show that HomeTowne Studios by Red Roof outperformed the economy lodging segment by 29.7 percent (April-June 2020) and 15.8 percent (July-September 2020).
Chief development officer for Red Roof Matt Hostetler says that economy extended stay hotels are among the most profitable hotel categories, which is an indication of why the segment is performing so well.
Strong travel demand remains
Many hotels are conversions from other brands, and they feature lobby seating areas.
Despite the Covid-19 pandemic stifling travel demand, the market for extended stay properties remains healthy since it caters to a wide variety of travelers. HomeTowne Studios says its primary guest demographic has changed as a result of the pandemic, but the demand remains extremely resilient to economic conditions.
According to the Highland Group, the economy-focused sector of extended stay hotels suffered less revenue loss than any other segment of the lodging industry in 2020. During the initial months of the pandemic, when most communities were locked down, HomeTowne Studios achieved more than 80 percent occupancy across its hotels.
Guests include a mix of residents displaced because of an economic loss resulting from the coronavirus and essential workers (including health care professionals) who do not want to risk taking the virus home or want to live closer to the hospital where they’re needed.
The prototype for new HomeTowne Studios new-build properties shows a modern, residential look.
The extended stay segment also sees strong demand from project-based industries like construction, health care, and utilities. It attracts professionals relocating for longer periods of time, those moving to a new area and waiting for a home to be built, and family members of patients in nearby medical facilities.
In addition, the construction industry, which is a major demand generator, has continued while business and leisure travel remains depressed.
Extended stay hotels can also attract local residents that need in-between housing without the need of having to pay a first and last-month’s rent deposit. It also supports people looking for temporary accommodations supported by government agencies or insurance companies.
Since room rates are relatively low and often below government lodging per diems, the segment remains healthy while others are seeing less demand.
What sets HomeTowne Studios apart from competitors
Red Roof and HomeTowne Studios operate a dual-brand property in New Castle, Delaware with shared … [+] amenities like outdoor pool and laundry area.
There are several points of differentiation that cement HomeTowne Studios in the economy segment when compared with extended stay competitors, which typically operate at a higher price point. HomeTowne Studios does not offer complimentary breakfast, and housekeeping visits weekly rather than daily. This helps to keep the price competitive for value-conscious travelers.
In-room kitchens and dining areas provide substantial benefit for long-stay guests.
In-room kitchens are convenient with the option to purchase a dining kit that comes with a set of cooking ware, plates, serving utensils, and other items that guests can keep following their stay. The kitchens come with full-size refrigerator, sink, microwave, coffeemaker, and kitchen table with chairs.
Guest bathrooms feature Red Roof-branded toiletries.
The company tapped expertise from existing hotel owners and a handful of VIP guests to help design the new rooms. They feature plentiful power outlets in convenient places including by the beds, kitchen countertops, and dining table. Open-plan storage space and faux wood flooring are other unique features, which are easier to clean and maintain over time.
The new lobby design for HomeTowne Studios properties.
The company’s new hotel prototype features larger lobbies with communal work spaces and complimentary coffee. The studios in these newer properties will feature three-drawer dressers and under-bed storage, which are both important for people staying for longer periods of time and needing more space for belongings.
Extended stay will continue to be an important hospitality sector, and Red Roof’s entrance into the marketplace shows that it can be successful even at a value-focused price point.