Last year, extended-stay hotels reported some of the highest occupancies, according to research from STR. That’s no small feat during a global pandemic, when the industry saw many hotels closing their doors for months. According to the hotel data company, the segment also maintained its occupancy premium over other types of hotels, even as the industry’s overall occupancy dipped in January 2021 amid a second COVID-19 wave. During that time, extended-stay hotels averaged occupancy 20 points higher than non-extended-stay hotels.
Contributed by Kelly Poling, chief commercial officer, Extended Stay America
While the pandemic set forth many new challenges for extended-stay hoteliers, it also presented several opportunities for lessons learned. Following are four things that changed for the segment, the lessons Extended Stay America learned as the leader in this segment, and how extended-stay hoteliers can use these insights to continue to future-proof their commercial approach.
- The changing guest profile
What’s changed: The pandemic opened up new opportunities for extended-stay hotels in terms of targeting guests. Essential workers—such as frontline healthcare workers and government and military personnel—created an increased demand for both short- and long-term housing solutions to support pandemic relief efforts. Additionally, with the importance of social distancing, many colleges and universities had to reduce the number of dormitory rooms available for student housing. Extended-stay hotels became viable housing options for students. Extended Stay America was able to close deals with close to 30 colleges and universities during the height of the pandemic.
Lessons learned: Agility and creativity in marketing and sales efforts are crucial to adapt quickly. The world will continue to change, and new guest segments will emerge. For instance, the work-from-home workforce has given way to “digital nomads.” Extended-stay hoteliers should identify and provide solutions for these new and diverse customer segments—and remain flexible in marketing and operations to cater to new demand.
- Shifting guest wants, needs
What’s changed: The pandemic has put an unprecedented focus on guests’ need to feel safe and well cared for, as cleanliness has become one of the most important reasons guests will book.
Lessons learned: Hotel brands already had robust cleaning processes in place before the pandemic, but they flew under the radar. It wasn’t every day a guest wanted to know exactly how their room was cleaned. Now, guests need this information to make a stay decision. It’s not enough to clean the room; hoteliers must communicate how the room is cleaned at multiple touchpoints in the guest journey—from the website, to the booking engine, check-in, in-room signage, and more.
- Revising operations
What’s changed: Communication with guests has become much more essential—whether it’s conducting daily check-in calls with guests to ensure their health and comfort, or providing guests with listings of local grocery stores and food delivery services. In a time of peak stress and anxiety, frontline hotel teams had to step up (even more so than pre-pandemic) with daily authentic hospitality.
Lessons learned: Extended-stay hotels were well-poised for creating an environment that feels like a home away from home. The ability to care for guests and make them feel “at home” will continue long after the pandemic is over, setting up a massive opportunity for extended-stay hotels to gain share from traditional hotels and alternative accommodations providers like Airbnb. And fortunately, unlike other hotel companies that have been forced to take some dramatic cost-reduction measures, successful pandemic performance has allowed many extended-stay hotels to avoid any significant staff reductions, continue to take care of and recognize associates for their hard work and commitment, and even continue to financially reward performance to bolster the employee experience.
- Increasing digital transformation efforts
What’s changed: The pandemic forced many people to turn to digital channels first. Subpar technology meant a competitive disadvantage.
Lessons learned: Digital channels have become more critical than ever. To convert lookers into bookers, extended-stay hotels need:
- a streamlined booking process, with fewer clicks to make a reservation;
- a fully responsive user experience that quickly adapts to the customer’s device, whether it’s desktop, tablet, laptop, or mobile phone;
- a simplified and welcoming homepage that puts hotel search front and center, with opportunities for brand and promotional messaging;
- improved hotel search with features including search by current location, airport, address, and expanded points of interest;
- more effective search results, with the capability to sort results by price, distance and rating, updated map view, and improved integration of hotel photography; and
- enhanced property pages with increased focus on hotel photography, room merchandising, and deals and offers.
Future-proofing for success
The lessons learned from the pandemic have allowed extended-stay hoteliers to remain focused on the future. To continue to enjoy the kind of success that drives occupancy double-digits higher than their counterparts, hoteliers must recognize the need to be adaptable and forward-thinking. With every crisis comes the opportunity to learn, move forward and thrive.