With extended stay hospitality growing fast, more brands are expanding to serve this unique market with flexible rental options to suit a variety of needs. Despite rising demand, extended stay operators must still be conservative in their pricing, which means looking beyond rate increases to maximize ROI and profitability.
Investing in prop-tech has become one of the most practical and proven ways for extended stay operators to deliver on expectations for cost, service and flexibility. Here’s why digital solutions are a smart investment for providing top-notch yet economical service.
Market Momentum: Surging Growth & Demand
With a projected 9.35% CAGR over the next five years, the extended-stay hotel market is riding a wave of growing supply and demand. Even high-end flags like Hyatt now have two brands in the market, and Marriott is working to develop its own, which helped to push the number of rooms under construction up 8% in 2024.
The recent flooding in North Carolina that affected more than 200,000 people and the Pacific Palisades fire that wiped out 11,000 homes have created an urgent need for temporary housing, and with natural disasters seemingly on the rise, no doubt that construction rate will continue. That’s in addition to the baseline demand for extended stay as a renovation respite, a transition home between moves, or temporary housing for remote workers—both blue-collar and knowledge-based.
Because of these long-duration stays, operators must prioritize efficiency to keep rates affordable and maximize profitability. For some brands, that means requiring at least a week-long stay to keep down costs associated with room turnover. Others, especially brands that will accept one- or two-night stays, must be a bit more creative to find efficiencies at every turn.
Digital-First Approach Delivers Service & Savings
Long-term stay guests need the comforts and ease of home perhaps more than in any other market, especially if they’ve been displaced. The hotel is their home: they sleep, eat, relax, work, play, and so much more on the property.
Yet, because it’s NOT their home, guests often need traditional hotel services like housekeeping, tech support, and even concierge. But with the front desk having typically limited staffing and the industry still struggling with a labor shortage, many extended stay properties rely on minimalist service akin to an apartment complex.
To fill the traditional hotel service gap at the lowest cost possible, extended stay operators are turning to digital innovations. Here’s how prop tech can deliver service and savings for the hotel.
- Energy savings you can measure. Heating and cooling unoccupied rooms creates unnecessary expense, considering the unique behaviors of extended-stay guests, which typically follow a predictable pattern. Digital energy management solutions (EMS) such as smart thermostats can dynamically adapt to reduce energy consumption while providing customized comfort. Equipped with sensors, these tools can even capitalize on ambient conditions like sunlight and exterior weather conditions to provide the most efficient heating and cooling possible.
- Tech-savvy without tech staff. Guests depend on seamless connectivity across all their devices—both work and play. But because there’s not a tech support person on staff, they often get frustrated when connectivity issues arise. While this can damage the hotel’s reputation, most extended stay operators can’t allocate the budget to have a tech support person on staff. The Passpoint standard is gaining momentum for its effortless, automatic digital authentication that remembers each device, so guests don’t have the hassle of having to manually log in to the network every time they return to their home away from home – during the same stay, different stays or even different locations of the same brand.
- Excellent service with minimal staff. Virtual concierge services that allow self-service check in/check out and access to guest services are popular options, along with mobile apps or in-room devices that enable guests to manage their account, request maintenance or housekeeping, and connect with local services like dining and activities.
- Robust Connectivity. Ubiquitous Wi-Fi infrastructure is highly economical for extended-stay properties. Going fully wireless allows for rapid expansion with minimal wiring and equipment costs. Having reliable Wi-Fi across the property allows hoteliers to add IoT devices, such as security cameras, thermostats, etc., along with other technology, including Cloud PBX phone services. All of these technologies have the opportunity to upgrade infrastructure while also saving money.
- Remote visibility and management. Many hotels are opting to remove infrastructure from the property. A cloud-based Wi-Fi network simplifies administration, allowing for remote monitoring and real-time troubleshooting of any issues on property. This alleviates the need to hire on-site IT tech support, reduces overall IT costs and improves operational efficiency, while also ensuring quick resolution to any issues. The remote team can see real-time stats on energy consumption, adjust HVAC programming and find other efficiencies in operations. This centralized view also minimizes downtime and provides consistent service quality for guests at one property or across the chain.
Proving Value with Strategic Investment
With the increase in market demand for this segment, extended stay operators are in a unique position for growth and expansion. However, in a market that operates on thin margins and the top priority is to maximize ROI, shaving pennies off operating costs can add up to a big impact on profitability.
For extended stay operators, prop tech is one of the best ways to realize and prove measurable savings, especially in the case of lower personnel cost and energy consumption.
But in order to be successful, prop tech solutions require a robust, reliable, property-wide Wi-Fi infrastructure that delivers the features operators need with the efficient digital experience guests expect, both of which are essential for extended stay properties to maximize margins.
ABOUT THE AUTHOR
With over 35 years of experience in the Hospitality industry, Mike Gray brings a wealth of knowledge and insight to his role as Global Vice President of Strategic Partnerships at Nomadix. His focus is on building deeper relationships and specialized programs for hospitality brands, management companies and ownership groups around the globe. Previously, Gray led hospitality technology efforts for NEC, BellSouth, FCS Computer Systems, Cardola USA and other resale channels. He directly managed relationships with key brands, bringing the technology and hotel worlds together to help hoteliers control costs, improve staff productivity and enhance the guest experience. He also currently serves as a board member on AHLA’s Vendor Advisory Council, AHLA T100 and The Hospitality Show Advisory Board.
