Pearson New International Edition International pcl tp indd 1

Extended-Stay Hotels
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Too many hotels within segment. When the first extended-stay hotels were
developed in the mid 1980s, they met with immediate success. The next 15
years saw tremendous building and development within the segment, and in
many areas, the segment became overbuilt. Two factors have caused a virtual
halt to the extended-stay segment’s growth in revenue per available room
(RevPar) during the early 2000s: (1) the tragedy of September 11, 2001, and
its resulting impact on travel, and (2) development of so many brands that con-
sumers had difficulty recognizing which represented an extended-stay alterna-
tive. Hotel owners and managers in this market segment will likely have diffi-
culty in finding markets that are not overbuilt and in locating lenders willing
to risk financing.