We finally know the name.
Back in June, Marriott International (MAR) -) said it planned to move into the “affordable midscale” hotel category.
The brand was undisclosed at the time, but the company said it would be targeting people looking for extended stays, 7 to 30 days.
DON'T MISS: Walt Disney quietly sends a sharp (DeSantis-related) warning
Smart move, seeing as how the extended-stay market has been looking pretty healthy lately.
The U.S. hospitality industry had 51.5 million extended-stay room nights available in the first quarter of 2023, up 43% from 2016, according to a report the consultancy Highland Group provided to Axios.
Extended-stay room revenue totaled $4.37 billion in the first quarter, up more than $2 billion from the same period in 2016.
Extended-stay hotels resilient
These hotels were particularly resilient during the pandemic because they did not rely as much on transient travelers as traditional hotels do.
Marriott names its latest brand StudioRes https://t.co/el9yS5bdtE pic.twitter.com/VAcAcl9Tvg
— Sharyn C. Ahmad - Ready For Real Estate (@SharynCAhmad) August 11, 2023
Lodging Econometrics has reported that nearly a third of the construction pipeline for hotels in the U.S. is set to be extended-stay projects.
And Marriott is hardly alone in this particular arena. Hilton Worldwide (HLT) -) and Hyatt Hotels (H) -) have also introduced extended-stay brands.
Marriott Chief Executive Anthony Capuano seemed awfully excited about the idea, which is the company's 32nd brand.
"Our deep experience and leading position in extended-stay lodging, coupled with the recent trends towards increasing work flexibility and longer-stay travel, make us very optimistic about our growth potential," he said during Marriott's second-quarter-earnings call.
"While it is still early days, initial interest from the development community has been extraordinary," he said on Aug. 1. "We are working on several hundred deals and hope to have our first deal signed by the end of this year."
The new brand was previously referred to as Project MidX Studio, but that doesn't sound like the catchiest name in town.
A 'crucial role' in expansion: StudioRes
So Marriott is calling its latest addition StudioRes and it is intended as a budget-friendly midscale offering for long-term guests, such as people in construction or traveling nurses.
The company projects an average daily rate of roughly $80, with revenue per available room -- RevPar, a closely watched industry benchmark -- estimated at around $65.
Guest suites will feature single or double queen-size beds as well as kitchens and an abundance of storage areas. Common areas will include guest laundry facilities, a gym, pay-and-go retail spaces and pet-friendly spaces.
"The affordable midscale segment plays a crucial role in Marriott's future expansion," Leeny Oberg, chief financial officer and executive vice president of development at Marriott, said on LinkedIn. "We are thrilled to unveil further elements of our diversified and regionalized approach in the upcoming months."
Marriott’s other extended stay brands include Residence Inn, Element by Westin, TownePlace Suites, Marriott Executive Apartments and Apartments by Marriott Bonvoy -- all of which operate at higher price points than StudioRes.
The company expects the first StudioRes property to open in late 2024 and is "in discussions with owners for several hundred development opportunities in markets across the U.S. and Canada."
Hotel developer Concord Hospitality, which is based in Raleigh, N.C., expects to break ground on three StudioRes hotels later this year and open the first as early as sometime next year, the Points Guy reported.
- Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
