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Come in and stay a while. A long while.

America's two biggest hotel chains -- Marriott and Hilton -- are fighting over a newly prioritized corner in the hospitality space: extended-stay hotels that cater to guests seeking weeks-long visits. The lodging class, highlighted in a Wall Street Journal report on Tuesday, is among the hottest in the post-pandemic, work-from-anywhere world.

Rest & Relaxation & Remote Work

Both chains are in the midst of launching new, yet-unnamed extended-stay brands due for sometime next year, according to the WSJ. Consider them something of a counter to the more-homely amenities found in AirBnB's and Vrbo's, with the extended stay hotel rooms typically featuring larger floor plans, full-sized refrigerators, cooktop stoves, and in-unit dishwashers -- at the expense of regular housekeeping and robust room service menus. That means fewer full-time employees, reducing overhead costs.

"You have all the things you need to work, sleep, eat," Hilton CEO Chris Nassetta told the WSJ. Perhaps unsurprisingly in a new world where work trips and leisure trips can go hand-in-hand, extended-stay properties have exploded in popularity. And, crucially for brands like Hilton and Marriott, the economics are irresistible:

  • In 2022, extended-stay hotels scored occupancy rates of nearly 75%, well above the 63% rate of hotel rooms overall, according to hotel-data tracker STR.
  • Both chains will offer cheaper nightly rates for extended stays, with Marriott targeting $80 a night and Hilton targeting around $100 a night -- compared to the $149 average daily rate for US hotel rooms last year, according to STR. 

Nassetta said the brand would likely be "one of the--if not the--most profitable brands on a pure margin basis that we have."

Extra Competition: Hyatt, too, is beefing up its extended-stay offerings via its new "Hyatt Studios" brand, though that will likely be marketed as a premium chain with a higher price point than the Marriott and Hilton lines. 

On the Road Again: Extended stay hotels are likely to be recession-resilient, Jan Freitag, national director of hospitality analytics firm CoStar, told the WSJ, due to the constant demand for extended stays from demographics like construction crews, travel nurses, business consultants, and other dislocations and relocations. As long as there's some work and some play, we don't foresee any issues.