Extended-stay demand strengthened in Q1 2026, while rate growth remained limited.
For developers, market demand is only part of the picture. Room layouts, shared spaces, building systems, staffing needs, and construction costs still need to support the operating model.
Demand Outpaced Supply Growth
U.S. extended-stay hotel demand increased 5.4% in Q1 2026, its strongest quarterly growth since Q1 2022. Supply increased 4.6%, giving demand a 0.8-percentage-point growth advantage. All three extended-stay price segments recorded their highest first-quarter demand levels.
A 0.8-point demand advantage can support occupancy, but it cannot rescue an overbuilt concept.
Room Revenue Grew While Rate Growth Stayed Limited
Extended-stay room revenue increased 5.8% in Q1 2026, while ADR increased only 0.4%. This shows that stronger demand, rather than higher rates, drove most of the revenue growth. When rate growth is limited, inefficient layouts, complicated systems, and overbuilt amenities become harder to pay for.
Longer Stays Change Design Priorities
Bookings of seven nights or longer account for 70% or more of extended-stay hotel demand.
Longer stays increase the importance of storage, kitchens, laundry, acoustics, housekeeping, and maintenance. These decisions affect guest experience, staffing, and long-term operating costs.
BASE4 Designs Around the Operating Model
BASE4 coordinates the building around the room program, brand standards, staffing assumptions, building systems, and budget.
Why developers work with BASE4:
- Architecture, structural, MEP, and interiors are coordinated under one team.
- Revit coordination helps identify conflicts earlier.
- Hotel experience helps right-size rooms and shared spaces.
- Cost-aware design avoids unnecessary complexity.
- Prefab planning can reduce field labor and schedule risk.
A Selection of Some of Our Projects
Thank you,
Blair Hildahl
Blair@hotelsuniversity.com
608.304.5228