NEW YORK (CNNfn) - As business travelers spend longer periods on the road, extended-stay lodgings (defined as five or more nights) have emerged as the fastest growing segment of the U.S. hotel market.
Frequent guests at these "home-away-from-home" hotels include a variety of business people - from consultants and auditors to employees attending training classes or relocating to a new city.
Smith Travel Research, which monitors the hotel industry, reports that the number of these hotels increased from 268 nationwide at the end of 1995 to 333 by mid-1997. And Schroder Wertheim & Co. forecasts the extended stay segment to grow at an annual compound rate of 35 to 40 percent through the end of the decade.
The industry will need those rooms. One study by D.K. Shifflet notes that extended-stay travelers make up approximately 30 percent of daily room demand, which is more then 11 times current supply.
In order to remedy the shortage, hotel chains have embarked on ambitious construction projects that will more than double extended-stay room capacity from just over 100,000 rooms to 230,000 by the year 2000.
Leading the pack: Residence Inn, which coined the term "extended stay" when it opened its first hotel in 1975. With an impressive 86 percent occupancy rate last year, the chain now has 235 Residence Inns nationwide and a total of 27,500 rooms.
The success of Residence Inn has spawned development of other upscale chains, such as Homewood Suites, Woodfin Suite Hotels and Summerfield Suites which offer a similar product.
A key appeal of these upscale accommodations is extra space. While the average size of a hotel room is 380 square feet, extended-stay studios and suites range from 460 to 730 square feet. Each suite is divided into separate living and sleeping quarters and comes with a fully equipped kitchen and an ample work space with multiple phone jacks.
Other features typically include daily housekeeping, linen service, continental breakfast buffet and grocery shopping. Guests also receive complimentary cable TV, feature movies and free daily newspaper. A swimming pool, whirlpool spa and exercise room are also usually available.
Considering all those amenities, the nightly rates - ranging from $75 to $112 - seem quite reasonable. But if your budget is more limited, there also a growing number of midscale ($45-$70) and economy (below $45) segments.
Studio Plus, Candlewood Suites, Sierra Suites and Hawthorn Suites are some of the key players in the midscale category while Extended Stay America leads the economy segment. For all three categories, a longer stay means a lower room rate.
-- Jonathan Siskin