Expanding the Brand: ESA Reaches Out to New Market

Bruce Haase President and CEO of Extended Stay America

Bruce Haase, president and CEO of Extended Stay America (ESA), is aware that much of the industry is still reeling from the pandemic, but sees an opportunity to provide a different market of extended-stay travelers with a fresh product with the amenities they value most at a slightly higher price point. Here, he describes for LODGING the how’s and why’s behind the decision to upgrade a portion of ESA’s core brand into Extended Stay America Premier Suites, which is set to launch in Q2 2021.

How was ESA impacted by the pandemic, especially now that it’s been a full year?

We’ve been fortunate that the pandemic did not force us into survival mode due to the nature of our business and our ability to quickly pivot as extended-stay demand drivers changed. All of our hotels remained open during the pandemic, and we were not forced to resort to widespread layoffs or seeking emergency financing. We demonstrated how resilient this business is under extremely difficult market conditions. Our occupancies reached pre-COVID rates in summer of 2020, providing us with an opportunity to manage rates.

So, what made now the right time to launch the Premier Suites brand?

I always start with the consumer. We really looked very carefully at extended-stay consumers across different segments of the market—what they needed most, what they valued, and what they were willing to pay for. We also wanted to know what they thought about the Extended Stay America brand. What was really interesting was learning that, in terms of how people view our brand and how likely they are to use it, our brand equity was extremely strong across all segments and price points. We saw our brand could stretch beyond where we were today. We also saw an opportunity to reposition some of our best assets in high RevPAR markets with significant corporate extended-stay demand. This company has some fantastic real estate positions and properties, and locations that are irreplaceable. Between the strength of our brand and the strength of our real estate, we realized there was an opportunity to reach new customers and drive rate at our highest potential assets. As we saw it, we could be true to our brand, which had so much equity, but increase its appeal to a different segment by creating a highly renovated product and adding a few amenities that customers valued most. Where we landed was Extended Stay America Premier Suites.

What is your plan as far as retaining the original brand and adding these new properties?

Our new build and highly renovated product has a very different look and feel from our legacy assets. This is an opportunity to position those assets differently to ensure they get the ADR they deserve. Our plan is to reposition some of our existing assets into the new brand, in addition to new construction hotels developed by our franchisees. We’re planning to launch Premier Suites in Q2 with a total of 32 company-owned hotels that are either new build or highly renovated.

What has the response been from the development community?

These are early days. We talked to our existing franchisees, and we have a significant pipeline of interest. But we consider this to be a great option for the development community that didn’t exist before. We believed we needed a new brand to attract different customers, but it’s still ESA. So for developers, they get the best of both worlds, a new brand that reflects the quality of the new product and the tremendous equity in the Extended Stay brand.

What do you consider most exciting about the new Premier Suites launch that you want everyone to know?

I think it’s really exciting that in a year, we’ve moved from a single-brand owner/operator mentality to a multi-brand platform in the best segment in the industry. We see potential opportunities in the future to continue to grow that multi-brand platform, starting with renovating some of our properties to a higher standard as Premier Suites.

Would you consider branching out into segments other than extended stay?

Absolutely not. We are good at what we do, and we’re going to continue to be better at it. What I like about our segment and our company is we really don’t have any direct competition. All of the other extended-stay brands are housed in transient-brand families, so their focus is delivering transient business, not extended-stay business. We understand that the economics of this business is different, the way you market this business is different, and the way you operate the properties is different. So, we’re going to stick to what we’re really good at. I think it’s a huge competitive advantage.


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