Extended stay is the place to be if you’re in the hotel space these days. Fortunately for Extended Stay America (ESA), the segment that has significantly outperformed the overall lodging industry in recent years is where the company has resided since its inception, and it’s now leveraging that singular focus and experience to accelerate its growth momentum despite an increasingly crowded market.
The Charlotte, North Carolina-based company has built the portfolio of Extended Stay America Suites to 747 properties over three brands while launching two new brands within the past few years that now total roughly 135 properties between them. Founded in 1995, the privately held company—which had been publicly traded since 2013—was acquired by Blackstone Real Estate Partners and Starwood Capital Group in 2021, soon after which current president/CEO Greg Juceam joined the company. Juceam—who joined in November 2021 as COO of ESA and has been at the helm as president/CEO since February 2022—referred to the company as “extended-stay pioneers” as he underscored some of its inherent advantages. “Nobody knows extended-stay lodging like ESA; it’s literally in our name. We’re focused on being three brands not 30, and we’re solely focused on the economy and midscale end of the [extended stay] market. Because of that our team wakes up every day thinking only about these market segments. Whereas some of the global conglomerates, despite their best efforts, are always going to be conflicted with their time and energy because their focus needs to be shared with their transient, group, and higher-end properties,” he said.
Another point of differentiation for the company is the fact that it owns more than 600 of the assets in its brand portfolio. The company entered the franchising space some five years ago while many of its branded competitors have taken an asset-light approach, opting to get out of the ownership side of the business altogether.
“It’s absolutely a differentiator for us. I think owners and hotel investors alike appreciate the fact that when we change a brand standard it’s only done because we’ve already vetted it and piloted it at our owned and managed hotels, and we’re convinced that there’s a return on investment,” said Juceam.
The CEO acknowledged the increased competition that has entered the extended-stay segment during the past year alone, but remains confident in the company’s track record and offering, particularly with regard to its core ESA Suites brand.
“Our longstanding brand is doing what it always does: it’s performing incredibly well. We’ve grabbed a lot of market share over the last few years. If there are a lot of brand entrants that come into this upper-midscale space, it just shows the resiliency that our core brand can have for decades to come, because there’s a value proposition for both guests and for hotel investors,” he said. Mark Williams, managing director, franchise development, ESA, reinforced the point and explained that length of stay is a key differentiator for the company.
“If you look at the other brands that have had properties in this segment, they don’t focus on what we focus on, which is a 20-plus night length of stay. Our length of stay of 30-plus is phenomenal, and they’re more transient-related regarding the stay. When you look at ESA, our length of stay is what drives this company because our occupancies are high,” he said.
ESA Suites offers an occupancy of 74.8 percent, as well as an ADR of $75.61 and RevPAR of $56.56, according to the company.
Juceam—who was president/CEO of G6 Hospitality before making the move to ESA—discussed the culture he’s fostered and the company’s evolving objectives while emphasizing it has long been blessed with a positive work environment.
“What I think I’ve brought to the company in terms of evolving the culture moving forward is a clear message that our purpose and our genuine goodness need to permeate throughout all aspects of the company. We’ve pivoted over the last five-plus years from being a company that serves the guests that are in the hotels we own and manage to a much more dynamic constituency. For example, today we talk about having a responsibility to serve our associates, to serve our growing franchise partner base, to serve the communities in which we operate, and also the industry at large,” he said. That evolving culture has helped draw additional talent from throughout the industry. As an example, Elizabeth Uber joined the company as COO in December from Aimbridge Hospitality, where she served as SVP, operations. Uber is responsible for all operational and asset management functions with ESA.
“I was so excited that she was available to come into our brand. She’s one of the few operations leaders in the industry that came out of the top line,” he said, referencing her revenue management and sales background both at the corporate level and property level.
In November, ESA also added John LaPlante as chief information officer from G6 Hospitality, where he served in the same role. LaPlante is responsible for all technology-related functions with ESA. Juceam emphasized that technology has become a key focus for the company.
“I can’t think of any single department at ESA whose key initiatives aren’t all tied to technology in one way or another. All good brands need to embrace technology, and we’re no exception to that. I would tell you that the IT leaders that have been at the company for decades now have told me that we’ve never been busier in technology. We’ve done some incredibly heavy lifting on key infrastructure initiatives that are paving the way for our future,” he noted. Some of that heavy lifting includes material improvements to the company’s website, using AI throughout its commercial platform, and migrating labor-planning tools for its hotels to a digital platform. Juceam also noted that the company is implementing additional data optimization tools and upgrading its CRS platform as well as its PMS, which will now include real-time property performance.
In conclusion, Juceam offered his outlook for the company five years down the road.
“I’m confident we’re going to see continued outperformance by our three brands in their respective segments, and there will be a larger Extended Stay America in terms of overall property count. I believe we’re going to see a growing percentage of franchise properties, and we’re going to have a competitive product across all three of our brands. Lastly, we’re fanatical about having this value proposition for both our guests and franchisees, and that will continue to be at the forefront,” he stated.
