Lessons from Select-Service and Extended-Stay Success

I’ve been working with the hospitality, tourism, and real estate industries for over 30 years—long enough to see boom and bust cycles, disruptive shifts, and new consumer behaviours emerge.

But one thing remains consistent: the industry is constantly reinventing itself.

Right now, select-service and extended-stay hotels are leading the charge, outperforming full-service hotels (those with large staff, restaurants, and high overheads) across the U.S. and beyond.

Select-service hotels offer a balance between affordability and amenities, providing limited on-site services like a small restaurant or grab-and-go meals, but without the full-scale dining and concierge services of luxury hotels.

Extended-stay hotels cater to longer-term guests, featuring kitchenettes, laundry facilities, and home-like comforts, making them ideal for business travellers, relocations, and project-based workers.

This isn’t just an American trend. Australia’s hotel market is undergoing a transformation too.

And if you’re in the hospitality industry—or even outside it—there are lessons here for every business about resilience, adaptation, and anticipating customer needs.

Why Select-Service and Extended-Stay Hotels Are Winning

Strong Performance & Demand Growth

• In the U.S., Revenue Per Available Room (RevPAR) hit $78 in 2024, up 14% from pre-pandemic levels.
• Extended-stay demand grew by 232,000 room nights year-over-year, almost fully recovering to pre-pandemic highs.
• Australia’s hotel market is valued at AUD 6.74 billion in 2024 and is forecast to grow at 11.9% CAGR, reaching AUD 17.23 billion by 2032.

Why does this matter?

Because travellers aren’t choosing hotels the same way they used to.

The ‘one-size-fits-all’ model is fading.

People want options that suit their evolving lifestyles and work habits.

What’s Driving the Shift?

The Rise of “Bleisure” Travel

Business + Leisure = Bleisure. More corporate travellers are tacking on leisure days to business trips. They want affordable, flexible stays that offer kitchenettes, workspace, and lower costs than luxury hotels.

️ Corporate & Construction Demand

Extended-stay properties are gold for companies moving staff for long-term projects. These workers need home-like amenities without the high costs of full-service hotels.

Investor Confidence & Liquidity

Since 2021, select-service and extended-stay hotels attracted $62.6 billion in investments—double the previous four years. Investors like this model because it’s efficient, scalable, and resilient against inflation.

Australia: Following the Trend with Local Twists

Surge in International Travel

• Visitor nights in Brisbane, Perth, and Adelaide have already surpassed 2019 levels.
• Sydney is almost there, sitting just 1% below pre-pandemic figures.

️ Who’s Dominating the Market?

• Meriton now owns 6,200+ hotel rooms across 23 properties, cementing its position as Australia’s biggest hotel operator.
• Smaller boutique chains and independent hotels are also thriving, using tech and targeted marketing to attract the right guests.

But It’s Not All Smooth Sailing

• Business insolvencies in Victoria have surged 71%, driven by cost-of-living pressures and ATO debt collections.
• The lack of major events in some states is slowing hotel occupancy, making event-driven travel a key strategy for growth.

Case Study: Pivoting from CBD Central Business District to CLD Central Leisure District

I’ve always believed that radical thinking and future foresight are key to staying ahead.

One of the most important shifts I advised on early in the pandemic was the decline of traditional CBD (Central Business District) reliance and the need to pivot to Consumer Leisure Districts (CLD).

I worked with a large hospitality group in Victoria that had been heavily reliant on CBD locations.

Before COVID-19 hit, I had already been warning that CBDs were struggling, with office occupancy declining and shifting work patterns.

When the pandemic accelerated this shift, I advised that waiting for business travel to recover wasn’t an option.

Instead, we needed to broaden our offerings, reposition properties, and create experiences that attracted leisure travelers, remote workers, and local communities.

We focused on reimagining spaces, expanding into regional areas, and creating multi-use locations that could serve multiple purposes—from remote work hubs to event spaces to short-term apartments.

The result?

Increased market share, higher occupancy rates, and stronger financial performance in suburban and regional properties while competitors struggled with empty CBD properties.

This shift isn’t just about hotels.

It’s a broader lesson in understanding consumer behaviour, adapting ahead of the curve, and thinking beyond the traditional business model.

What This Means for Hospitality (And Beyond!)

Lesson 1: Stay Agile
Industries that cling to outdated models struggle. Hotels that adapted quickly to changing guest preferences are now thriving.

Lesson 2: Prioritise Customer Needs Over Legacy Systems
Success isn’t about bigger, shinier hotels. It’s about offering the right product, at the right price, to the right customer. That applies whether you’re running a hotel, restaurant, retail brand, or even a consulting firm.

Lesson 3: Efficiency Wins
Low overheads, lean operations, and tech-driven efficiency are what make select-service and extended-stay hotels so profitable. Any business can apply this principle to increase margins while keeping customers happy.

Final Thought: Let’s Talk Hospitality’s Future

I’ve been advising hospitality brands, developers, and investors around the globe for decades.

I’ve seen trends come and go.

But right now, select-service and extended-stay hotels aren’t just a trend—they’re a fundamental shift in how we think about accommodation.

If you’re in hospitality, real estate, or even another industry that wants to learn from this success, let’s chat.

Need foresight on your next move?

I offer keynotes, workshops, and consulting on the future of hospitality, real estate, and consumer behaviour and so much more.

Let’s plan your next steps together.

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