LOS ANGELES — More brands entering the extended-stay space means more competition for Extended Stay America, but ESA's President and CEO Greg Juceam said that’s proof of the segment’s strength.
In a video interview with HNN at the Americas Lodging Investment Summit, Juceam said it’s an exciting time to be in the extended-stay space as it’s been outperforming for nearly 30 years.
“This is our moment in the sun,” he said. “Finally, people are recognizing that, and the fact that people are adding brands to our segment tells us that there’s demand and validates the model that we already know is successful.
“On one hand, you don’t love new competition. On the other hand, it just validates the segment.”
ESA was the pioneer in the extended-stay hotel space, Juceam said. It started nearly 30 years ago, and it’s had a lead since the first day and still is in pole position for the segment, he said.
Over the years, the company's executives have learned there is still unmet extended-stay hotel demand. For the first 25 years of ESA, it only had one brand that straddled the midscale and economy chain-scale segments. As other brands entered the space and executives studied demand patterns, ESA saw opportunity for a brand that could operate fully in the midscale segment as well as one in the economy segment, Juceam said.
As of 2023, ESA's Extended Stay Americas Suites brand operates in the midscale segment.
Two years ago, ESA launched Extended Stay America Premier Suites, a new midscale brand. The brand started with 25 hotels that ESA owned and operated that it renovated and upgraded. Over the past several months, the company has added another six properties to the brand and has opened it up to franchising.
“We have about 60 new Premier projects coming out of the ground over the next couple of years,” he said.
In 2022, Blackstone and Starwood Capital Group, the co-owners of ESA, acquired a portfolio of 111 WoodSpring Suites extended-stay hotels for $1.5 billion. Instead of rolling those properties into its core brand, ESA decided to create a third brand, Extended-Stay America Select Suites, in the economy segment.
“We had this amazing opportunity to build this brand overnight by taking most of those 111 hotels and moving them in one day into this new brand, so we had scale immediately, and we did that with our own money,” Juceam said.
Franchisees are seeing that ESA is investing in itself and in the brands, showing that it has skin in the game, he said. Because of that, many are interested in the Premier and Select brands. The Select Suites brand in particular is popular because of general franchisee interest in the economy and extended-stay segments, which is exactly where the brand plays.
“We’ve had a very, very active past four or five months, both for new-builds and for conversions,” he said. “With three brands now, the future is bright for us to tap all that unmet demand that we previously had.”