In 2024, hotel companies expanded in the evolving upscale extended stay space with apartment-style accommodations.
Marriott International grew its Apartments by Marriott Bonvoy brand and inked a strategic licensing agreement with Sonder Holdings, adding its 9,000-room portfolio of primarily apartment-style accommodations in urban markets. Wyndham Hotels & Resorts, meanwhile, linked up with residential hospitality management company Reside on a 10-year development relationship that debuted the hotel company’s residences tier domestically.
While the extended stay category has gained momentum in the years following the pandemic, many hotels in the category fall within lower-tier segments. Now, as traveler demand and behavior change, hotel companies are reevaluating the types of longer-stay accommodations they offer and pushing upscale.
Residence-style hotels are expected to continue to gain popularity in 2025 as guests prioritize convenience and premium amenities. To gauge how the apartment-style accommodations sector will evolve this year, Hotel Dive spoke with executives at Marriott International, Reside and start-up hospitality company Mint House. The hospitality industry leaders shared which markets are poised for growth, how adaptive reuse plays into development strategies and why brand deals pose a big opportunity for growth in the space.
Changing demand
The pandemic was a catalyst for more travelers — and different types of travelers — demanding flexible, longer-stay accommodations, Mint House CEO Christian Lee told Hotel Dive. New York-based Mint House offers apartment-style short-term rentals in buildings with hotel-style amenities.
“COVID changed everything,” Lee told Hotel Dive, noting that, in the wake of the pandemic, the hospitality industry was forced to figure out how travel trends and habits had changed and how hybrid and remote work factored into how consumers travel and choose lodging.
First, there was the emergence of digital nomads staying at extended stay properties for weeks or months at a time, Lee explained. There was “a huge increase in the length of stay,” he said.
Then, as that trend began to recede, revenge travelers embarked, he noted. As time progressed, business travel began to resurge for in-person events and meetings. And for business travelers, specifically, apartment-style accommodations became an ideal lodging option because they provide “all the comforts of home,” with a place to work, do laundry and cook, while also having the luxuries of hotels — like security and a space that is professionally cleaned, Lee said.
Reside CEO Lee Curtis told Hotel Dive that the furnished apartments for more transient stays “has caught the attention of the traveler and the business person.”
“Post-COVID, there’s a type of traveler, whether it’s leisure or business, that finds great value and comfort in something that isn’t a hotel room, but has hotel-type amenities,” Curtis said.
Traveler demand for higher-end offerings in the extended stay space is what led Marriott to launch Apartments by Marriott Bonvoy in the U.S. in 2022, Marriott Global Development Officer, U.S. and Canada Noah Silverman shared with Hotel Dive. The brand offers premium and luxury apartment-style accommodations with private bedrooms, a separate living room, a full kitchen and a washer and dryer.
There was “very clearly a growing segment of consumers” looking for extended stay accommodations in the premium and upper upscale tier, Silverman said. “Apartments by Marriott Bonvoy [is] … a perfect marriage of two segments of hospitality that have been growing and have been successful.”
Fast forward to present day, and extended stay remains the “darling” of the hotel industry. And hotel companies across the board are expanding to higher chain scales, which are forecasted to see the most RevPAR growth this year and beyond.
Growth trajectory
In the apartment-style hotel space, Marriott sees the strongest opportunities for growth in urban or dense suburban markets as well as resort destinations, according to Silverman.
Urban markets will cater to business travelers looking for longer-term accommodations, whereas resort markets will capture multigenerational and group demand, he noted. Experts told Hotel Dive earlier this month that multigenerational travel will ramp up in 2025.
The 80-acre family-friendly Villatel Orlando Resort near Universal Orlando opening in March will include an Apartments by Marriott property. Additionally, Marriott is currently working on converting a multifamily property in Savannah, Georgia, to one of the first Apartments by Marriott properties in the U.S.
Wyndham and Reside are similarly targeting urban markets, with Reside’s Curtis saying the partnership is focused on growth in the top 50 U.S. metropolitan areas. Under their new brand, Reside, a Wyndham Residence, the companies have opened hotels in Seattle, Houston and Washington, D.C.
Converting multifamily buildings to apartment-style hotels will be a means to expand in the sector, according to Silverman. For Apartments by Marriott, this could be a full-property conversion or a partial conversion, in which select units in a multifamily building are converted to hotel rooms and the concepts operate in tandem.
Silverman told Hotel Dive in December that one of the top hotel development trends in 2025 will be conversions, including multi-unit conversions and adaptive reuse.
Perks of pairing up
Brand partnerships will continue to be a desirable way for hotel companies to grow in the apartment-style hotel sector through mutually beneficial deals, according to Curtis.
Reside, for example, can help Wyndham expedite its entry into the upscale extended stay segment because of its expertise in the space, Curtis said.
“Wyndham is [one of] the biggest hotel franchisers in the world. They could have created a brand and focused in on the multifamily side, but they understand it’s a little more complex, because it requires some nuanced approaches to taking on multifamily products and converting them into a hotel-style product,” Curtis said.
On the flip side, Wyndham offers Reside the loyalty and distribution perks of a large-scale brand with more than 110 million loyalty members, Curtis noted.
“You can’t out-brand a brand,” Curtis said. “In hospitality, comfort and peace of mind are at the top of the heap, and brands have done a great job of creating that reality.”
Mint House’s Lee echoed a similar sentiment, saying that a perk of big hotel brands is their unmatched loyalty capabilities. “They have these huge email platforms, huge membership loyalty programs, so they’re really able to talk to a broad audience pretty efficiently,” Lee said.
In the case of Marriott and Sonder’s tie-up, Sonder properties now participate in the Marriott Bonvoy loyalty program, which leads other major hotel companies by membership with more than 200 million members.
The properties are available for booking on Marriott Bonvoy channels and have access to Marriott’s global sales organization, so they are marketed like any other Marriott brand. This is expected to drive heightened demand to Sonder hotels and ultimately increase RevPAR, Sonder detailed in an August release.
“[Sonder] presumably saw us as a powerful distribution platform to help grow their customer base and vice versa,” Silverman said, adding that Marriott likewise has the ability to convert some Sonder loyalists into broader Marriott Bonvoy consumers as well.
For Marriott, the deal expanded its foothold in the apartment-style hotel space with a brand that is complimentary to Apartments by Marriott Bonvoy, but distinctive enough in certain ways, Silverman said.
“Sonder had a lot of serviced apartment product within their inventory, but they also had product that was more akin to traditional boutique hotel-style product,” Silverman added. “Sonder allowed us to grow into both of those spaces.”
Marriott will continue to consider brand acquisitions or strategic partnership for growth across the apartment-style hotel sector, though the company doesn’t have any deals in the works at this time, Silverman said.
This strategy applies across Marriott’s portfolio, he noted, pointing to the company’s recent acquisition of Postcard Cabins and strategic licensing agreement with Trailborn.
