Dive Brief:
- Premium economy extended stay hotel brand LivAway Suites announced Wednesday it broke ground on two hotel properties in Richland, Washington, and Missoula, Montana.
- The hotels, expected to open in 2024, are the third and fourth groundbreakings for LivAway this year, in addition to properties in Tennessee and Utah.
- The brand says it’s “rapidly expanding” in the extended stay space as the hotel product sees strong performance and continued developer demand despite a tight lending market and other macroeconomic factors. LivAway’s portfolio growth comes amid a spree of activity in the extended space by competing brands.
Dive Insight:
With its latest groundbreakings, LivAway Suites moves the needle on its extended stay project pipeline. The brand, in partnership with sister company and developer West 77 Partners, is now underway on four hotels, including one in Nashville and one in West Jordan, Utah, that broke ground earlier this year.
Three more hotels are planned to break ground within the next 60 to 90 days, Kevin Dailey, LivAway COO, told Hotel Dive. Those properties will be located in Portland, Maine; Syracuse, New York; and the Seattle area.
According to the brand’s website, LivAway is also evaluating several projects in the Southeastern region — a hotbed for extended stay development in recent months — including in Tampa and Daytona Beach, Florida; and Charlotte, North Carolina.
While LivAway’s construction pipeline remains strong, many hotel developers have not had such luck in starting projects this year, faced with challenges brought on by an uncertain financial climate.
“Real estate development is tougher today than it was two years ago,” LivAway Suites CEO Mike Nielson said in a statement. “A combination of the Federal Reserve's interest rate hike campaign and the regional banking crisis has forced some hotel developers to cancel or postpone projects.”
Despite the current climate, Keystone National Group provided LivAway with $85 million in debt financing for its 2023 groundbreakings. The investment firm’s Taylor Jackson said it lent the capital because of the strength of the extended stay market as well as LivAway’s growth fundamentals.
With a positive outlook for extended stay, LivAway plans to continue its nationwide expansion in the space and is targeting growth markets including Chicago, Washington, D.C., and various cities in Texas, California, Florida and South Carolina. Starting in 2024, the brand plans to break ground on from 10 to 15 projects a year, all with an approximately 13-month build horizon, Dailey said.
“We're very bullish on economy extended stay for many factors,” Dailey said. “There's a reason it's the hottest, most-attractive segment for developers, and for guests for that matter. We don't see that slowing down anytime soon. There's some macroeconomic factors that are influencing the segment in a positive way.” He added that the $1.2 trillion infrastructure bill passed by the Biden administration will help fuel extended stay.
LivAway is up against other competing brands in the extended stay space, including Choice Hotels’ WoodSpring Suites, which opened several properties in the first half of the year and has dozens more in the pipeline. And in June, Marriott and Hilton both launched extended stay brands to keep up with growing developer demand.
