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Extended Stay: Slowly Entering Latin America

Kitchens, desks and larger rooms have made these properties popular in the U.S., but expansion in the rest of the Americas has been slow.

An in-room kitchen, weekly rates and a spacious room designed for business travelers staying more than just a night or two - this defines the "extended stay" hotel. These suites (or, occasionally, large rooms) can include elegant and authentic décor and furnishings that make them strikingly different from a standard hotel room. More floor space is another selling point. Typically, such suites include separate sleeping, living and working areas and feature a small kitchen with a full-size refrigerator, oven and, often, dishwasher. Fitness and business centers round out the picture. Housekeeping is provided, and other conveniences include the availability of "grab-and-go" food items, such as sandwiches and salads. Rooms can be booked by the day or by the week.


This category of hotel has been growing quickly in the U.S. Later this month, when the new 100-room Homewood Suites by Hilton opens for business in the small U.S. city of Kalispell, Montana in the Pacific Northwest, it will join a family of some 325 properties across the U.S. And more will soon be coming online; Hilton Worldwide alone has another 25 Homewood Suites under construction and 60 more in the planning phase.


Extended Stay in Latin America and the Caribbean

In Latin America and the Caribbean, however, extended stay hotels have been slow to catch on, although many large cities have apartment hotels, which tend to have less-frequent housekeeping and less-flexible room rates. There are a considerable number of locally owned extended-stay facilities in Brazil - most of them former condominiums. Throughout the region, only a small handful of such properties are under the management of leading international brands.


Two such brands are in São Paulo: InterContinental Hotel Group's Staybridge Suites and Marriott's Executive Apartments. However, Staybridge Suites' only other location is in Guadalajara, Mexico, and Executive Apartments' only other location is in Panama City. Homewood Suites has just one property in the region, located in Torreón, Mexico's ninth largest metropolis and an important industrial city in the north-central part of the country. Another Hilton Worldwide brand, the newer and more limited Home2 Suites by Hilton, will open its first hotel in Mexico by the end of this year. The 100-suite facility is being built in Querétaro, a popular business and leisure travel destination located 135 miles northwest of Mexico City. Priced slightly lower than Homewood Suites and offering no countertop burner in its kitchen, Home2 Suites is described as a "mid-range" extended-stay option.


Salo Smaletz is the InterContinental Hotel Group's vice president for Development in Latin America. Based on what's he's observed in the several years the firm's Staybridge Suites has been in operation in São Paulo, about 85% of guests are there for business, while 10% are identified as "leisure" travelers and the remaining 5% are such regular clients as airlines crews on layovers. The typical occupancy is from three to four days, with the greatest concentration of client from Sunday toThursday. Smaletz sees continual growth in the domestic market as business travel within Brazil increases.


Plans for New Properties Under Consideration

"São Paulo has been booming as a destination and the occupancy in general has been growing," Smaletz points out. "In the past five years, it is safe to say, our Staybridge Suites property has gained two to three occupancy points every year. It's now around the high 70s in terms of yearly occupancy."


The growth in occupancy rates has been steady enough to lead IHG to consider other projects in the region. "We are always looking for expansion in markets where there is a demand for long-stay products," Smaletz adds. "We are currently having discussions on a couple of opportunities in Brazil and we have a deal signed in Panama that should open in the next two years or so."


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