The Sonesta travel brand includes an eclectic collection of international luxury hotels, resorts and cruise ships. With a tiny hotel portfolio relative to major hotel brands (it currently has only ten U.S. hotels, for example), Sonesta is making a push to gain brand awareness by entering a new segment -- the extended stay market.
By acquiring fifteen Staybridge Suites and two Residence Inns, Sonesta is able to jump start its new "ES Suites" brand in the primary markets of Atlanta, Houston and Orlando, in addition to locations in Massachusetts, New Jersey, North Carolina and Ohio. Mike Wohl, operations vice president at Sonesta ES Suites, told HotelNewsNow.com, "We really like the extended stay business. It has matured to the point where it is a solid fundamental market segment on a national scale. It's a proven segment, and we really like the business model."
Some extended stay hotels have already opened under the new brand. The Sonesta ES Suites Orlando, for example, features 146 one- and two-bedrooms suites that sleep four to eight guests, tropical landscaping with outdoor sitting areas, complimentary daily shuttle service to the theme parks, heated swimming pool and Jacuzzi, lobby lounge, complimentary daily breakfast, and a fitness center.
Extended stay hotels are a bright spot in an industry that is only beginning to rebound from the economic downturn. For 2012, occupancy for extended stay hotels was 79 percent through July, compared to 62.3 percent for the hotel industry in general, according to HotelNewsNow.com. Jan Frietag, senior vice president of global development at STR, the company that owns HotelNewsNow.com, indicated that the average daily rate for extended stay properties has increased 5.6 percent in the past seven months, a healthy increase in the hotel industry.
Extended stay hotels are attractive to hotel property owners because they tend to have lower operating costs. The concept appeals to travelers who are looking for what is essentially a short-term residence. As a result, daily housekeeping services, bellmen and concierges are not expected amenities.
Sonesta has scored an instant presence in the Extended Stay market, and it intends to expand "quite aggressively on a national scale," says Wohl, who previously worked with Marriott's Residence Inns and developed IHG's "Extended Stay Owner's Certification Program." However, the lesser-known hotel brand faces a competitive challenge from established players in the market, including Homewood Suites by Hilton, Residence Inn by Marriott, and Staybridge Suites.
Mark Skinner, partner at The Highland Group, a hospitality consultant, told HotelNewsNow.com that Sonesta is likely to compete head-on with the Hyatt and Starwood Hotels extended stay brands, Hyatt House and Element. Like Sonesta, Hyatt House got on a fast track by acquiring and rebranding twenty-four Summerfield Suites and Sierra Suites properties about a year ago. Element is an extended stay chain positioned as "Element by Westin."