If the goal is maximizing extended stay profitability, proptech offers one of the most effective paths to achieving measurable savings, particularly through reduced staffing costs and lower energy usage.
As extended stay hospitality continues to grow rapidly, more brands are entering the market with flexible rental options designed to meet a wide range of guest needs. However, even with rising demand, operators must maintain competitive pricing strategies. It is essential to explore ways to boost ROI beyond rate hikes.
Investing in proptech has emerged as one of the most effective and reliable strategies for meeting today’s expectations around cost-efficiency, service quality, and operational flexibility. By leveraging digital solutions, operators can deliver exceptional yet economical service and ultimately enhance extended stay profitability.
Extended Stay Profitability: Capitalizing on Growing Demand
With a projected 9.35% CAGR over the next five years, the extended-stay hotel market is riding a wave of growing supply and demand. Even high-end flags like Hyatt now have two brands in the market, and Marriott is working to develop its own, which helped to push the number of rooms under construction up 8% in 2024. Hilton just debuted their first hotel of a game-changing new extended-stay brand, LivSmart Studios by Hilton in Middle Tennessee.
There is a baseline demand for extended stay as a renovation respite, a transition home between moves, or temporary housing for remote workers—both blue-collar and knowledge-based. Because of these long-duration stays, operators must prioritize efficiency to keep rates affordable and maximize profitability. For some brands, that means requiring at least a week-long stay to keep down costs associated with room turnover. Others, especially brands that will accept one- or two-night stays, must be a bit more creative to find efficiencies at every turn.
Service Meets Savings: The Power of a Digital-First Strategy
Long-term stay guests need the comforts and ease of home perhaps more than in any other market, especially if they’ve been displaced. The hotel is their home: they sleep, eat, relax, work, play, and so much more on the property.
Yet, because it’s NOT their home, guests often need traditional hotel services like housekeeping, tech support, and even concierge. But with the front desk having typically limited staffing and the industry still struggling with a labor shortage, many extended stay properties rely on minimalist service akin to an apartment complex.
To fill the traditional hotel service gap at the lowest cost possible, extended stay operators are turning to digital innovations. Here’s how proptech can deliver service and savings for the hotel.
- Measurable energy savings that impact your bottom line. Heating and cooling unoccupied rooms creates unnecessary expense, considering the unique behaviors of extended-stay guests, which typically follow a predictable pattern. Digital energy management solutions (EMS) such as smart thermostats can dynamically adapt to reduce energy consumption while providing customized comfort. Equipped with sensors, these tools can even capitalize on ambient conditions like sunlight and exterior weather conditions to provide the most efficient heating and cooling possible.
- Smart Technology, No IT Team Required. Guests depend on seamless connectivity across all their devices—both work and play. But because there’s not a tech support person on staff, they often get frustrated when connectivity issues arise. While this can damage the hotel’s reputation, most extended stay operators can’t allocate the budget to have a tech support person on staff. The Passpoint standard is gaining momentum for its effortless, automatic digital authentication that remembers each device, so guests don’t have the hassle of having to manually log in to the network every time they return to their home away from home – during the same stay, different stays or even different locations of the same brand.
- High-Touch Hospitality with Streamlined Staffing. Virtual concierge services that allow self-service check in/check out and access to guest services are popular options, along with mobile apps or in-room devices that enable guests to manage their account, request maintenance or housekeeping, and connect with local services like dining and activities.
- Reliable, High-Speed Connectivity. Ubiquitous Wi-Fi infrastructure is highly economical for extended-stay properties. Going fully wireless allows for rapid expansion with minimal wiring and equipment costs. Having reliable Wi-Fi across the property allows hoteliers to add IoT devices, such as security cameras, thermostats, etc., along with other technology, including Cloud PBX phone services. All of these technologies have the opportunity to upgrade infrastructure while also saving money.
- Anywhere Access for Smarter Operational Control. Many hotels are opting to remove infrastructure from the property. A cloud-based Wi-Fi network simplifies administration, allowing for remote monitoring and real-time troubleshooting of any issues on property. This alleviates the need to hire on-site IT tech support, reduces overall IT costs and improves operational efficiency, while also ensuring quick resolution to any issues. The remote team can see real-time stats on energy consumption, adjust HVAC programming and find other efficiencies in operations. This centralized view also minimizes downtime and provides consistent service quality for guests at one property or across the chain.
Strategic Investments that Drive Measurable Value
With the increase in market demand for this segment, extended stay operators are in a unique position for growth and expansion. However, in a market that operates on thin margins and the top priority is to maximize ROI, shaving pennies off operating costs can add up to a big impact on profitability.
For extended stay operators, proptech is one of the best ways to realize and prove measurable savings, especially in the case of lower personnel cost and energy consumption.
But in order to be successful, proptech solutions require a robust, reliable, property-wide Wi-Fi infrastructure that delivers the features operators need with the efficient digital experience guests expect, both of which are essential for extended stay properties to maximize margins. We’re here to help you achieve extended stay profitability through proptech, contact us for more information.
This article originally appeared on Hospitality Technology.
Mike Gray is Global Vice President – Strategic Partnerships at Nomadix, an ASSA ABLOY company, and is recognized as a global technology leader in the AHLA Global Technology 100 (T100).