Extended Stay America, Inc. operates as an integrated owner/operator of company-branded hotels in North America. The company operates in the extended-stay segment of the lodging industry.
As of December 31, 2020, the company owned and operated 563 hotel properties in 40 U.S. states, consisting of approximately 62,700 rooms, and franchised 83 hotel properties for third parties, consisting of approximately 8,500 rooms. All 646 system-wide hotels operate under the Extended Stay America brand, whic...
Extended Stay America, Inc. operates as an integrated owner/operator of company-branded hotels in North America. The company operates in the extended-stay segment of the lodging industry.
As of December 31, 2020, the company owned and operated 563 hotel properties in 40 U.S. states, consisting of approximately 62,700 rooms, and franchised 83 hotel properties for third parties, consisting of approximately 8,500 rooms. All 646 system-wide hotels operate under the Extended Stay America brand, which serves the mid-price extended stay segment and accounts for approximately 43% of the segment by number of rooms in the United States.
The 563 hotels are owned by ESH Hospitality, Inc. (ESH REIT) and are leased to, operated and managed by wholly-owned subsidiaries of the company. All hotels operate under the Extended Stay America brand. The company focuses to rebrand its hotels to the Extended Stay America Suites brand or the Extended Stay America Premier Suites brand, each of which would operate under the Extended Stay America umbrella brand. Wholly-owned subsidiaries of the company own the brand and intellectual property related to its business and license them to third-party franchisees.
Segments
The company operates through two segments, Owned Hotels, and Franchise and Management.
Owned Hotels: This segment engages in the operation of company-owned hotel properties and include room and other hotel revenues.
Franchise and Management: This segment engages in various franchise and management agreements with third parties. These contracts provide the company the ability to earn compensation for licensing the Extended Stay America brand name, providing access to shared system-wide platforms and/or management services.
The company is also the major hotel company focused on the extended stay segment. The company targets its product and service offering to an underserved customer base within the lodging industry and the extended stay segment. Its core operations include intense focus on the delivery of guest experience; its marketing and distribution platforms; improving its brand, in-part through rebranding its hotels to the Extended Stay America Suites brand or the Extended Stay America Premier Suites brand, each of which it would operate under the Extended Stay America umbrella brand; and improving the value of its owned real estate through investment in its hotels.
Brand
The company operates its hotels under the Extended Stay America brand. All Extended Stay America-branded hotels feature in-room kitchens, free Wi-Fi, flat screen TVs with cable channels and on-site guest laundry.
The company focuses to launch its new step-up brand, Extended Stay America Premier Suites. The launch would include 32 existing newly constructed or recently renovated hotels. The brand would be defined by upgraded amenities, such as signature bedding, a free healthy breakfast bar, larger TVs, upgraded kitchens and spacious apartment-style room layouts. All owned, newly constructed Extended Stay America hotels would be part of the Extended Stay America Premier Suites brand. The company’s major offering would be re-branded to Extended Stay America Suites.
Sales and Marketing
The company focuses on customers with extended stay lodging needs, including major Fortune 500 companies, small and medium sized businesses, construction and project-based work, relocation and staffing consultants, as well as medical, technology, military and government organizations. In 2020, its sales organization focused on industry segments and accounts where workers must be physically present, such as construction, supply chain logistics and temporary medical workers.
Seasonality
The company’s revenues are lower during the first and fourth quarters (year ended December 2020) of each calendar year as is typical in the U.S. lodging industry. ESH REIT’s revenues and earnings are highest during the fourth quarter of each calendar year as rental revenues contingent upon lessee hotel revenues are not deemed as earned for accounting purposes until certain lessee hotel revenue thresholds are achieved, which typically occurs in the fourth quarter. ESH REIT’s cash flows generally remain consistent each quarter.
Regulation
The company attempts to satisfy the Americans with Disabilities Act of 1990 (ADA) requirements in the designs for and operation of its hotels, websites and other facilities subject to the ADA, but it cannot assure customers that it would not be subjected to a material ADA claim.
History
Extended Stay America, Inc. was founded in 1995.