US giant Choice Hotels brings long stays to Australia
US hospitality giant Choice Hotels is bringing its long stay chain, MainStay Suites, to Australia – taking the brand outside North America for the time – to plug what it says is a gap in the accommodation market for fly-in fly-out workers and families relocating in mostly regional areas.
The New York-listed player is partnering with local serviced apartment operator Extended STAY Australasia, which is run by Paul Constantinou, who founded Quest. As part of the tie-up, seven properties across three states will be rebranded.
Extended STAY Australasia will continue to manage the day-to-day operation of the hotels, while Choice Hotels will bring the properties onto its platform, including access to a loyalty program that includes more than 7100 hotels.
Trent Fraser, Asia Pacific chief executive at Choice Hotels, said when the company researched Australia’s accommodation market in early 2022, it identified a gap in the extended stay sector, which is its fastest-growing segment in the United States.
“So that is properties for guests wanting to stay five to eight nights on average, but sometimes 30 or more nights,” Fraser told The Australian Financial Review. “Bringing MainStay Suites to Australia strengthens our presence and supports our growth strategy and international footprint.
“We’re proud to offer tailored solutions for corporate and government travellers, as well as project-based workers, providing the ability to stay for weeks, months or longer without sacrificing comfort or convenience.”
Paul Constantinou, who founded serviced apartment provider Quest in 1988 and left the business in 2021, is the chairman of Extended STAY Australia.
“We’re building businesses for franchisees, potential franchisees to take over, and also working with developers,” Constantinou said.
“We’re offering long-stay travellers a convenient and comfortable alternative to traditional hotels,” he said. “We will run the businesses until we believe they’re ready for franchising. So we’ll be their operator, basically within Australasia.
“It’s probably one of the first to have, from an extended stay space or sector, to have an international brand, where investors can now invest in an international brand.”
The demand for extended stay accommodation had been strong since the early 1990s, he said.
“There’s still a growing demand for extended stay, and we’re seeing a lot of that now because there’s a lot more what we call contractual workers,” Constantinou said. “A lot of employees now, that work for major corporations move around the world. They’re global travellers.
“There’s a lot of business still in Victoria, with all the infrastructure work that’s going on, and because they’ve got to bring a lot of workers in that are from overseas.”
Fraser said opportunities to expand the MainStay Suites brand would most likely be through conversions of existing facilities rather than building new supply and the two firms would continue to target key regional gateway cities and suburban markets.
“It’s really understanding where the need is, where the travellers are, and where this type of accommodation, where we can see some clear demand,” he said.
Tapping into demand for accommodation ahead of the 2032 Brisbane Olympics and Paralympic Games is also on the radar as they’d “identified a major undersupply”, Fraser said.
Dean Dransfield, a long-time transactions and development adviser to hoteliers, said Australia had a shortage of quality extended stay accommodation, and there was an opportunity to address that demand.
“There’s lots of lowly serviced extended stay, which are in the nature of Airbnb type products, where you set and forget, check in and check out,” Dransfield said.
“In Australia, a lot of our serviced apartments have a similar length of stay as hotel rooms because they’re in CBDs and they’re being used as an alternative.
“So there is a place in between for an extended stay with a higher quality of service.”
