Extended Stay America, Inc. STAY announced that it plans to convert an existing hotel in San Antonio, Texas. The new property is owned by an affiliate of Provident Realty Advisors, Inc., a Dallas based developer.
Meanwhile, as part of the acquisition, the new converted hotel will mark Provident’s third property. To this end, properties in the Provident portfolio will be managed by Aimbridge Hospitality.
Notably, the four-storied and 113-roomed converted hotel is situated at 21103 Encino Commons Blvd. The property will be in close proximity to Six Flags Fiesta Texas and the San Antonio River Walk. It is also just eight miles away from the San Antonio Airport, providing guests an easy access.
The largest mid-priced extended stay hotel brand is proud to collaborate with Provident Realty and Aimbridge Hospitality as they continue to expand its hotel portfolio. The opening of this San Antonio location will mark the 20th Extended Stay America hotel under their ownership. It is also optimistic to convert additional hotels by early 2021.
“We are especially excited for the opening of this hotel property, as it expands Extended Stay America’s presence to three locations within San Antonio, the second largest city in Texas and one of the fastest growing markets in the nation over the last decade,” as stated by Stephen Miller, managing director of Franchise Development for Extended Stay America.
Expansion to Boost Performance
Extended Stay America is the largest integrated owner and operator of hotels in North America. The company differs from traditional hoteliers by offering prolonged lodging services to self-sufficient guests. This gives it a competitive advantage.
Notably, as of Sep 30, 2019, the company had a pipeline of 77 hotels, representing approximately 9,400 rooms. It also continued to boost its pipeline at 35%. Extended Stay America believes that it will see mid single-digit percentage net unit growth in 12 years’ time.
To drive revenue per available room (RevPAR), Extended Stay America is banking on increasing unit growth. It anticipates that by 2021, its portfolio will likely have 700 Extended Stay America branded properties, out of which nearly 70% will be owned or operated and 30% franchised.
However, lack of exposure in international markets amid stiff competition is concerning. So far in the past year, shares of Extended Stay have declined 14.1% against the industry’s 35% growth.
Currently, Extended Stay, which shares space with Hilton Grand Vacations Inc. HGV, Marriott Vacations Worldwide Corp. VAC and Hilton Worldwide Holdings Inc. HLT has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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