Third-quarter average daily rate and revenue per available room at U.S. extended-stay hotels each increased year over year, but occupancy declined and supply growth remains low, according to a new report by The Highland Group.

Third-quarter RevPAR for the segment increased 0.6 percent year over year to $95.49. Economy-tier RevPAR declined 0.4 percent -- still a function of the tier's "exceptionally strong recovery index from the pandemic" as well as broader softness in all economy hotels -- while it increased 3 percent and 1.4 percent at midprice and upscale extended-stay properties, respectively.

ADR in the segment for the third quarter increased 1.1 percent to $122.49, rising in each tier, according to Highland, which added that "rate increases have moderated over the last

12 months and are generally consistent with the same period in 2018/19."

Occupancy in the third quarter dropped 0.4 percent to 78 percent, the lowest such third-quarter figure outside of 2020 since 2010, according to Highland. Upscale occupancy increased 0.2 percent, but it declined in the economy and midprice tiers.

Overall U.S. extended-stay increased 3.2 percent year over year in the third quarter to about 592,000 rooms, a growth rate Highland said was lower than typical. Citing hotel analytics firm STR's projection for slightly higher overall U.S. hotel ADR and occupancy in 2025, Highland noted that should that play out, "extended-stay hotel occupancy and ADR should also increase based on the long-term correlation and low supply growth."