More than 8 billion dollars. That’s what Lightstone paid in April 2007 to purchase the group Extended Stay Hotels from Blackstone. In doing so, this investment giant made a fine profit: Extended Stay Hotels has nearly doubled its value in three years. This figure – significantly higher than the purchase price for renowned hotel groups such as Fairmont, Four Seasons, La Quinta or the Société du Louvre – highlights the growing appeal of the extended stay segment for investors. In the comparisons game, the elements of the extended-stay product can make financial directors of classic hotel products green with envy: lower costs for personnel; long-term reservations meaning lower marketing costs; paid services that are inclusive in the hotel industry such as room cleaning; and, finally, the possibility to optimize occupancy with sales of individual nights.Institutional investors are increasingly convinced in light of such perspectives for a rapid return on their investment. “It is a perennial model,” remarks Eric Blanc, General manager of the group Océanis which is developing the Park & Suites brand in France. This market adds a final perk to all those previously mentioned: fiscal advantages. As a result: real estate promotion specialists have studied the extended stay offer for a long time. A subsidiary of the group Menguy Investissement, the group Dom'Ville'Services is successfully developing its AppartCity product while targeting secondary and tertiary agglomerations rather than major cities. The plan is to double its supply. With Adagio and Citadines, which have many projects in the pipeline, the competition is on for leading position in terms of urban residences.Guus Bakker, Executive director of Frasers Hospitality for Europe ad the Middle East, recognizes the advantages of the formula: “operating margins for the extended stay sector are higher than those in the hotel industry”. This may explain why AXA has...