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Extended Stay America (STAY) Opens 54th Property in Florida

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Extended Stay America’s consistent focus on solid brand presence and global expansion is commendable. Of late, the company announced the opening of Extended Stay America Gibsonton in Florida. Notably, this marks the company’s 54th hotel therein.

Situated at 10623 East Bay Rd, this new four-storied, 124-roomed property is in close proximity to shopping and dining places as well as popular attractions such as Topgolf Tampa, Westfield Mall, Dave & Buster's.

The largest mid-priced extended stay hotel brand is confident about the success of the property. The Gibsonton location will be the brand’s southernmost property on the west coast of Florida, extending its reach to the Interstate 75 corridor. Also, the Gibsonton property will be joining the new hotels of the company in Port Charlotte, Palmetto and North Tampa. Jim Alderman, Extended Stay America’s chief development officer stated that “We are more than excited to expand our family and add yet another great location to our impressive collection of hotels in Florida.”

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, offering prolonged lodging services to self-sufficient guests. This presents Extended Stay America a competitive advantage.

Notably, as of Sep 30, 2019, the company had 77 hotels in its pipeline, representing approximately 9,400 rooms. In 12 years, Extended Stay America believes that it will see mid-single-digit percentage net unit growth.

Furthermore, the company continues to boost unit growth. To drive revenue per available room (RevPAR), Extended Stay America is banking on increasing unit growth. The company anticipates that its portfolio will likely have 700 Extended Stay America branded properties by 2021, 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. Year to date, shares of Extended Stay have lost 8.4% against the industry’s 27.7% growth.

Zacks Rank & Stocks to Consider

Extended Stay America currently has a Zacks Rank #4 (Sell).

Better-ranked stocks from the same space include Civeo Corporation (CVEO - Free Report) , Sands China Ltd. (SCHYY - Free Report) and Wyndham Destinations, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Civeo and Wyndham reported better-than-expected earnings in three of the trailing four quarters, the average beat being 42.5% and 7.2%, respectively.

Sands China has an impressive long-term earnings growth rate of 15%.

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