There was no unveiling a candle-laden cake when Huka Lodge (hukalodge.com; doubles from NZ$2,728) turned 100 last year. Like many other grande dames, New Zealand’s most celebrated lodge approached its big day strategically. The doors were shuttered last year as the property underwent a NZ$25 million refurbishment. When the first guests returned in May this year, they found that the property looked… not that different—which was exactly what they had hoped for.
“It’s the one thing all the guests said before we closed: ‘Don’t change it too much!’” says Huka Lodge’s general manager Kerry Molloy. In fact, there have been some significant additions—including extensive new indoor-outdoor areas and a new river lounge—but preserving the lodge’s character was a key aim.
‘Don’t change a thing but keep it contemporary’ could be the motto for the Asia-Pacific region’s most historic hotels, many of which have been welcoming guests for a century or more. Regular multi-million-dollar renovations, like the one just announced for Mandarin Oriental Bangkok (mandarinoriental.com; doubles from Bt22,328) ahead of its 150th anniversary next year, are considered essential maintenance, but care is taken not to mess with the heritage ambience.
Take Sri Lanka’s Amangalla (aman.com; doubles from US$982), located inside a 340-year-old building within the UNESCO World Heritage-listed Galle Fort. Back in the 1600s it was the residence of the Dutch-colonial administration, later it became British barracks; it was turned into a hotel in the 1860s, then operated as the New Oriental Hotel for a century before being reborn as an Aman resort in 2004.
Amangalla
Its guests enjoy a wealth of antique details, including four-poster beds, planters’ chairs, pettagama chests, freestanding bathtubs and period chandeliers, many dating back to the days of the New Oriental Hotel. They might even take a seat at the mahogany writing desk in their room, to compose a message on one of the postcards provided, before heading down for a traditional afternoon tea served with antique silverware.
In finding a way to walk the line between heritage character and modern conveniences, Amangalla has plenty of company. In George Town, Penang, the Eastern & Oriental Hotel (easternandoriental.com; doubles from RM860) was established by the Sarkies brothers in 1885 through the amalgamation of two existing hotels.
After the E&O, the Sarkies went on to open a spate of grand hotels that are still thriving: Raffles Singapore in 1887, Burma’s The Strand Rangoon (now Yangon) in 1901, and Indonesia’s Majapahit Surabaya in 1910.
Other way-back-when openings include The Oriental (known since 2008 as the Mandarin Oriental), which was Bangkok’s first luxury hotel, in 1876. Hanoi’s Grand Hôtel Métropole Palace—now the Sofitel Legend Metropole Hanoi—launched in 1901, followed by Hua Hin’s The Railway Hotel—now Centara Grand Beach Resort & Villas Hua Hin—in 1923. The Peninsula Hong Kong debuted in 1928, and then came Phnom Penh’s Hotel Le Royal—now Raffles Hotel Le Royal—in 1929, the same year the Goodwood Park Hotel opened in Singapore.
Centara Grand Beach Resort, Hua Hin
A respect for tradition weaves through each of these properties, from the green Rolls-Royces and afternoon teas of The Peninsula to Raffles Singapore’s be-turbaned doormen and the peanut shell–strewn floor of its Long Bar, birthplace of the Singapore Sling. Staff are inculcated in the history of each hotel.
“Many of our team members have been with us for years and take real pride in sharing the stories of Amangalla,” says Harry Fernandes, Aman’s regional director of India and Sri Lanka. “They know the history inside and out, and love connecting with guests who are curious to learn more.”
Japan’s historic ryokans are equally skilled at blending the modern with the traditional. Koshu Nishiyama Hot Spring Keiunkan, founded in 705 A.D., is listed in the Guinness Book of World Records as the world’s most historical inn but all across Japan you will find traditional ryokan run by generations of the same family.
At Nishimuraya Honkan (nishimuraya.ne.jp; from ¥53,230 per person twin share) in the charming hot springs town Kinosaki Onsen, the seventh generation of owners is now running this 165-year-old inn where traditional rooms feature tatami mats and sliding fusuma doors.
Raffles Singapore
“Providing a relaxing and calm environment, fine cuisine that fully reflects the local area, and making enjoyment of the town itself as easy and seamless as possible is probably what keeps Nishimuraya and other ryokan of Kinosaki Onsen able to continue for so long,” says Colin Fukai, the brand’s global marketing chief.
In Kyoto, Hiiragiya (hiiragiya.co.jp; starting rate from ¥82,000 per person twin share) was established in 1818 and is now run by the sixth generation of Nishimura family. Each room has its own unique details, from lacquered bathrooms to folding screens featuring Zen-style ink paintings.
The current okami (a ryokan’s proprietress), Ms. Akemi Nishimura, says that a ryokan is often “passed down” by loyal guests to their children and grandchildren. That loyalty corresponds with the way the family has handed down its philosophy of raisha nyoki through the generations, she says.
“We strive to be attentive to our guests’ feelings and concerns before they are told, and while resting from the day’s fatigue,” she says. “This spirit of hospitality is timeless, though it is important to adapt and change with this spirit, to meet the needs of the times and people today.”
Ute Junker has been reporting on luxury travel and lifestyle for more than 20 years. She spends much ..Read Moreof the year on the road and is happiest snorkelling a coral reef, tucking into a new cuisine, or enjoying an up-close encounter with wildlife. Read Less
Kolkata: Indian Hotels Company (IHCL) has announced the agreement signing for 15 new hotels across its brandscape with the Ambuja Neotia Group. This capital light arrangement will grow the partnership to over 40 hotels, including a Taj Resort in the Sundarbans.Puneet Chhatwal, MD and chief executive officer of IHCL, said: “IHCL’s pioneering legacy of building destinations like Rajasthan, Kerala, Goa, Andaman and Lakshadweep islands will now extend to unlocking the tourism potential of the east and northeast with this agreement. We are delighted to extend our partnership with the Ambuja Neotia Group, known for its luxury hospitality developments showcasing the spirit of this region.“The 15 new sites identified to be developed are a combination of greenfield, brownfield and conversion projects and spread across Bengal, Sikkim and Himachal Pradesh. These would include Taj resorts in Darjeeling, Shimla and Rabong, SeleQtions Hotels in Kolkata and Siliguri and a Tree of Life in Lataguri. A few projects will also include Taj branded villas in Darjeeling, Sikkim, Lataguri and Raichak.Harshavardhan Neotia, chairman of Ambuja Neotia Group, said: “This announcement follows closely on the heels of IHCL’s strategic partnership with the Ambuja Neotia Group for Tree of Life, reflective of the strength and success of our ongoing collaboration. IHCL, with its iconic brand Taj, recently ranked as the World’s Strongest Hotel Brand, is renowned for its world-class service, enabling it to showcase these destinations on the global tourism map.“
The hospitality industry has undergone a seismic shift in the past five years, reshaped by pandemic-driven travel patterns, remote work adoption, and a growing demand for flexible, long-term accommodations. Among the most resilient and lucrative segments emerging from this transformation is the extended-stay hotel sector. For investors and developers, this category offers a compelling blend of strategic real estate development opportunities, operational efficiency gains, and strong cash flow potential.
Post-Pandemic Resilience and Market Fundamentals
Extended-stay hotels, particularly those in the midscale segment, have demonstrated remarkable resilience since 2020. While traditional hotels faced occupancy collapses during the pandemic, extended-stay properties maintained occupancy levels 10 percentage points higher than the industry average in 2024. This durability stems from their alignment with evolving consumer needs: – Remote Work and Bleisure Travel: The rise of digital nomads and hybrid work models has created a sustained demand for accommodations that blend work and leisure. Extended-stay hotels, equipped with kitchenettes, laundry facilities, and co-working spaces, cater to this demographic. – Infrastructure and Relocation Demand: Industries like healthcare, construction, and energy require temporary housing for crews, while families relocating for job opportunities increasingly prefer extended stays over short-term rentals. – Cost Efficiency for Developers: Median development costs for midscale extended-stay hotels stabilized at $167,000–$169,000 per room in 2024, significantly lower than full-service or luxury properties. This cost advantage, combined with steady cash flows, makes them attractive in a high-interest-rate environment.
Strategic Real Estate Development in the Midscale Segment
Developers are capitalizing on the extended-stay boom through innovative strategies tailored to current economic realities: 1. Conversion Projects: Repurposing underperforming limited-service hotels into extended-stay properties has become a cost-effective solution. These conversions reduce construction timelines, lower capital expenditure, and align with market demand for long-term stays. 2. Suburban and Secondary Market Focus: With urban centers seeing slower recovery, developers are prioritizing suburban areas near business parks, hospitals, and infrastructure hubs. These locations offer lower land costs and strong demand from long-term tenants. 3. Pre-Development Planning: High construction and financing costs have pushed developers to focus on pre-development activities—securing entitlements, conducting market feasibility studies, and engaging in architectural design—while delaying construction until conditions improve.
The Q1 2025 U.S. hotel development pipeline underscores this trend, with extended-stay hotels accounting for a disproportionate share of new projects. Brands like Home2 Suites by Hilton and TownePlace Suites by Marriott are leading the charge, leveraging their brand equity to attract investors and guests alike.
Operational Efficiency: The Key to Profitability
Extended-stay hotels achieve profitability through a combination of cost controls and tailored guest experiences: – Reduced Labor and Maintenance Costs: Weekly housekeeping, lower staff turnover, and reduced wear-and-tear on rooms cut labor and maintenance expenses. For example, a 100-room extended-stay property can reduce daily housekeeping costs from $3,000 to $420 by shifting to weekly cleaning. – Energy Management: Predictable occupancy patterns allow for optimized energy use, with HVAC systems operating at consistent levels and utility contracts negotiated for long-term savings. – Technology Integration: Digital tools like self-check-in kiosks, mobile apps, and dynamic pricing systems streamline operations and enhance guest satisfaction. Advanced revenue management systems have boosted RevPAR by up to 19% for some properties. – Customized Amenities: In-room kitchens, laundry facilities, and co-working spaces cater to extended-stay guests, reducing reliance on in-house food and beverage services while differentiating the property from competitors.
Investment Implications and Strategic Recommendations
For investors, the extended-stay segment offers several advantages: – High-Yield Opportunities: Attractive cap rates (often 4.5–6%) reflect strong fundamentals and lower perceived risk compared to other hotel categories. – Resilience in Economic Downturns: Extended-stay hotels have historically outperformed during recessions due to their alignment with cost-conscious consumers and long-term demand drivers. – Alignment with Demographic Shifts: The rise of remote work, healthcare staffing needs, and infrastructure projects ensures sustained demand for years to come.
Actionable Steps for Investors: 1. Target Midscale Developers: Prioritize companies with a track record in converting or developing midscale extended-stay hotels, particularly those with brand affiliations (e.g., WoodSpring Suites, Hyatt House). 2. Focus on Suburban Markets: Allocate capital to properties in secondary markets near hospitals, business parks, or infrastructure projects, where demand for long-term stays is most robust. 3. Evaluate Operational Efficiency Metrics: Look for operators with strong energy management systems, low labor turnover, and technology-driven revenue optimization tools. 4. Monitor Cap Rate Trends: Extended-stay hotels have maintained stable cap rates despite broader market volatility, making them a defensive play in uncertain economic climates.
Conclusion
The extended-stay hotel sector is not just a post-pandemic anomaly—it represents a fundamental shift in how people travel, work, and live. For investors willing to navigate the complexities of real estate development and operational efficiency, this segment offers a rare combination of resilience, profitability, and long-term growth potential. As the market continues to evolve, those who position themselves to capitalize on the extended-stay boom will likely reap significant rewards.
Fairmont Hotels & Resorts, part of Accor, has opened a new 327-key property in Udaipur in partnership with Keystone Resorts Pvt. Ltd.
Set on an 18-acre estate in Rajasthan’s Aravalli Hills, Fairmont Udaipur Palace draws inspiration from Mewar architecture, offering a blend of traditional craftsmanship and contemporary design. The property features 327 rooms and suites, eight dining concepts, and over 13,000 sqm of event space across indoor and outdoor venues.
“The opening of Fairmont Udaipur Palace marks a defining moment in Fairmont’s journey in India,” said Omer Acar, CEO of Raffles & Fairmont Hotels & Resorts. “This new palace reflects Fairmont’s commitment to honouring the spirit of each location we enter.”
The Jewel of Udaipur Suite features a private pool, spacious terrace, bespoke interiors, and panoramic views. Photo Credit: Accor
Accommodation options range from Fairmont Rooms to the Royal Maharaja and Maharani Suites, which feature private pools and expansive terraces.
Dining options include all-day restaurant Bahaar, palace bar Dahaad, Indian restaurant Zaika, and rooftop lounge Sitara, with more venues such as Celeste and The Alchemist set to open in the coming months.
The hotel also features the 1,115 sqm Fairmont Spa & Salon, Fairmont Fit Gym, and an activity zone for guests of all ages.
“We wanted to create a destination within a destination –where every guest feels like a modern Maharaja or Maharani,” said Somesh Agarwal, chairman and managing director of ROCKWOOD Hotels & Keystone.
Udaipur’s newest property also caters to weddings and corporate events, with venues such as Jewel Ballroom, the open-air Mehfil courtyard, and multiple terraces and lawns. A private helipad provides direct access for guests.
Vishrut Gupta, general manager of Fairmont Udaipur Palace, added: “Our vision was to create more than a hotel – a living palace that stirs emotion, celebrates culture and offers experiences that linger in memory.”
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