Navigating Change: Extended Stay Thrives, AI's Leap in Travel, the Resilient US Apartment Market, & Japan Airlines' Clothing Rental Innovation

Welcome to this month's edition of the #StaySmart Newsletter! In a world where change is the only constant, innovation blooms across multiple sectors. Dive into how Extended Stay America is reinventing the extended stay experience with its latest properties. Explore how Japan Airlines is making traveling lighter (and greener) with its clothing rental initiative. Gain insights into the flourishing US apartment market, rebounding with high demand, and uncover how AI is poised to revolutionize the travel industry, as presented by a top Microsoft exec.

We've handpicked these stories for your enlightenment and enjoyment - stay smart with us! Catch Gabriel Wacker 's video recap below, and read on for all the latest!

US Extended Stay Segment Thrives, Outpacing General Hotel Industry

A report from The Highland Group reveals that the extended stay segment in the US, especially the upscale extended-stay hotels, is outperforming the wider hotel industry. Despite the economy segment's slight RevPAR decline, total extended-stay hotel revenue and occupancy still exceeded those of all hotels, according to STR. The upscale extended-stay sector experienced the highest gains in average daily rates for nine consecutive months. Highland's Q1 2023 report further confirms significant RevPAR gains in economy and mid-price extended-stay hotels compared to all hotel classes since 2019.

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Apartment Market Shows Record Construction, Demand Spike Amid Market Stability

The US apartment market is witnessing an unprecedented surge, marked by the completion of a record 107,000 units in Q2 2023, and demand hitting a five-quarter high. This bustling activity is leading to significant changes in the market:

• Geographic Hotspots: The demand surge is notably pronounced in the Sun Belt and Mountain regions. Houston, Phoenix, Dallas/Fort Worth, and Charlotte are among the top locations experiencing this high demand.
• Occupancy Rates: Despite the rising supply, occupancy rates have managed to stay stable. Nationwide, apartment occupancy is nearly 95%, indicating robust demand.
• Rent Trends: The rate of rent growth has been softening every month this year, indicating more options for renters and potential downward pressure on rental prices. The YoY asking rent growth was 1.5%, the lowest since early 2021.
• Falling Rents: Areas such as the South, Desert and Mountain regions, and the West Coast are seeing falling rents due to the new supply of apartments. This includes cities like Boise, Phoenix, and Las Vegas.
• Rent Growth Areas: In contrast, the Midwest and the Northeast corridor, especially college towns, are witnessing a rise in rent, with increases between 6% and 10%.

The current boom in construction is projected to persist through 2024, which will continue to shape the multifamily apartment category. These shifts in the rental market underscore the key role that geographic and demographic trends play in influencing housing demand and supply patterns. The blend of record construction, changing rents, and stable occupancy rates signifies a dynamic and evolving apartment market landscape.

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Microsoft Unveils 5 Ways Generative AI Can Revolutionize Travel Industry

Microsoft is harnessing the power of generative AI to innovate in the travel industry, collaborating with global distribution company Amadeus. They are focusing on several key areas:

1. AI Travel Assistants: Microsoft envisions AI as a personal travel aide, guiding users from trip planning to post-trip activities.
2. Predicting Flight Delays: By analyzing staff communication, AI could predict flight delays, assess impacts on future flights, and alert operations centers.
3. AI Customer Service Chatbots: Chatbots are being used to answer a wide range of customer queries, learning from each interaction to improve response quality.
4. Automated Message Summaries: Generative AI could transcribe phone calls or voicemails or even "read" contracts, saving businesses considerable time.
5. AI-Powered Sales Emails: AI could draft responses to sales emails by accessing and understanding a hotel's schedule and availability.

These advancements signify a strong commitment to embedding AI in products and services, driving operational efficiency and productivity within the travel industry.

Microsoft's involvement with OpenAI grants it exclusive access to the tech that powers ChatGPT, opening up more possibilities for embedding AI in products and services.

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Japan Airlines Introduces Clothing Rental for Eco-Conscious Travel

Synopsis: In a bid to cut down carbon emissions, Japan Airlines has launched a year-long clothing rental service called "Any Wear, Anywhere" for its international passengers. The initiative, aimed at reducing aircraft weight, allows travelers to rent a set of clothes for their stay in Japan, promoting sustainable tourism and travel with minimal luggage. The clothing rental, managed by Sumitomo Corporation, uses excess stock and pre-owned clothes to promote a circular economy. Travelers can choose from several sets, categorized by season and occasion, starting at 4,000 yen for three tops and two bottoms.

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