Summary
Length of stay is reshaping the economics of hospitality across Europe. Revenue volatility, cost efficiency and cash flow visibility increasingly depend on how income is distributed over time rather than on total demand. As European travel patterns shift toward longer stays, operating models built around predictability are gaining relevance, with Portugal emerging as a clear example of this transition.
Main Insights
Short-stay hospitality models generate most of their revenue in limited periods of the year. This makes performance more exposed to seasonality and sudden changes in demand, even in markets with strong tourism fundamentals.
Data from **CoStar’s Europe Hotel Performance (2025)** shows that, across multiple European markets, the gap between peak and off-peak RevPAR widened during 2024–2025. This increased revenue dispersion for hotels primarily driven by short stays, reinforcing reliance on pricing during high-demand periods while performance weakens outside those peaks.
Operating costs add another layer of pressure. The [Deloitte European Hotel Industry and Investment Survey (2024)](file:///C:/Users/jcmas/Downloads/european-hotel-industry-investment-survey-2024.pdf) shows that staffing, energy and maintenance costs remain largely fixed throughout the year. When occupancy drops, margins tend to fall faster than revenues.
This pattern became more visible as financing conditions tightened during 2024 and into 2025. Hotels with more concentrated revenue streams showed greater differences in performance within the same markets, highlighting the higher risk profile of short-stay models.
Extended-stay models alter the economics of hospitality by spreading revenue across longer periods of time. Instead of concentrating income into short demand peaks, performance becomes more evenly distributed throughout the year.
Operating costs also behave differently. With fewer guest turnovers, extended-stay assets typically require less frequent housekeeping and front-desk activity. The Deloitte European Hotel Industry and Investment Survey (2024) [](file:///C:/Users/jcmas/Downloads/european-hotel-industry-investment-survey-2024.pdf)notes that models with lower operational intensity tend to manage staffing and service costs more efficiently relative to occupancy.
Together, these dynamics narrow performance swings over time. From an economic perspective, extended stays move hospitality closer to a stable operating business rather than one driven primarily by seasonal demand cycles.
The economic difference between short stays and extended stays is driven by how revenue and costs behave over time, not by total demand.
Short stays concentrate revenue into peak periods, increasing exposure to seasonality and pricing cycles. This leads to higher volatility, as reflected in European hotel performance patterns observed by CoStar (2025).
Extended stays spread revenue over longer periods. This supports steadier occupancy and reduces reliance on constant guest turnover, in line with length-of-stay trends shown in Eurostat data (2024). Lower turnover also reduces operational intensity, allowing staffing and service costs to scale more efficiently, as highlighted by Deloitte (2024).