Despite having a well-earned reputation as one the heaviest air and road travel holidays of the year, Thanksgiving week shows substantial occupancy and RevPAR performance deficits for the U.S hotel industry starting the Monday before the holiday and lasting until Friday.
HENDERSONVILLE, Tennessee—An STR review of U.S. performance data from past Thanksgiving periods shows a shortfall in revenue per available room when compared to surrounding matched days of the week.
(STR is the parent company of Hotel News Now.)
The Friday after Thanksgiving is the only day around the holiday to show near normal performance, with the Tuesday leading into the holiday showing the steepest RevPAR shortfall (-$52, or 47% below normal).
For this data snapshot, STR studied U.S. hotel performance data over the past eight Thanksgiving weeks from 2011 to 2018.
It should come as no major surprise to those who track the industry that lowered occupancy over the Thanksgiving holiday is the top factor driving down hotel performance for the holiday. Perhaps the bigger story related to this period is how differently segmented rooms (i.e., group and transient) perform during this time.
While not entirely unexpected, group is at a standstill for the holiday week. On Tuesday, the worst performance day, group rooms are filling only 4% of U.S. room supply. By comparison, 31% of the nation’s rooms were filled, on average, by group business on the Tuesday before Thanksgiving week, and 24% of rooms were filled by group on the Tuesday following Thanksgiving.
Transient occupancy at the start of the week fell short of the average from surrounding matched days-of-week, particularly on the Tuesday leading into Thanksgiving. By Wednesday, we start seeing gains in the percentage of transient U.S. rooms filled, and by Friday transient occupancy hits 55% (about one-third higher than seasonally expected).
The following indexed RevPAR heat map displays segmented performance premiums and deficits for the extended holiday period. Deficits on group, with its deeply hued reds, clearly show that the loss of group business over the holiday period is gobbling up RevPAR. Sizable transient shortfalls on Tuesday, combined with the absence of group business, produces RevPAR 55% below normal. The good news is that an upsurge in transient stays on Thursday and Friday reduces the industry’s RevPAR deficit on the week. By the post-holiday Monday, average RevPAR essentially is back to seasonal normal.
M. Brian Riley is a research analyst with STR’s Market Insights division.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.