With Smith Travel Research initiating the collection of hotel operating performance by day of week, we now have the ability to take a deeper look at the daily occupancy and room rate performance of various industry segments. In this issue I will focus on the vastly different occupancy performance, by day of week, for the five chain scale segments we track.

Not surprisingly, for each of the five groups, Sunday is by far the weakest occupancy day; however, beyond that most of the similarity among the chain scale segments ends. For the two higher end full service segments, upper upscale and upscale chains, Tuesday and Wednesday are the peak occupancy days, but also reported relatively high occupancy rates on all other days with the exception of Friday and the previously mentioned Sunday. Interestingly, upper upscale chains appear to be the segment with the least occupancy variability among the five segments with six days at or above 70 percent occupancy. At least part of the reason for this consistency is this group of chains mix of business. With their reliance on convention and resort business in conjunction with consumers recent tendency to extend business trips several days, Upper upscale chains maintain high occupancies throughout the week.

Upscale chains, which tend to be located in suburban locations, displayed high occupancy Monday through Thursday and a significant drop off on the weekends. In fact, once you eliminate Sunday from the weekday/weekend calculation, this group of chains achieved almost a 10-point occupancy premium during the week. A similar, although less dramatic situation, is also evident for Upper upscale chains.

Looking next at the two midscale segments, with and without F&B, we see a very similar pattern of daily occupancy, although at different levels of occupancy, with the chains without F&B achieving anywhere from a 5 to 8 point occupancy premium depending on the day of the week. In addition, when excluding Sunday from the analysis, both still have higher occupancies on the weekend, although not by much. In fact, for the without F&B group, the premium is so small as to be statistically insignificant.

Finally, economy chains are least like any of their segment counterparts. As a group, their occupancy is much higher on the weekend than during the week, with or without Sunday being included. While this weekend premium is not surprising, the magnitude of it is dramatic, as their weekend occupancies are more than 15 points higher than during the week. This situation is not liable to change in the near future as this group continues to cater to the most cost conscious travelling consumer all week and people travelling on their own "dime" on the weekend.

Later on this year I will again focus on this data with more of a look toward change over time and how the daily occupancies affect hotel pricing.

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By Mark V. Lomanno, President, Smith Travel Research

Chuck Ross (STR)
(615) 824-8664
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