Upcoming holiday season impact on U.S. hotel performance
Two significant changes will impact travel in the U.S. this holiday season.
First, Thanksgiving is a week later, meaning there are five less days between Thanksgiving and Christmas and likely more travel compression between the two holidays. Second, Christmas and New Year’s Day move from a Monday last year to a Wednesday this year. Holidays that fall on a Monday are a positive for hotel stays, creating the cherished long weekend. A holiday on a Wednesday, however, does the opposite by suppressing stays.
Similar to the many ups and downs we have seen in 2024, the upcoming holiday season will be mixed with the Thanksgiving period (Wednesday - Saturday) predicted to produce flat to falling hotel occupancy and average daily rate (ADR). We expect the former to drop 0.5 percentage points (ppts) and the latter by 1.2%, resulting in a 2.1% decrease in revenue per available room (RevPAR) compared with the same Thanksgiving period a year ago. Average occupancy during the period is projected at 53.1%.
This year’s holiday season includes the fewest number of days (26) possible between Thanksgiving and Christmas, which has only occurred three times (2002, 2013 and 2019) since STR began daily performance benchmarking in 2000. While we will see compression, it is not as meaningful as we would have expected. We anticipate occupancy between the two holidays to increase by roughly 0.1ppts as compared to a year ago with hotel room rates rising 1.8%. Throughout the period, occupancy will remain in the mid-50% range.
Like the late Thanksgiving, a Wednesday Christmas and New Year’s Day has only happened three times in STR’s historical data, and a move from Monday to Wednesday in one year has never occurred. To determine the impact of this shift, we looked at occupancy between 24-31 December, the traditional holiday travel period. In 2017, the most recent period when the two holidays fell on a Monday, occupancy averaged 53.4%. In 2019, when Christmas and New Year’s was on a Wednesday, occupancy came in at 52.4%, or 1.3ppts lower than the holiday period in 2017. Our projection is for this year’s occupancy to show a similar decrease as compared to 2023 with an absolute average of 50.4%, while ADR growth is anticipated to also be muted at +1.5%.
Overall, between 27 November and 31 December, we expect hotel occupancy to be flat (-0.1ppts) with ADR increasing 2%. Thus, the end of year is not anticipated to be jolly, but it also won’t be gloomy—just more of the same.
*Analysis by Isaac Collazo.
About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France's leading commercial real estate news service. Thomas Daily is Germany's largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group's websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
