New Year’s Eve bookings in key cities give hoteliers a reason to celebrate

New Year’s Eve is historically a key hotel performance night each year, and given the current rate of bookings, 2023 should be no exception. While destinations across the globe will celebrate as the calendar turns to 2024, four of the most popular New Year’s Eve destinations (Sydney, Dubai, London, and New York City) highlight the impact of the holiday.

As of mid-December, hotel occupancy on the books is on par with New Year’s Eve 2022 even though the big night is on a Sunday this year. Like last year, when NYE fell on a Saturday, the market with the highest occupancy on the books is Sydney (83.8%), up almost one percentage point (ppt) from the same period last year. Further, 83.8% is Sydney’s highest occupancy on the books for the next 90 days (as of 11 December).

London and New York City show occupancy on the books close to 75%, with London up slightly compared to last year and NYC down 2.6 ppts. Dubai’s 64.0% level in occupancy on the books is up almost one ppt compared to last year.

When looking at levels across these key cities, it is important to remember the individual market dynamics that play a role in travelers’ advanced booking behavior—lead time, the pace of pandemic recovery, and the calendar shift from Saturday in 2022 to Sunday this year.  

In terms of actual NYE occupancy, Sydney and Dubai have generally seen the highest occupancy of the four markets over the past 10 years, hovering around 95% on average. London and NYC have recorded occupancy around 90% on average.  Occupancy post-pandemic is slightly lower for all markets although the relationship remains the same.

In 2022, Dubai posted the highest occupancy across the four markets, followed closely by Sydney. New York and London rounded out the list. This year, occupancy is expected to reach similar highs with a potential softening due to the calendar shift to Sunday. 

The last time New Year’s Eve moved from Saturday to Sunday was in 2017, during which time occupancy dropped 2.3 percentage points on average across the four markets. Given that this year’s occupancy on the books generally matches last year’s levels, we estimate occupancy to mirror last year in all markets except NYC, which may experience a slight decline. That market experienced relatively stronger performance over NYE 2022 as recovery occurred faster than other markets, which could explain the lower booking levels this year.

Average daily rate (ADR) follows historic patterns with Sydney and Dubai generally seeing the highest level in the metric, followed by New York City and London. In 2022, Sydney posted the highest ADR, just shy of US$500. This year, room rates are expected to remain above last year’s levels in all markets given the strong growth seen throughout most of 2023, as hoteliers continue to price with a focus on margins rather than occupancy.

Strong ADR coupled with steady occupancy should provide hoteliers with healthy profit potential.