STR Weekly Insights: 15-21 December 2024, 22-29 December 2024, 30 December 2024 – 4 January 2025

Analysis by Isaac Collazo, Chris Klauda

All financial figures represent U.S. dollars. 

Highlights
 

• Strong finish to 2024 across the globe
• New Year’s Day calendar shift provided an extra boost for the week
• Rio de Janeiro and Paris experienced the best NYE performance
• Europe finished the year with a bang, China is still lagging 
• December prelim data points to largest U.S. RevPAR gain since March 2023
• California wildfires among situations to watch in the coming weeks

Healthy end to 2024 and start to 2025, made even stronger by a calendar shift 

The global hotel industry was on a bit of a rollercoaster ride the last three weeks. Across most countries, the week preceding Christmas produced double-digit gains as global revenue per available room (RevPAR) rose 10.4%. We then saw a decline during Christmas week (-1.8%) followed by a second round of double-digit gains (+25.3%) during the week ending 4 January 2025. Year-over-year growth in the most recent week benefited from a calendar shift as New Year’s Day was on a Wednesday versus Monday last year. A readjustment of the week’s performance matching the dates (not days) still revealed a healthy RevPAR increase of 9.4%.

U.S. closed the year on a high note

The U.S. followed a similar three-week pattern with RevPAR up (+14.3%), then down (-6.6%), and then up again (+14.9%). As seen across the globe, the most recent week benefitted from the calendar shift; however, when readjusted to match dates and not days, RevPAR for the most recent week was up a modest 1.9%. The past three weeks combined to produce an unexpectedly strong December, which is estimated to show RevPAR up 4.8% compared to last year. That would be the greatest monthly increase since March 2023.

All chain scales experienced a similar trend with greatest three-week volatility among Luxury hotels chains, ranging from -9.2% to +37.3%, followed in lockstep by Upper Upscale (-8.0% to +18.0%) down to Economy (+1.4% to +12.1%). Economy did not experience a decline over the three weeks due in part to the continued demand impact from the fall hurricanes.

Europe ends the year with a bang

RevPAR growth throughout Europe seemed unstoppable in 2024 with all but six weeks showing gains. Europe also experienced the up and down trend over the past weeks, and the region closed the year with the second highest RevPAR gain of 2024.  France, Italy, Germany, the United Kingdom and Spain all experienced 20%-plus gains in RevPAR during the most recent week. Overall, Europe RevPAR over the three weeks was up 13%, led by Eastern Europe, where the measure was up 22.6%. Northern Europe posted the lowest RevPAR growth of 8.9%. For the continent and most subcontinents, except Southern Europe, occupancy drove the RevPAR growth with most of the growth coming from the week containing New Year’s Eve.

China still lags

Green shoots are somewhat evident in China as year-over-year declines are getting smaller, reflecting some improvement across the country. However, RevPAR percentage changes remained negative for the three weeks ending 4 January with only nine markets posting gains, including Beijing (+0.4%), Hong Kong (+0.3%), Macau (+15.1%), Shanghai (+7.3%) and Shenzhen (+5.8%). A better view of conditions will come with the Lunar New Year performance at the end of January. 

Middle East

When looking at the GCC, RevPAR followed the global roller coaster pattern over the past three weeks ending with a RevPAR gain (+12.5%) close to Europe’s. Like Europe, performance has been generally strong all year with RevPAR gains for most of the weeks in 2024. 

When looking at the Middle East as a whole, Kuwait saw the largest RevPAR increase over the period (+114.6%) followed by Lebanon (+28.8%). The former was led by occupancy growth, while the latter grew via average daily rate (ADR). UAE RevPAR increased 11.1% on nearly equal growth in occupancy and ADR.

Japan highlights APAC growth

The last three weeks across APAC countries saw RevPAR increase 8.1% with the strongest gains in Southeastern and Northeastern Asia. RevPAR in Japan grew 27.6% over the past three weeks to lead the continent.  

Americas top the chart 

The Americas region, excluding the U.S., posted the largest RevPAR gains across the last six weeks (+15.9%). In the past three weeks, the region’s growth (+12.3%) was aligned with the increase seen in Europe. The growth was driven by ADR, specifically strong gains in Argentina, Mexico, Puerto Rico and Uruguay. 

New Year’s Eve impact

The most significant market mover during the holiday period was New Year’s Eve. The day of week in which the holiday occurs makes a big difference. In the U.S., the highest occupancies over the past 24 years have been seen on weekends (Friday & Saturday), where the measure averages 64.7%. Conversely, the lowest are seen on weekdays (Monday-Wednesday) at an average of 57.8%. Shoulder days (Sunday and Thursday) are only slightly better (58.6%). This year was particularly different with the holiday two days later from Sunday last year to a Tuesday. That put the year-over-year comparison against a post-holiday day last year (Tuesday, 2 January) and resulted in a 100.9% RevPAR increase. 

Looking at New Year’s Eve 2024 versus New Year’s Eve 2023, RevPAR was down 2.2% on falling occupancy (-2.3ppts) and rising ADR (+1.9%). The decrease in occupancy was more than expected given the day shift. As compared to previous holidays, the more recent New Year’s Eve’s occupancy ranked 22nd of the 25 occurrences in our database. Occupancy (55.3%) was also the lowest of the four such holidays that have fallen on a Tuesday in that span. In 2019, when the eve was also on a Tuesday, occupancy reached 59.4%

Performance varied across the major global cities with the highest priced markets seeing the largest RevPAR gains, which were also inflated by the day-to-day comparison.

• Rio de Janeiro saw New Year’s Eve RevPAR advance by more than 35% to $610. 
• Paris’ strong performance was lifted by the opening of the Notre Dame Cathedral and an easier comparison because last year the city was put on high-level security with a terrorist event occurring earlier in the month.
• Six markets posted steady gains for the past three years including Oahu, Singapore, Sydney, Dubai, New York City and London.
• Orlando and Nashville saw generally flat RevPAR compared to NYE last year. 
• NYE RevPAR in Los Angeles was lower in 2024 after a strong performance in 2023 due to an easier comp to 2022 when the Rose Bowl was held a day later.
• We believe the day shift is the primary reason New Orleans saw lower RevPAR following last year when it increased by more than 26%. It’s a drive to market, which benefits more when holidays fall on a weekend. 

Final Thoughts

The last three weeks of December produced stronger performance than expected, benefitting from holiday shifts, and the compressed period between Thanksgiving and Christmas. We had expected modest growth.  We expect performance to be soft again in the week ending 11 January, due to the calendar shift. Looking further ahead, we will be watching several things:

• The impact of the terrorist attack in New Orleans in addition to the two big events taking place in the city (Super Bowl and Mardi Gras)
• Weather across the U.S. and in Europe as well as the Los Angeles wildfires
• The U.S. Presidential Inauguration and changes in U.S. policies
• Calendar shift of Easter and Passover into April this year from March last year

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