Upcoming holiday season impact on U.S. hotel performance

Analysis by Isaac Collazo

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.