U.S. Fourth of July hotel performance analysis

The Fourth of July holiday has long served as a key indicator of leisure travel and lodging demand in the U.S. Amid ongoing macroeconomic pressures and weakening hotel performance metrics, this year’s holiday weekend faced heightened scrutiny. Fortunately, the holiday passed the test when it came to hotel demand.   

Record-high July 4 room demand 

For just the second time since daily reporting began in 2000, the U.S. hotel industry topped 4 million rooms sold on July 4.  

At 4,092,239 room nights, this year topped 2014 (also a Friday) and 2015 (a Saturday) by more than 3,000-plus rooms.  

Surrounding days healthy as well 

Expanding to the full holiday week, demand (24.42m) was right in line with the past two years but lower than previous highs in 2019 (25.08m) and 2015 (26.64m). When looking at the weekend, demand was also the third highest among Fourth of July holidays that fell on a Friday or Saturday.  

Occupancy not as impressive 

This year’s holiday ranked a little lower when it came to occupancy, as supply growth in both the short- and long-term pushed levels down. For the full week, occupancy (61.1%) was lower than each of the last two years and well below the high in 2015 (68.2%). Among instances when the Fourth of July fell on a Friday or Saturday, occupancy (71.7%) ranked fifth. 

Most segments grew demand but not occupancy 

Compared with other Fourth of July holidays on Fridays and Saturdays, room demand was higher for all chain scales except Economy and Independent. Again, given supply growth, the story looks a little different when shifting the focus to occupancy as each scale came in lower.  

ADR up for the holiday, down for the week 

As expected with the holiday shift from Thursday last year to Friday this year, there were year-over-year fluctuations in average daily rate (ADR). Friday (4 July) came in at +3.4% whereas Thursday (3 July) was -7.8%. There were also smaller increases earlier in the week (Sunday-Tuesday), which tracks with our previous analysis of forward-looking occupancy, as a Friday holiday left more time to squeeze in business travel and groups. Overall, for the week, ADR was down 0.9%.  

Continuation of recent trends 

The week of the Fourth of July this year looked like the late-spring and early-summer periods thus far. Demand has remained steady, but occupancy sits lower due to supply growth. Rate growth is softening, and revenue per available room (RevPAR) remains flat to slightly down.  

Lack of growth in the top line of courses creates more pressure on profitability. Recent months have shown that real growth remains stalled, highlighting persistent margin compression and operators still feeling the impact of higher operational expenses and inflation.