REPORT FROM THE U.S.—The number of Labor Day travelers is projected to be up slightly this year, but whether that translates into a noticeable performance bump in United States hotels is uncertain.
Travel association AAA is predicting a 9% increase in the number of Americans traveling 2-6 September, with approximately 34.4 million holiday makers taking a trip at least 50 miles from home.
“While media reports on the state of the U.S. economy are mixed, many Americans are still interested in taking one more trip as the summer travel season comes to a close,” said Glen MacDonell, director of AAA Travel Services in a news release. “It is encouraging to see more Americans planning to travel to visit family, friends and exciting vacation destinations.”
But many are skeptical as to whether hotel performance will follow those traveler increases in lockstep.
Average daily rate for the period of 3-6 September in the top 25 North American markets is up only 1.8% after last year’s dismal performance as of 23 August, according to research firm Rubicon. Reserved occupancy for the same period is up 3.6%.
“It’s up versus the same weekend last year, but not dramatically up,” said Tim Hart, the company’s president and CEO. “It’s a little bit closer to level than I would call it up significantly.”
The transient segment is seeing more impressive gains in ADR (+4.8%), though occupancy is near flat at +0.5%.
Hotel rates for AAA 3-diamond properties are expected to increase 6% from a year ago with travelers spending an average of US$139 per night compared to US$132 last year, according to the association. Travelers planning to stay at AAA 2-diamond hotels can expect to pay 2% more at an average cost of US$102 per night.
“Right now, it’s a little more wait and see,” said Adam Weissenberg, vice chairman of U.S. tourism, hospitality and leisure for Deloitte.
Though summer’s other unofficial bookmark, Memorial Day, showed far greater promise in its preceding weeks, build-up to the Labor Day holiday has been marred by stagnant job recovery and more discussion about a double-dip recession.
“It’s actually put a little bit of a damper on potential Labor Day travel,” Weissenberg said.
There is a chance of a more impressive performance uptick, however. Weissenberg hopes travelers simply might be waiting until the last minute to book travel.
“It seems like a lot of people are still taking vacation, so hopefully that will pick up,” he said.