REPORT FROM THE U.S.—More American travelers are expected to hit the road this Labor Day weekend than in the past three years, and hoteliers already are reaping the benefits.
AAA Travel projects 33 million Americans will journey 50 miles or more from their homes during the Labor Day holiday weekend, a 2.9% increase from the 32.1 million people who traveled last year. The increase will help fuel a 4% boost in average daily rate to $154 at AAA 3-diamond hotels compared to $148 last year, the automobile association reported. Travelers planning to stay at 2-diamond hotels can expect to pay 6% more at an average cost of $117 per night.
Las Vegas, New York and Atlanta are the most popular U.S. hotel destinations by absolute search share rank, according to data from metasearch Kayak. For rooms over that weekend, Kayak-listed rates in each city are averaging $183.74, $275.63 and $204.21, respectively.
Orbitz shows the top three Labor Day destinations as Las Vegas (average room rate $133), New York ($218) and Chicago ($169). Atlanta is No. 4 on the list with an ADR of $115.
Advanced bookings throughout Best Western International’s U.S. portfolio, which comprises approximately 1,900 hotels, are up 10% for the 31 August through 3 September holiday weekend.
In-town hotels are seeing even higher increases at 21.3%, with a 6% increase in ADR, the Phoenix-based hotel membership group reported. Suburban hotels also are reporting a 6% increase in ADR.
Leisure Hotels & Resorts, a Leawood, Kansas-based management company with 12 hotels scattered throughout the Midwest, is reporting a similar uptick in business for the holiday weekend.
“We’re anticipating a great Labor Day weekend. Our advanced sales are up over last year, probably about 18%—maybe even 20%. We’re getting a much stronger rate as well,” said Jamie Tatge, director of operations.
Rates at the group’s resorts, which account for approximately half the total portfolio, are up more than $25 this year, he added.
Tatge said consistent warm weather helped make it a good summer for Leisure’s hotels. “I also feel that people are loosening up a little bit with their expenditures to start traveling again,” he said.
Chris McGinnis, business-travel analyst and director of Travel Skills Group and contributor to Best Western's YouMustBeTrippin.com, made a similar observation.
“The economy is still not in great shape, but people have figured out a way to make their Labor Day trips. They’re used to them,” he said.
Fear over fuel
A recent uptick in fuel prices is not having an impact on bookings, McGinnis said.
The average price of a regular gallon of gas in the U.S. as of Thursday afternoon was $3.72, according to AAA’s Daily Fuel Gauge Report. That’s up slightly from the same time last week ($3.72) and more significantly from the same time a month ago ($3.49). One year ago, the average price of a regular gallon of gas was $3.58.
“There’s a lot of fear going on about Labor Day because of the recent increase in gas prices. … People have already made their plans before gas prices started to go up, and they’re sticking with them,” McGinnis said.
But just because plans have been made does not mean hoteliers should ignore the increase in fuel prices, he said. It’s in hoteliers’ best interest to be as accommodating to travelers as possible.
Travelers will “probably be more cost conscious when they get out there,” he said. “Focus on the value added by staying at your hotel. If you have free breakfast or free Wi-Fi or free parking or anything that’s going to keep their costs down, I would focus on that part.”
A strong summer
The Labor Day weekend is set to cap off a particularly strong summer season for U.S. hoteliers.
The U.S. hotel industry sold more roomnights in July than in any other month since STR, parent company of HotelNewsNow.com, began tracking performance data in 1987.
During June, occupancy was up 4.3%, ADR was up 5% and revenue per available room was up 9.5%, according to STR. While not as strong, performance during July was still showing improvement; occupancy, ADR and RevPAR increased 0.5%, 3.8% and 4.3%, respectively.
“(The summer season was) way better than what we expected,” Tatge said, adding top-line revenue at Leisure Hotels & Resorts was up 27%. Much of that was attributable to weather, which saw less rain than in years past.
“It’s been good for hoteliers, and it’s been good for the travel industry in general,” McGinnis said of the past few months.
But while Labor Day is traditionally viewed as the unofficial end to the summer travel season in the U.S., he said that reality is no longer the case. Schools are getting back in session earlier and earlier, McGinnis said, which means less families are viewing the three-day holiday weekend as their last chance to travel.
“That is usually when demand starts to really take a dive compared to the peak summer travel season. We’re in that period now. The bookend has moved from Labor Day to probably August 20,” he said.