Leading up to the final week of 2011, there was optimism among U.S. hoteliers that performance for the week between Christmas and New Year’s Eve was expected to be strong. Now that HotelNewsNow.com’s parent company, STR, as well as other data researchers, have released performance numbers surrounding that timeframe. Let’s revisit the data to see exactly how hotels in the United States performed.
With the help of STR’s Jan Freitag and Pegasus Solutions’ Julie Parodi, we can examine which segments of the U.S. hotel industry celebrated the holidays with joy and cheer and which were more Scrooged. Also interesting to note is which U.S. markets within the country fared better and which weren’t able to capitalize on the holiday spirit.
Use these nuggets of holiday data to plan your December 2012 strategy, use them for fun trivia at your next meeting or simply chalk them up to a few nerds extrapolating data because … well … we can.
How’d the week fare?
For the week of 25-31 December, U.S. occupancy was reported at 49%, average daily rate at US$107.56 and revenue per available room at US$52.69. While those numbers don’t jump out as overly impressive, it’s important to look at them in comparison.
First, they measure up well against the same holiday week in prior years. All three numbers outperformed 2010 and even back to the peak years of 2006 and 2007. In 2007, the week of 23-29 December saw occupancy at 42.8%, ADR at US$102.17 and RevPAR at US$43.76. Keep in mind that week didn’t include New Year’s Eve.
Also, the holiday week of 2011 significantly outperformed the two previous weeks in December. Average daily rate was less than US$100 in the previous December weeks and the week of 18-24 December saw occupancy as low as 37.3%.
“The data revealed that reservations were, as anticipated, more consistently elevated for stays during the time period from 23 December through 2 January, between the Christmas and New Year’s holidays, as opposed to the week preceding Christmas,” Pegasus’ Parodi said. “Those traveling over the holidays saw that week as being the ‘sweet spot’ during which to get away given the timing of this year’s holidays and company-provided days off. Whereas last year holiday travel had a greater tendency to fall over the two-week period prior and post Christmas.”
Most notable among the holiday data is how well the Oahu, Hawaii, market performed amongst other U.S. markets on both Christmas Eve and New Year’s Eve, as evidenced below.
How do hotels perform on Christmas Eve?
Not good. As one would expect, not many Americans stay overnight in hotels on Christmas Eve. In fact, reported occupancy in the United States on 24 December was 35%, ADR was US$95.29 and RevPAR was US$33.34.
However, when you compare those numbers to previous Christmas Eves, it paints a slightly different picture. The numbers outpace Christmas Eve 2010 (32.3% occupancy, US$91.98 ADR) and even pre-recession Christmas Eve 2007 (31.3% occupancy, US$97.57 ADR). Occupancy, in fact, was the highest it has been on this year’s Christmas Eve since 2005, when it was reported at 35% and ADR was US$86.01. 2005 was the last time Christmas Eve fell on a Saturday.
The luxury segment reported surprisingly strong numbers on Christmas Eve—occupancy in the luxury segment was 45.4% and ADR was an impressive US$314.23.
“This could be a getaway night for the luxury segment,” Freitag said. “If there ever was a night, people are probably more conducive to splurging on Christmas Eve. They’ll say ‘get me the junior suite or the room with a view.’”
Oahu performed the best on Christmas Eve, with occupancy at 81% and ADR at US$202.93. Orlando was the closest U.S. city in occupancy, reporting 69.9%.
Do people stay at hotels on New Year’s Eve?
New Year’s Eve is a different story entirely. It’s a popular night for hotel stays, and many cities reaped the benefits. Occupancy in the United States on 31 December was 64.8%, ADR was US$124.30 and RevPAR was US$80.58.
“You don’t have to promote New Year’s Eve,” Freitag said. “Everyone knows when that is.
“It’s about creating value,” he added. “Everyone wants it to be a valuable night. Hoteliers have to continue to evolve in their thinking and give the people what they want—continue to provide that memorable experience.”
The luxury segment reported the best occupancy (87.9%) and highest ADR ($351.10). The economy segment reported the lowest occupancy (55%) and lowest ADR ($57.40).
Performance numbers from some top 25 cities in the United States on New Year’s Eve were simply amazing. Oahu led in occupancy at 95.5%, followed by Orlando (93.2%) and New York (93%).
New York—site of the ball drop, of course—reported an incredible ADR of US$388.34, followed by Miami at US$270.86 and Oahu at US$261.09.
“Holy smokes,” Freitag said while examining the data. “Miami was at around US$150 year to date, so you’re adding US$120 to that.”
Compared to previous New Years Eves, hotel performance in 2011 shined. Last year, occupancy was 61.7% and ADR was US$116.80. Before the downturn, occupancy on New Year’s Eve in 2007 was 53.6% and ADR was US$126.03. The last time New Year’s Eve fell on a Saturday, in 2005, occupancy was 66.3% and ADR was US$109.52.
“The takeaways from New Year’s Eve and Christmas Eve are that there is probably potential to upsell to the best and most desirable room,” Freitag said. “People want to have a nice environment those nights.”
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