The Memorial Day holiday period shows large performance gains on the Saturday and Sunday leading into the official holiday, but data shows there have been sizable drops starting on the Monday holiday and lasting through the next weekend.
HENDERSONVILLE, Tennessee—Hotels see a boost in occupancy, average daily rate and revenue per available room in the days leading up to Memorial Day, but that gain is a short-lived one.
An STR review of U.S. performance data from the past Memorial Day holiday periods shows a major boost to occupancy with smaller indexed percentage lift in average daily rates for the Saturday and Sunday leading into the Monday Memorial Day, resulting in amplified revenue per available room gains for the weekend. In contrast, there are seasonally adjusted performance shortfalls across indicators just before and especially after the holiday weekend. STR is the parent company of Hotel News Now.
For this data snapshot, STR studied U.S. hotel performance data over the past three Memorial Day weekends (with shoulder period) from 2016-2018.
A comparison of daily performance indices on occupancy and ADR demonstrates that occupancy is the primary driver to the Memorial Day period’s RevPAR changes. Saturday’s Occupancy averaged 85% for the three-year period compared to a normal of 76%, while Sunday’s occupancy was 66.4% compared to an expected 52.6%. On a national basis, about travelers filled 1.3 million extra rooms above normal for the Memorial Day Saturday to Sunday period.
As indexed percentage lift, ADRs do not show as wide of swings as did occupancy, but operators still collectively demonstrated some room pricing optimization (up $12 and $6 above expected on holiday weekend Saturday and Sunday, respectively) as well as discounting when demand/occupancy fell below expected. Average rates on the Monday Memorial Day were the most steeply discounted, averaging $18 below the normal ADR of $129 per night (46% below normal).
Daily RevPAR performance over the holiday period provides a strong indicator to operators’ collective bottom line. National RevPAR for the Saturday (up $22 or 23.5% above normal) and Sunday (up $21, or 33.1% above normal) leading into the Monday holiday were much higher than expected for this time of year. In contrast, average RevPAR on the Monday Memorial Day was exceptionally low (down $41, or 46.5%). RevPAR deficits continued through the following weekend with each day showing a small recovery towards expected performance levels.
M. Brian Riley is a research analyst with STR’s Market Insights division.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.