US hotel performance dips with weekday Fourth of July
US hotel performance dips with weekday Fourth of July
03 JULY 2019 8:11 AM

When the Independence Day holiday in the U.S. falls on a Sunday, data shows a better-than-expected lift to hotel performance. The same is not true for the rest of the week.

HENDERSONVILLE, Tennessee—Analysis of U.S. hotel demand, occupancy and revenue per available room indicates significant dips when the Independence Day holiday, or Fourth of July, lands on Monday through Wednesday, and the greatest lift to performance when the holiday falls on a Sunday. When the Fourth of July falls on Thursday (as it does this week), Friday or Saturday, U.S. hotels show small dips in occupancy with small gains in average daily rate.

Research by STR (parent company of Hotel News Now) shows that hotel performance on and around the Fourth of July is highly dependent on the day of the week on which the holiday lands. We indexed actual (same-day-of-week) daily performance to comparable non-holiday dates surrounding the Fourth of July, for the period of 2004 to 2018, and from this, day-of-week patterns emerge across U.S. hotels.

When the Fourth of July falls on Monday, Tuesday or Wednesday, nationwide occupancy falls far below normal, averaging a 35% deficit across the three days. Independence Day falling on Tuesday (which occurred in 2009 during the Great Recession, and then again in 2015) averaged the steepest occupancy deficits (50% compared to the seasonally expected 77.3%). On Sundays, the industry has averaged small but notable occupancy gains of around 10% with ADR gains of 5%. Performance shortfalls/gains related to the holiday appear to be driven largely by occupancy rather than ADR.

The chart below demonstrates how the “travel holiday” extends around the Fourth of July in relation to RevPAR. When the holiday falls on a Sunday, the spike in demand (and modest boost in ADR) results in a healthy lift to RevPAR. Moreover, Sunday performance also sees a remarkable boost when the Fourth of July occurs on either a Monday or Tuesday. It is likely that travelers are extending their holiday travel (and overnight stays) to take advantage of a four-day weekend. During the past 15 years, Mondays through Wednesdays that are nearest to the Fourth of July holiday experienced major RevPAR deficits from what is normally expected this time of year.

M. Brian Riley and Brannan Doyle are research analysts 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.

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