Understanding performance during the Christmas holiday
 
Understanding performance during the Christmas holiday
19 DECEMBER 2019 8:53 AM

A visual look at RevPAR performance during the Christmas holiday period since the 2000s shows a pattern of sluggish performance on Christmas Day and a lift the day after. Here’s how 2019 should pan out.

HENDERSONVILLE, Tennessee—For the U.S. hotel industry, the days around the Christmas holiday are always slow. With sun and sand destinations excepted, a majority of U.S. markets should expect some of their lowest performance days of the year. While this period is normally slow, analysis shows that the day of week for this holiday does matter, especially to performance on the week following Christmas.

The following interactive visualization provides a long-term view of national revenue-per-available-room performance during the Christmas holiday period. Several key patterns emerge through the time series data:

  • Industry RevPAR performance over the extended holiday has seen substantial gains since the 2000s when controlled for inflation (2018 base value).
  • These gains are most punctuated beginning in the year 2014 and moving forward.
  • Data further indicate that almost all of those annualized RevPAR increases are derived through gains in transient RevPAR.
  • The last days of December following Christmas and leading into New Year’s Eve record consistently higher RevPAR compared to those days immediately leading into Christmas Eve/Day.

One key sub question going into this analysis was if the day of week on which Christmas Day occurs makes a major difference to that single day’s performance. The answer for 25 December is that it is a mixed picture.

  • Since the last recession (2013-2018), regardless of what day Christmas Day falls on, RevPAR on that day is sluggish like its preceding days with the possible exception of Friday (2015).
  • Beginning 26 December, the industry starts gaining serious RevPAR lift irrespective of which day Christmas occurs.
  • The consistent pattern for the week that follows Christmas shows industry RevPAR making steady improvements through the following Saturday that leads into the New Year’s Eve week.

This year, Christmas Day occurs on a Wednesday. Should past broad patterns hold, we might expect to see a sharp increase in industry RevPAR starting on Thursday after a super slow start of the week. Those gains should continue through Saturday, 28 December 2019.

Anecdotally, business travel is diminished over the holiday period and there is likely some uptick in leisure travel that is making up a portion of that shortfall (note: STR data does not distinguish between business/leisure stays). A near absence of group bookings (which is most typically associated with business travel) for the holiday week is a major part of the overall industry slowdown.

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.

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