How does the day of week factor into rate growth?
How does the day of week factor into rate growth?
12 DECEMBER 2016 9:47 AM

This STR analysis looks at day-of-week patterns and how they have affected room rate growth since 2000. 

By  Carter Wilson  and  Ali Hoyt

BROOMFIELD, Colorado—There has been concern and confusion about the hotel industry’s inability to grow average rates at meaningful levels. In an earlier article, we posited that surely one factor is the industry’s reliance on online travel agencies. Another factor is the sheer visibility today’s consumers have into the landscape of hotel pricing versus 20 years ago, when high occupancy levels resulted in much more robust average daily rate growth.

Another possible reason could be a shift into day-of-week patterns. Transient demand led the industry out of the Great Recession, and while group demand has seen decent gains in the last two years, the overall mix in the industry leans much more transient than it did pre-2009. And a good chunk of this is thought to be surges in leisure (or weekend) demand. Perhaps there is something to be learned from looking beyond just overall ADR growth and viewing it by day-of-week, to see if some days are truly experiencing robust rate growth while other days flounder.

We pulled daily data as far back as it’s been reported to STR (2000), and created running 12-month totals by day of week. (STR is the parent company of Hotel News Now.)

(Click the above chart to enlarge)

On an absolute basis, the spread in day-of-week pricing is historically narrow. Wednesdays have always commanded the highest rates, while prior to the 2009 downturn, Fridays were the lowest. With the rebound in transient (leisure) demand in 2010 and continuing until the present, Fridays became a higher-demand day of week, and pricing increased. Sundays became the new low-ADR day, and the gap between Sunday and the other days of the week had widened in the last few years.

(Click the above chart to enlarge)

Likewise, ADR percent change by day of week has also been similar historically, with no major swings since 2001. Focusing just on the last 12 months, Thursday, Friday and Saturday nights have been commanding the greatest increases, though these days are losing growth rapidly and now represent just a slight spread over the growth of the remaining collective days of the week. 

Overall ADR growth since 2001 is narrow between the days-of-week, though Fridays and Saturdays have exhibited the most robust growth since the end of the Great Recession. Weekend rates were least affected during the downturn, and strongest coming out of it. However, since weekend rates aren’t disproportionately lower than mid-week days, the shift in growth toward weekend demand doesn’t seem to add much in terms of explanation for the industry’s overall inability to drive ADR growth in a time of record occupancy levels.

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.

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.