Highlights

• Thanksgiving shift produced net positive for the last two weeks in November
• Second-highest Thanksgiving week demand on record
• Hurricane-affected markets continued to see increases
• Group demand soared then plummeted because of the calendar shift
• Non-stop global growth continues

Thanksgiving shift a net positive

The Thanksgiving holiday occurring in the third week of November last year vs. the fourth week this year created significant performance fluctuations. However, the net result across the two weeks was positive with revenue per available room (RevPAR) up 8.8%.

RevPAR increased 31.0% year over year (YoY) for the week ending 23 November then decreased 10.5% for the week ending 30 November. The 8.8% gain over the two-week period was the combined result of occupancy increasing 3 percentage points (ppts) and ADR rising 2.9%. The strong two-week performance occurred in both the Top 25 Markets, with RevPAR up 8.4%, and the rest of the country with RevPAR up 9.3%.

Markets affected by Hurricane Helene and Hurricane Milton continued to see YoY increases. Over the past two weeks, seven markets (Augusta, Columbia, Florida Central South, Greenville/Spartanburg, North Carolina West, Sarasota and Tampa) posted significant RevPAR gains (+39.7%) with occupancy being the main driver (+14.9 ppts) before ADR (+10.1%). The last two weeks align with the longer-term trend of the last two months in the region.





Second strongest Thanksgiving week behind 2021

Looking specifically at Thanksgiving week compared to all others on record, demand was the second behind only 2021, and occupancy was higher than the holiday week last year (50% to 49.4%). When narrowing the focus to the traditional Thanksgiving holiday travel period (Wednesday-Saturday), RevPAR increased 4.2% from last year on nearly equal gains in occupancy and ADR. That beats our projection for lower YoY comparisons. Occupancy was also stronger than projected, 54.8% versus 53.1%.

Room demand, which was also the second highest on record (2021) for the Wednesday-Saturday period, increased 2.8% YoY. That growth was led by markets outside the Top 25, which saw an increase of 3.9% versus 1.2% for the Top 25 Markets. Not surprising, nominal ADR and RevPAR were the highest ever for the holiday period. Adjusting for inflation, both measures were below the record set in 2021, however, real RevPAR was higher than a year ago.

The highest occupancy during the Thanksgiving travel period was seen in Upscale hotels (58.9%) followed by Upper Midscale (57.6%). RevPAR in these two chain scales increased 4.3% and 5%, respectively. However, the largest RevPAR growth during this time was seen in Economy hotels, where RevPAR was up 8.5% on a 2.7ppts increase in occupancy. The Economy segment also ranked among the largest ADR gains (+2.8%) with Midscale seeing the highest growth (+3.3%)

All chain scales improved with continued bifurcation

Across the two-week period, all chain scales increased RevPAR with occupancy having the greatest impact at the top and ADR at the bottom. The top three chains scales posted double-digit increases, while the bottom three were high but below 10%. Performance for individual weeks saw all chains scales posting significant RevPAR gains the week ending 23 November and the following week producing declines across all chain scales except Midscale and Economy. Hurricane Helene and Hurricane Milton recovery efforts have had a much greater impact on hotels in the lower classes.



Group demand flip flop

Group demand among Luxury and Upper Upscale hotels soared the week of 23 November and sank the following week, still resulting in a net positive gain. For the week ending 23 November, group demand came within 1,200 rooms of 2019 levels. The following week, group demand dropped to under 500,000 rooms. Combining the two weeks produced a net demand gain of 15.9% with ADR up 2.5%, indicating the continued health of events and conferences along with some compression ahead of a shortened holiday season. Transient demand grew both weeks at 4.1% and 6.6%, respectively, with ADR increasing 1.5%.


Non-stop global growth continues

Global RevPAR, excluding the U.S., advanced 10.2%. ADR has been the primary driver for the past eight weeks, holding above 5% each week. In the most recent week, ADR increased 7.6% as occupancy increased less than three percentage points to 68.2%.


Mexico took top honors among the highest supply countries with RevPAR up 43.3% (partially impacted by the calendar shift). RevPAR the previous week in Mexico was almost flat at +0.7%. Baja California, the Mexican Caribbean and Pacific Central led Mexico’s strong performance.

Japan continues to post robust RevPAR, increasing 31.3% entirely on ADR (+28.7%). All top countries posted positive RevPAR comparisons with the only exception being Germany.

China saw its first RevPAR gain (+2%) of the past eight weeks on occupancy gains as ADR continued to fall. ADR has decreased in 43 of the past 48 weeks.


Final Thoughts

November came to a solid close. Preliminary results for the month show RevPAR up 2% on occupancy (+1.5%) as ADR growth remained anemic (+0.7%). Room demand for the month was the second highest in STR history, behind 2019, when Thanksgiving also fell on the 28th. Lifted in part by hurricane recovery, Economy hotels are expected to see the largest November RevPAR growth of any chain scale (+5.4%) followed by Midscale (+4.9%), creating a reverse bifurcation, with lower-priced chains seeing higher RevPAR gains than the higher tier, with Luxury somewhat of an exception. With the November preliminary results, YTD RevPAR was at +1.6%, all on ADR (+1.6%).

The December holiday season will be compressed because of the late Thanksgiving, which should lift business/conference travel. That is evident in our Forward STAR data. The Hanukkah observance overlaps with Christmas this year unlike last year when it started on 7-December. Leisure travel during the month is expected to slow with the shortened school break season. Top global countries are expected to continue seeing strong yet slowing RevPAR growth.