U.S. hotel industry occupancy took an expected step back in the week that included Halloween.
For the week ending Nov. 4, hotel occupancy was 59.7%, down 2.5 percentage points compared to last year. This was expected and in line with past trends when Halloween has fallen on a Tuesday. The last time Halloween fell on a Tuesday was in 2017, when occupancy decreased 2.6 percentage points year over year.
U.S. average daily rate for the week increased 1.9%, halting the six-week streak of growth above 3%. Revenue per available room declined 2.1%, driven by the Halloween-induced occupancy drop.
The week of Halloween always results in a hotel performance slowdown because parents want to be with their children on that day. Hence, meeting planners and businesses avoid scheduling events around Halloween. The least impactful day for the industry is when Halloween falls on a Sunday. The most impactful, based on more than 20 years of results, is Thursday. Tuesdays are nearly as impactful. Therefore, the impact of Halloween this year was more significant than last year, which fell on a Monday and provided more opportunity for business and meeting travel afterwards.
While not a trick, there were a few treats in this year’s Halloween results. Overall, the fall in weekly demand was generally in line with the three other times Halloween has been on a Tuesday since STR began daily and weekly reporting. Weekly demand was down 2.5 million room nights week over week versus the average of 2.3 million. Additionally, this year’s All Hallow’s Eve saw higher occupancy than a year ago — 51.5% versus 50.1%. Both results, however, remain below the 20-year average of 52.8%. Halloween ADR increased by 4.5% compared to the Halloween 2022. So while it was down, there is still some evidence of recovery even in an off week.
Because of the pause in business and meetings travel, the top 25 markets took a slightly bigger hit from Halloween compared to the rest of the country. Occupancy dropped 2.8 percentage points year over year, with ADR increasing less than the national average and resulting in a larger RevPAR decline of 2.8%. Among all other markets, occupancy fell 2.3 percentage points and ADR increased 2.6%, netting a smaller RevPAR decrease of 1.4%.
Like last week, New York had the nation’s highest weekly occupancy at 83.1%, followed by Las Vegas at 81%. Both markets also saw solid RevPAR growth of about 6%. Also like last year, New York hosted the New York Marathon on Sunday, which likely benefited Saturday’s results as that day’s RevPAR increased by 11.6% on a 9.3% ADR gain.
Other notable highlights among the top 25 markets included Boston, St. Louis and Washington, D.C., where weekly occupancy increased by more than two percentage points year over year. These markets also saw solid RevPAR growth in the week: St. Louis (+20%), D.C. (+9%) and Boston (+6%). St. Louis hotels were bookended by strong performance on Sunday and Monday as well as the weekend, which featured two sold-out Metallica shows. Boston’s results were from robust growth early in the week while D.C., which saw solid growth on all days except Halloween Tuesday.
Notable non-top 25 market performance included Indianapolis hosting the Future Farmers of America convention Nov. 1-4 and recording the largest Halloween occupancy growth and RevPAR gain of any U.S. market. Twenty-seven markets also posted double-digit RevPAR growth for the week including Austin, Birmingham, Knoxville, Pittsburgh and Syracuse, with most of their growth coming on the weekend and related to college and pro football games.
With Halloween occurring on a peak convention and conference night, group demand among luxury and upper-upscale hotels slowed considerably, dropping 10.4 percentage points compared to last year. San Francisco was one market reversing this trend with group occupancy up 3.2 percentage points compared to the same week last year. Boston, Seattle, St. Louis and Washington, D.C., also saw year-over-year increases in weekly group occupancy.
Global Performance
While lower than a week ago, global occupancy, excluding the U.S., was up 4.2 percentage points year over year to 64.1%. Occupancy fell 6 percentage points versus the previous week, which is better than the 6.8-percentage-point drop seen the last time Halloween was on a Tuesday, in 2017. All continents saw a week on week decrease with Europe seeing a larger one, down 10.2 percentage points. Weekly global ADR increased 9.3% year over year, keeping RevPAR growth in double-digits at 16.8%.
Top 10 occupancy increased by 5.3 percentage points year over year this week. However, six of the top 10 countries, based on total supply, saw year-over-year occupancy declines. While this may seem alarming, based on the 2017 Halloween comparable year, the week-over-week occupancy fall was less severe, leading us to believe that the year-over-year decrease is normal. Canada and Germany saw Tuesday occupancy drop by more than 10 percentage points, and the U.K. posted a 5-percentage-point loss year over year.
While the decrease in top 10 occupancy due to Halloween may be normal, the gain for the group is only due to one country, China, which saw occupancy increase 15.5 percentage points year over year. Excluding China, occupancy for the remaining nine was down 0.9 percentage points year over year. Gains in Indonesia and Japan were unable to offset decreases elsewhere.
Outside of the top 10, the countries with the highest weekly occupancy were:
- Americas: Uruguay, 74.5%, up 6.8 percentage points year over year.
- Asia-Pacific: Fiji, 79.0%, down 0.7 percentage points year over year.
- Europe: Ireland, 80.6%, down 0.6 percentage points year over year.
- Middle East & Africa: United Arab Emirates, 84.9%, up 1.7 percentage points year over year. The UAE also had the highest occupancy of any country this week.
Final Thoughts
Halloween falling on a weekday caused U.S. performance to soften but this was no cause to be spooked. As we moved through each week this year, the hotel industry came closer to normal patterns and away from the large swings experienced since the end of the pandemic. We expect weekday growth driven by conventions, group meetings, business and leisure travel to continue reflecting normal seasonal patterns.
These normal travel patterns are also taking place in Europe, Asia, South America and Asia. Full international travel will be the final leg to global full recovery, which is now expected to recover in 2024 according to Tourism Economics.
Looking Ahead
In the U.S., expect strong week-over-week gains for the week ending Nov. 11, with the following week seeing a strong decline ahead of Thanksgiving. Thereafter, performance will continue to follow seasonal patterns as we near the end of the year. Globally, performance will stay strong, but it, too, will begin to slow as the year closes.
Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights at STR. William Anns is a research analyst at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.