Juneteenth has been a U.S. federal holiday for just three years, but this year the shift of June 19 to the middle of the week disrupted U.S. hotel performance at the start of summer.
U.S. hotel revenue per available room decreased 2.4% year over year during the week of June 16-22, which was entirely the result of an occupancy decline of 1.8 percentage points. Average daily rate was basically flat at 0.1% growth year over year.
For most of 2024, weekdays – which comprise Monday to Wednesday – have been elevating overall weekly U.S. hotel performance. This year, the Juneteenth federal holiday occurred on Wednesday, June 19, essentially halting midweek business and group travel; a year ago, the holiday fell on a Monday. U.S. hotel RevPAR declined 5.8% on Tuesday and 5.9% on Wednesday, the result of occupancy down 3.3 percentage points and ADR down 1.4% for both days. Monday RevPAR increased 3.6% due the easy comparison to last year when Juneteenth fell on Monday. Thursday showed a slight RevPAR decline of 0.4%. Weekends (Friday-Saturday), which have produced negative RevPAR comparisons for 14 of the past 24 weeks, continued the streak the week of June 16-22 with a 1.3% RevPAR decline year over year.
Decreases More Pronounced in the Top 25 Markets
While weekdays have been elevating industry performance in recent months, weekdays in the top 25 U.S. hotel markets have provided the primary lift. Because of this, the Juneteenth shift had an even more dramatic impact on this segment. RevPAR declined 2.9% in the top 25 markets with Tuesday and Wednesday down 8.3% and 9.2%, respectively, with a generally equal decline in occupancy and ADR. The rest of the country also saw a RevPAR decline of 2%. However, Tuesday and Wednesday’s declines were less than half the amount seen for the top 25 markets with the decline due entirely to occupancy.
Only eight of the top 25 markets produced positive RevPAR comparisons with Seattle and Philadelphia reporting double-digit increases. These two markets also saw the greatest RevPAR gains on Tuesday and Wednesday, which were also in double figures.
No Chain Scale Immune to the Impact
From luxury to economy hotels, all chain scales saw a RevPAR decrease due primarily to occupancy declines. Luxury hotels were the exception with RevPAR down 3.6% on a 3.9% drop in ADR. Upper upscale saw the smallest RevPAR decline (-2.1%) followed by midscale (-2.5%), upscale (-2.8%) and upper midscale (-3.0%). Tuesday and Wednesday showed the greatest RevPAR decline across the top three chain scales. The bottom three chain scales did not experience as great a decrease on Tuesday and Wednesday with their largest declines on Sunday then Friday/Saturday.
Holiday Shift Also Affects Group Demand
Luxury and upscale hotel group demand decreased 7.2% compared to the same week last year, representing only the second group demand decrease over the past eight weeks. Again, affected by the Juneteenth holiday shift, the greatest year-over-year declines were on Tuesday (-12.6%), Wednesday (-16.3%) and Thursday (-10.1%). Only Sunday and Monday saw increases with Monday benefitting from an easy comp from last year. Positive year-over-year group ADR continued for the eighth week in a row, increasing 3.3% year over year. Four top 25 markets saw group occupancy increases greater than five percentage points, including Philadelphia, Anaheim (Orange County), Nashville and Oahu.
Better Days Ahead
The next week of data should show recovery of some business demand at U.S. hotels, which was delayed with the Juneteenth holiday. We expect a return of the strong performance in the top 25 markets on weekdays and improved group demand.
The week of July Fourth – the holiday is on a Thursday this year – is expected to produce a drop in ADR with a more dramatic decrease in occupancy. Note, AAA is expecting record road trips, and the TSA also expects record travel during that time while the recently reported decline in consumer confidence in May could temper these expectations.
The two weeks post July Fourth should show a week-over-week increase in occupancy with the metric reaching its apex in the week ending July 20.
Global Hotel Performance Shines Thanks to Sports and Concerts
Steady hotel RevPAR growth continues across the globe, fueled by ADR increases while occupancy slows. In particular, Europe experienced strong performance. After the first full week of the Euro 2024 tournament, Germany’s hotels saw a year-over-year RevPAR increase of 30%, primarily because of ADR, which increased 27.3%. All host cities saw positive ADR comparisons with the highest gain in Stuttgart at 88.7% year over year. The football matches also resulted in large year-over-year occupancy increases for Stuttgart – which rose 14 percentage points to 85% – and Dusseldorf, which increased 14.6 percentage points to 82.8%.
The Spanish hotel market continued with considerable year-over-year growth as RevPAR increased 24.4%. Barcelona hotels led all markets with a RevPAR increase of 39.9% due to the practice and qualifying nights of the 10th F1 race this year at the Circuit de Barcelona-Catalunya. Significant RevPAR gains were also seen in Madrid (+27.8%) and Balearic Islands (+15.2%).
In the U.K., a year-over-year RevPAR gain of 7.5% was entirely supported by ADR growth, which rose 7.3%. Taylor Swift’s Eras tour took her through Cardiff and London. RevPAR in London was up 7.5% year over year, while Cardiff saw a year-over-year decline of 5.8% with more performances last year in the same week by Harry Styles.
France saw a year-over-year occupancy decline of 4.2 percentage points to 78.3%, an 11.5% drop in ADR and a 16% slide in RevPAR. Last week was the first Paris Fashion Week of the year, and although absolute performance increased week over week, Paris hotels and the surrounding Ile-de-France region experienced year-over-year RevPAR declines of 35.4% and 23.9%, respectively. A lot of business and leisure travelers look to be avoiding the region ahead of the Olympics. Fortunately, occupancy on the books is nearing 80% for the Games.
Globally, summer should produce strong performance in cities across the northern hemisphere benefitting from concerts and sporting events. Additionally, most key European cities will also benefit from increased travel by Americans. In May, outbound travel from the U.S. was up 11% overall.
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.