The last three weeks of December produced stronger hotel performance than expected, benefitting from holiday shifts, and the compressed period between Thanksgiving and Christmas. Modest growth was originally projected for the period.
But in the last three weeks as 2024 ended and 2025 began, the global hotel industry took a bit of a rollercoaster ride in terms of performance.
Across most countries, the week preceding Christmas produced double-digit gains as global hotel revenue per available room rose 10.4%. There was a 1.8% decline during Christmas week followed by a second round of double-digit gains (+25.3%) during the week ending Jan. 4, 2025. Year-over-year growth in the most recent week benefited from a calendar shift as New Year’s Day was on a Wednesday versus Monday last year. A readjustment of the week’s performance matching the dates – not days – still revealed a healthy RevPAR increase of 9.4%.
US closed the year on a high note
Hotels in the U.S. followed a similar three-week pattern with RevPAR up 14.3%, then down 6.6%, and then up again 14.9%. As seen across the globe, the most recent week benefitted from the calendar shift; however, when readjusted to match dates and not days, RevPAR for the most recent week was up a modest 1.9%. The past three weeks combined to produce an unexpectedly strong December, which is estimated to show RevPAR up 4.8% compared to last year. That would be the greatest monthly increase since March 2023.
All chain scales experienced a similar trend with the greatest three-week volatility among luxury hotels, ranging from down 9.2% to up 37.3%, followed in lockstep by upper upscale – down 8% to up 18.0% – and down to economy hotels, which achieved a RevPAR range between up 1.4% to up 12.1%. The economy hotel segment did not experience a decline over the three weeks due in part to the continued demand impact from the fall hurricanes.
European hotels end the year strong
Hotel RevPAR growth throughout Europe seemed unstoppable in 2024 with all but six weeks showing gains. Europe also experienced the up and down trend over the past weeks, and the region closed the year with the second highest RevPAR gain of 2024. France, Italy, Germany, the United Kingdom and Spain all experienced 20%-plus gains in RevPAR during the most recent week. Overall, Europe hotel RevPAR over the three weeks was up 13%, led by Eastern Europe, where the measure was up 22.6%. Northern Europe posted the lowest RevPAR growth of 8.9%. For the continent and most subcontinents, except Southern Europe, occupancy drove the RevPAR growth with most of the growth coming from the week containing New Year’s Eve.
China’s hotels still lag in performance
Green shoots are somewhat evident in China as year-over-year declines are getting smaller, reflecting some improvement across the country’s hospitality industry. However, RevPAR percentage changes remained negative for the three weeks ending Jan. 4 with only nine markets posting gains, including Beijing (+0.4%), Hong Kong (+0.3%), Macau (+15.1%), Shanghai (+7.3%) and Shenzhen (+5.8%). A better view of conditions will come with the Lunar New Year performance at the end of January.
Hotel performance in the Middle East
In the Middle East, hotel RevPAR followed the global roller coaster pattern over the past three weeks ending with a RevPAR gain (+12.5%) close to Europe’s. Like Europe, Middle East hotel performance has been generally strong all year with RevPAR gains for most of the weeks in 2024. Kuwait’s hotels saw the largest RevPAR increase over the period (+114.6%) followed by Lebanon (+28.8%). The former was led by occupancy growth, while the latter grew via average daily rate (ADR). UAE RevPAR increased 11.1% on nearly equal growth in occupancy and ADR.
Japan highlights Asia-Pacific region hotel performance growth
The last three weeks across Asia-Pacific countries saw hotel RevPAR increase 8.1% with the strongest gains in Southeastern and Northeastern Asia. Hotel RevPAR in Japan grew 27.6% over the past three weeks to lead the continent.
Americas’ hotel performance tops the chart
The Americas region, excluding the U.S., posted the largest hotel RevPAR gains across the last six weeks (+15.9%). In the past three weeks, the region’s growth (+12.3%) was aligned with the increase seen in Europe. The growth was driven by average daily rate, specifically strong gains in Argentina, Mexico, Puerto Rico and Uruguay.
New Year’s Eve impact
New Year's Eve was the most significant market mover during the holiday period. The day of week in which the holiday occurs makes a big difference. In the U.S., the highest hotel occupancies over the past 24 years have happened on weekend nights Friday and Saturday, where occupancy averages 64.7%. Conversely, the lowest are seen on weekdays Monday to Wednesday at an average of 57.8%. Shoulder days Sunday and Thursday are only slightly better at 58.6%.
This year was particularly different with the holiday two days later from Sunday last year to a Tuesday. That put the year-over-year comparison against a post-holiday day last year – Tuesday, Jan. 2 – and resulted in a 100.9% RevPAR increase.
In a comparison of New Year’s Eve 2024 versus New Year’s Eve 2023, hotel RevPAR was down 2.2% on falling occupancy – down 2.3 percentage points – and rising ADR, which was up 1.9%. The decrease in occupancy was more than expected given the day shift. As compared to previous holidays, the more recent New Year’s Eve’s occupancy ranked 22nd of the 25 occurrences in our database. Occupancy (55.3%) was also the lowest of the four such holidays that have fallen on a Tuesday in that span. In 2019, when New Year’s Eve was also on a Tuesday, occupancy reached 59.4%.
Performance varied across the major global cities with the highest priced markets seeing the largest RevPAR gains, which were also inflated by the day-to-day comparison.
- Rio de Janeiro hotels saw New Year’s Eve RevPAR advance by more than 35% to $610.
- Paris’ strong hotel performance was lifted by the opening of Notre Dame Cathedral and an easier comparison because last year the city was put on a high-level security alert on the back of a terrorist event early in the month.
- Six hotel markets posted steady gains for the past three years including Oahu, Singapore, Sydney, Dubai, New York City and London.
- Orlando and Nashville saw generally flat RevPAR compared to New Year’s Eve last year.
- New Year’s Eve hotel RevPAR in Los Angeles was lower in 2024 after a strong performance in 2023 due to an easier comp to 2022 when the Rose Bowl was held a day later.
- STR believes the day shift is the primary reason New Orleans saw lower RevPAR following last year when it increased by more than 26%. It’s a drive-to market, which benefits more when holidays fall on a weekend.
Final thoughts
We expect hotel performance to be soft again in the week ending Jan. 11, due to the calendar shift. Looking further ahead, we will be watching several things:
- The impact of the terrorist attack in New Orleans in addition to the Super Bowl and Mardi Gras taking place in the city.
- Weather across the U.S. and in Europe as well as the Los Angeles wildfires.
- The U.S. Presidential Inauguration and changes in U.S. policies.
- Calendar shift of Easter and Passover into April this year from March last year.
Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights 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.