A year ago, Thanksgiving occurred in the third week of November, while in 2024 Thanksgiving fell on the fourth week of the month. This shift created significant performance fluctuations for the U.S. hotel industry but the net result across the two weeks was positive with revenue per available room up 8.8%.
Nationwide, U.S. hotel RevPAR increased 31% year over year for the week ending Nov. 23 then decreased 10.5% for the week ending Nov. 30. The 8.8% gain over the two-week period was the combined result of occupancy increasing 3 percentage points and ADR rising 2.9%. The strong two-week performance occurred in both the top 25 U.S. hotel markets – where RevPAR rose 8.4% – and the rest of the country, where RevPAR increased 9.3%.
Markets affected by Hurricane Helene and Hurricane Milton continued to see year-over-year increases. Over the past two weeks, seven markets – Augusta, Georgia; Columbia, South Carolina; Florida Central South; Greenville/Spartanburg, South Carolina; North Carolina West; Sarasota, Florida; and Tampa – posted significant RevPAR gains (+39.7%) with occupancy being the main driver (+14.9 percentage points) 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, U.S. hotel demand was the second behind only 2021, and hotel occupancy was higher than the holiday week last year (50% to 49.4%). When narrowing the focus to the traditional Thanksgiving holiday travel period from Wednesday to Saturday, hotel RevPAR increased 4.2% from last year on nearly equal gains in occupancy and ADR. That beats our projection for lower year-over-year comparisons. Hotel occupancy was also stronger than projected at 54.8% versus 53.1%.
Between Wednesday and Saturday, U.S. hotel room demand increased 2.8% year over year and was the second highest on record behind 2021. Hotel markets outside the top 25 led the way with a 3.9% increase versus a 1.2% increase 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 hotel occupancy during the Thanksgiving travel period was 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 in economy hotels, where RevPAR was up 8.5% on a 2.7-percentage-point increase in occupancy. The economy segment also ranked among the largest ADR gains at 2.8% with midscale seeing the highest growth, up 3.3%.
All chain scales improved with continued bifurcation
Across the two-week period, all hotel 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 Nov. 23 and the following week producing declines across all chain scales except midscale and economy hotels. 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 Nov. 23 and sank the following week, still resulting in a net positive gain. For the week ending Nov. 23, 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%.
Closing the books on November and looking ahead to December
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%). This creates a reverse bifurcation, with lower-priced chains seeing higher RevPAR gains than the higher tier, with luxury hotels somewhat of an exception. With the November preliminary results, year-to-date RevPAR rose 1.6%, all on ADR growth, which rose 1.6%.
The December holiday season will be compressed because of the late Thanksgiving, which should lift business travel and conferences. That is evident in our Forward STAR data. The Hanukkah observance overlaps with Christmas this year unlike last year when it started on Dec. 7. Leisure travel during the month is expected to slow with the shortened school break season.
Non-stop global growth continues
Outside the U.S., global hotel RevPAR advanced 10.2% during the week of Nov. 24-30. 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 countries with the highest supply of hotel rooms with RevPAR up 43.3%, which was partially affected by the calendar shift. RevPAR the previous week in Mexico was almost flat, up just 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.
Looking ahead, the top countries for hotel performance around the globe are expected to continue seeing strong yet slowing RevPAR growth.
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.