U.S. hotels experienced decent midweek performance in the week before Thanksgiving, a result of business travelers squeezing in trips before the holiday.
During the Thanksgiving holiday week, U.S. hotel occupancy dropped 13 percentage points from the prior week, which is in line with performance trends of the past 10 years, excluding 2020 and 2021.
Meanwhile, global hotel occupancy outside the U.S. continues to show year-over-year growth, with the United Kingdom and Japan posting the strongest performance across the largest countries. China continues to post the greatest year-over-year gains in hotel performance as the country has fully opened back up to travel.
Large-scale events continue to drive market-level hotel performance gains, which also give a boost to hotels at the country level.
The Formula 1 Las Vegas Grand Prix had an outsize impact on U.S. hotel performance with the market seeing ADR gains for the race week of 81.9%. The next week, the United Arab Emirates, gearing up to host COP28, posted the highest occupancy in the world.
US Performance
The week before Thanksgiving, U.S. hotel industry average daily rates were up 7% year over year. Occupancy remained essentially flat, down 0.4 percentage points from the same week last year, which limited revenue per available room growth to 6.3%. Occupancy declined by a greater percentage on weekends and the shoulder days of Sunday and Thursday, while weekdays remained unchanged compared to last year. That’s an indication that business travelers were on the road getting work done before the holiday.
U.S. hotel occupancy during Thanksgiving week was 49.8%, a 13-percentage-point drop from the previous week. Compared to Thanksgiving week last year, occupancy was down only slightly. Thanksgiving-week ADR increased less than 1% year over year.
Thanksgiving week typically does not produce strong ADR growth. Overall, this year’s Thanksgiving hotel demand was the fifth highest ever, which aligns with TSA airport screenings hitting all-time highs for the week.
As the usual, end-of-year slowdown takes place, events have more impact than if they occurred during higher demand periods.
For instance, the Formula 1 Las Vegas Grand Prix on Nov. 16-18 had a significant impact on the Las Vegas hotel market, which represents 3.1% of all U.S. room supply. When significant events occur in a market the size of Las Vegas, the impact is felt throughout the country. Minus Las Vegas, overall U.S hotel performance for the week before Thanksgiving still showed a significant rate increase of 3.6% year over year. That means Vegas contributed about half of the overall ADR gain in the U.S. for the week. Occupancy without Las Vegas decreased 0.1 percentage points, instead of a 0.4 percentage-point decline.
For the week before Thanksgiving, the top 25 markets on average increased ADR 11.7% year over year, with Las Vegas again having an outsize impact as ADR in the market increased 81.9% year over year. Las Vegas occupancy declined 10 percentage points as the major event and higher prices kept some tourists and conferences away.
San Francisco also had a strong week hosting the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week with an ADR gain of 26.2% driving RevPAR up 36.2%.
Five other top 25 markets — Boston, Denver, Houston, Seattle and Washington, D.C. — achieved year-over-year ADR increases greater than 10% for the week. The last time seven markets achieved ADR increases of 10% or better was in April 2023.
During Thanksgiving week, the top 25 markets took the biggest week-over-week hit as business and group travel ground to a halt. New York City and Oahu posted the highest occupancies across the top 25 markets. Across the rest of the country, leisure destinations such as the Florida Keys, Gatlinburg, Maui, Kauai and Fort Lauderdale posted the highest occupancy. The Florida Keys had the top occupancy in the nation for the first time since mid-April.
Across all markets, Gatlinburg hotels had the highest Thanksgiving Day occupancy followed by New York City, Long Island and Bergen/Passaic, New Jersey — the later three helped by the annual Macy’s Thanksgiving Day Parade.
Global Performance
For the week ending Nov. 18, global occupancy excluding the U.S. was 68.7%, up 1.1 percentage points from the prior week 4.6 percentage points year over year. ADR reached $135, up 9.7% year over year and resulting a 17.8% RevPAR increase to $93.
Japan led the top 10 countries in occupancy at 80.3%, up 0.2 percentage points year over year. This lines up with the opening of borders to 16 countries about a year ago, allowing travel to resume.
Over the Thanksgiving week, global occupancy excluding the U.S. was flat to the prior week, perhaps missing American travelers who stayed home for the Thanksgiving holiday. Compared to last year, occupancy increased 5.6 percentage points. ADR for the week was $134, up 9.8% year over year, boosting RevPAR by 19.4% to $92.
U.K. hotels posted the highest occupancy among the top 10 countries, with the highest hotel room counts, at 79.1%, up 1.8 percentage points year over year. London hotel occupancy was 83.4%, while occupancy outside of London was 77.3%. London has posted year-over-year occupancy gains in 42 of 47 weeks this year, showing that business demand has been returning throughout 2023.
The United Arab Emirates hotel market had a great week gearing up to host COP28, with the highest occupancy in the world as well as its fourth best results for occupancy and ADR this year. Occupancy came in at 88.9%, up 7.6 percentage points year over year, and ADR at $240, an 11.7% increase.
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.