Dominance of Leisure Travelers Continues to Shift Hospitality Occupancy Trends
At the latest Americas Lodging Investment Summit, Stephanie Linnartz, president of Marriott International, noted that hotel managers used to refer to Thursday as checkout night, the day of the week when business travelers typically returned home. But since 2021, she noted, that has changed. Now Thursday has become a check-in night, thanks to leisure travelers continuing to dominate hotel stays.
Leisure travelers are embracing weekends, and often Thursday nights are when they check in. This in turn has led to slightly higher-than-expected occupancy on Thursday nights in U.S. hotels.
Traditionally, Thursday and Sunday nights were considered ”shoulder” days, occurring on either side of the high-occupancy days of Monday through Thursday when business travel was still active. The national average occupancy for Wednesday nights in 2021 was 12.6 percentage points below the 2019 results, pointing at the sharp deterioration of group and corporate demand, which continues to ail the hotel industry to this day.
Conversely, last year, Saturday occupancy was just 4.1 percentage points below 2019 levels of 73.6%. Weekend demand has been robust and supported many properties that appealed to leisure travelers. Thursday occupancy strength is a function of this healthy weekend demand.
The extensive daily data set collected by STR, CoStar's hospitality analytics firm, affords another way to analyze Thursday's occupancy strength. Between 2013 and 2019, Thursday night occupancy ranged between two and four points below Wednesday, depending on the quarter.
Over the past year, this pattern has completely reversed and Thursday occupancy has averaged between 0.6 and 2.1 percentage points above Wednesday results.
Americans may not be traveling for work, but they are eagerly leaving town as the weekend approaches, and this happens more and more on Thursdays.
Looking ahead, it’s hard to predict when business travel and large conference gatherings will resume. As long as employees are allowed to manage their workload remotely, we expect continued healthy demand on Thursday nights.
For some workers this will always be the case, hinting at continued demand recovery not just over the weekends but also on shoulder days on each side of the weekend.
Copyright 2022 CoStar Group. All rights reserved. From https://www.costar.com. By By Jan Freitag, CoStar Analytics.