Hotels in Flux: U.S. Elections, Hurricanes, and Global Trends Shape Weekly Performance

Election Week: Mixed Signals for U.S. Hotels

The U.S. hotel industry felt the impact of the national elections as RevPAR (Revenue Per Available Room) declined by 3.5%, with sharper drops in the Top 25 Markets (-4.7%). The largest losses occurred on Monday and Tuesday, directly tied to election activities.

However, not all markets suffered. Key cities like Las Vegas, Chicago, and Tampa defied the trend, reporting RevPAR growth on election days. These outliers suggest localized dynamics, such as conventions or other major events, buffered the impact in certain areas.

High-End vs. Budget Hotels: A Shift in the Spotlight

The performance of hotel segments during the week signaled a shift:

• Upper Upscale hotels experienced the steepest decline in RevPAR (-9.1%), underscoring a demand slump among premium properties.
• Economy chains, in contrast, recorded a +2.9% RevPAR increase, benefiting from travelers seeking more affordable options amidst economic uncertainty.

This reversal in performance dynamics may hint at changing traveler behavior, with budget-conscious choices gaining momentum over luxury preferences.

Regional Growth Amidst Challenges

While hurricanes disrupted some areas, impacted markets showed resilience. Hurricane Helene and Hurricane Milton fueled recovery efforts, driving RevPAR growth of 18.1% in seven affected markets. In parallel, college football games spurred weekend RevPAR gains across submarkets.

However, group demand among Luxury and Upper Upscale hotels plummeted 16.8%, reflecting a cautious corporate and group travel segment, particularly during election week.

Global Highlights: A Surge in Japan, Slower Growth in China

Outside the U.S., global markets thrived, with RevPAR increasing by 10.6%, marking a third consecutive week of double-digit gains:

• Japan led the charge with a +36.4% RevPAR increase, driven by soaring ADR (Average Daily Rate) as demand surged post-pandemic.
• China posted a fourth straight week of rising room demand but saw a -3.3% drop in RevPAR due to declining ADR, highlighting pricing pressure in the market.

Looking Ahead: Seasonal Opportunities and International Strength

As the year-end holidays approach, RevPAR in the U.S. is expected to rebound, supported by:

• A compressed December holiday season, driven by Thanksgiving occurring a week later than usual.
• Anticipated leisure travel demand and festive season bookings.

Globally, while international RevPAR growth remains strong, the pace of expansion is expected to moderate, with markets like Japan and Europe sustaining momentum.

Phil Andreopoulos, Chief Sales & Marketing Officer at Marriott International EMEA, reflects on these dynamics:
“Navigating elections, regional disruptions, and evolving travel preferences requires adaptability. The industry is poised to finish the year on a high, with domestic recovery and international resilience driving performance.”

The interplay of elections, weather events, and global trends underscores the need for agility in hotel operations and marketing. As the holiday season kicks in, the focus will shift to capitalizing on pent-up demand and catering to a diverse range of travelers.