Understanding the Impact of Federal Holidays on U.S. Hotel Revenue

As we approach the holiday season and reflect on the past year, it's a perfect time to consider how holidays—both this year and in previous ones—have influenced the hotel industry. With that in mind, we conducted a quick analysis of all federal holidays in the U.S. over the past three years, examining their impact on revenue compared to surrounding weeks.

Through this analysis, we identified that holidays generally fall into four categories, each with distinct patterns of behavior. For each holiday, we analyzed not only the holiday itself but also the surrounding dates to assess the full impact. To measure this, we compared revenue production to the four weeks surrounding the holiday, focusing on the same days of the week. Let’s dive into the findings!

Category 1: Major Day-of-Week Floating Holidays

These holidays, such as Thanksgiving and New Year’s Eve, either occur on different calendar dates (e.g., Thanksgiving) or vary in the day of the week each year. Generally, these holidays result in a net negative impact on revenue compared to surrounding days, with New Year’s Eve being a slight exception, showing limited positive effects.

Interestingly, the extent of the negative impact depends significantly on the day of the week the holiday falls on. When a holiday occurs near or on a weekend (Friday through Monday), the negative impact on revenue for the rest of the week diminishes by 10–20%.

Category 2: Winter Monday Holidays

Holidays like Martin Luther King Jr. Day and Presidents Day tend to have a consistent net positive impact. They show significant boosts in revenue during the preceding weekend (Friday through Sunday) without any notable negative effects in the following week. This unique behavior makes them particularly beneficial for the hotel industry during the winter season.

Category 3: Monday Holidays with Major Impacts

While these holidays—such as Memorial Day and Labor Day—also deliver positive impacts during the preceding weekend, they are followed by a significant slowdown in travel during the week after the holiday. This drop in activity often offsets, or even negates, the benefits seen during the holiday period.

Category 4: Holidays with No Notable Impact

Some holidays, including Columbus Day, Veterans Day, and Juneteenth, exhibit no major measurable impact on revenue. Any production deviations during these holidays remain within the standard fluctuations typically observed in weekly revenue patterns.

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Key Takeaways

The impact of holidays on hotel revenue varies by market, but on a national level, several consistent patterns emerge:

• Winter Monday holidays (MLK Jr. Day, Presidents Day) deliver reliable benefits without notable downsides.
• Major holidays (Thanksgiving, New Year’s Eve) tend to have variable impacts, which diminish significantly when they coincide with weekends.
• Non-winter Monday holidays (Memorial Day, Labor Day) show positive pre-holiday effects but experience steep slowdowns in the following week.

By understanding these patterns, hoteliers can better anticipate holiday-driven demand and develop strategies to maximize revenue during these critical periods.