(Updated January 18 to correct the title of the second chart.)
In 2019, as in prior years before the pandemic, average hotel occupancy was higher on weekends than weekdays. This pattern repeated in 2021 but at a much stronger pace. Whereas two years ago the point premium on weekends ranged between three and 12 points, in 2021 the premium increased to between seven and 18 points.
Part of the explanation is that comparable weekday data is much lower than it had been because corporate transient demand and city-wide conventions, which normally meet mid-week, are still severely impacted by the pandemic. On the other hand, leisure demand for hotel rooms has been a bright spot in the recovery as Americans ventured out to be with friends and family. The outcome for 2021 was that midweek occupancy was still depressed while weekend occupancy soared, increasing the occupancy point premium on weekends.
Hoteliers have been able to capitalize on the strong demand by driving rate growth on weekends. The comparable data from the year 2019 indicates that the premium was less than $5 during the summer. During the spring and winter months the pattern was reversed, and weekends had a lower average daily rate than weeknights.
In 2021 weekend room rates were priced at a much higher premium than ever seen before, from $10 to more than $25. The higher premiums likely resulted from hoteliers realizing that the strong room demand was sustainable and that room rate discounts were not needed to induce hotel stays. In addition, the higher availability of vaccines and booster shots likely made some travelers feel safer to stay away from home. International travel restrictions, coupled with unclear or changing vaccine and quarantine requirements, likely deterred travel abroad, keeping more guests and hotel revenue in the U.S.
The expectation in 2022 is that weekend demand will continue to be strong and sustained. This should allow hotel operators to continue to drive room rates that outpace midweek results. It will be interesting to observe if the return of business transient demand will boost midweek rates and erode some of the weekend occupancy premiums observed in 2021.