The effects of the longest government shutdown in U.S. history on hotel and air travel performance are largely in the rearview mirror two weeks removed from its resolution, though some softness remains on the weekends.
While the vast majority of Thanksgiving travel is done on the road, the conclusion of the 43-day government shutdown on Nov. 12 was ultimately timely for those planning to travel by air this holiday season.
Colin Sherman, director of hospitality market analytics for Texas and U.S. South at CoStar Group, said November began with a sharp decline in both travel and lodging demand as the Federal Aviation Administration cut back on flights to accommodate for air-traffic controller staffing shortages. In early November, there was a 2.3% year-over-year decrease in Transportation Security Administration air passenger counts, with the largest decreases coming midweek and on weekends.
Hotel performance was similarly down at the beginning of November — on the first Sunday of the month, Nov. 2, occupancy was down 17.5%, average daily rate was down 5.8% and revenue per available room was down 22.2% on a year-over-year basis. The following day continued the trend, with occupancy down 7.4%, ADR down 2.7% and RevPAR down 10% on Nov. 3, Sherman said.
"These drops mirrored the immediate pullback in government and business travel, along with broader consumer uncertainty," he said.
The rest of the week saw some steadying before the weekend of Nov. 7 and 8 rebounded ahead of last year's levels, Sherman said. Occupancy and ADR rose 2% to 4%, and RevPAR was up 6% to 7%.
"This improvement was likely driven by pent-up demand and the resumption of deferred travel as federal operations normalized," he said.
Hotel performance remained mixed in the second week of November, with midweek days maintaining year-over-year gains while weekends lagged last year in occupancy and RevPAR — a sign that leisure travel hadn't recovered from the shutdown disruption, Sherman said.
"Overall, November's travel and hotel performance tells a story of disruption and gradual recovery," he said. "As the shutdown ended and travel resumed, both passenger counts and hotel demand rebounded, especially for midweek and Friday/Saturday stays. Still, the lingering softness on weekends and the uneven pace of recovery highlight how sensitive demand remains to policy-driven shocks and shifts in traveler behavior."
Thanksgiving travel
According to data from AAA, there will be an additional 1.6 million travelers this Thanksgiving compared to last year, a new record.
The same percentage of travelers as last year, 7.4%, will use air travel to get to their destination, a sign of consumer confidence in flights two weeks removed from the government shutdown. AAA warned, however, that its projection of 6.07 million air travelers could come in lower than expected due to flight cancellations. This would likely result in more travelers by car, which is already projected at 73 million people.
“Thanksgiving travel numbers are always impressive because this holiday has become synonymous with heading out of town to spend time with loved ones,” said Stacey Barber, vice president of AAA Travel. “People are willing to brave the crowds and make last-minute adjustments to their plans to make lifelong memories, whether it’s visiting extended family or meeting up with friends.”
Four Florida cities — Orlando, Fort Lauderdale, Miami and Tampa — are in the top five domestic Thanksgiving destinations, according to AAA booking data. Paris, Amsterdam, Vienna, Cancun and Punta Cana round out the top five international destinations.