Holiday Hotel Slowdown Won’t Dent DFW’s Strong Year For Hospitality
With consumer confidence up, holiday travel is predicted to increase and hit its highest levels since 2005. Will Dallas-Fort Worth hospitality benefit from a bump in occupancy? Probably not, according to CBRE Hotels Director of Consulting Jeff Binford.
“While there is a huge increase in travelers by car and by air, historically [the holidays] are slower times for hotels … any bumps [in occupancy] we do see are from unexpected travelers during holiday periods. Traditionally, November and December are pretty slow periods,” Binford said.
So despite the massive increase in nationwide travel both by car and air around Christmas and Thanksgiving, Binford said many of these travelers will skip the hotel, opting to stay with family or friends for the days they are in town. Additionally, business travel winds down with the holidays, gutting weekday occupancy. DFW is no exception, and historically November and December slump in terms of hotel occupancy.
Overall, DFW has had a strong year in hospitality. Lots of new supply hit the market and, according to Binford, occupancy drops were minimal and the average daily rate is still growing in all nine submarkets around the metro. Binford said there is no reason to expect the market to turn sour in Q4 despite the holidays taking a toll on occupancy. The reason? It is party season.
“On the flip side, for hoteliers, this is also the season that they make up a lot of lost revenues in catering for holiday parties, employee parties, client parties and things like that. Many of these hotels are busy, but it is in their meeting rooms more than in their guest rooms,” Binford said.
All in all, the holidays are nothing to worry about for the DFW hospitality industry.
“At this point, we do not anticipate any dramatic moves, positive or negative, as it relates to the holiday season,” Binford said.