The Effect of Holidays on Hotel Daily Revenue

Abstract

The holiday effect phenomenon has been studied in industry sectors such as securities, retail, and so on. Literature is devoid of a purposeful study specific to the hospitality industry that evaluates the economic impact of holidays on the hotel industry. The purpose of this study was to examine the impact of holidays on hotel daily revenue. Using daily occupancy data of the U.S. lodging industry between January 2000 and February 2004, the study found a significant holiday effect prevalent in the hotel industry. Findings indicate that individual effects of holidays on hotel daily revenue differ significantly from one to another. In addition, some holidays have differential impacts depending on the day of the week on which they fall. Findings can be used to develop more targeted strategies by the lodging industry as a whole.

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“…In tourism and the lodging industry, in particular, seasonality has been the focus of several studies (Butler 1998 ; Bar-On 1999 ). In fact, the term “holiday,” within this context of seasonality in tourism, has typically assumed a period spanning several days, called “Shoulder Days”, (even weeks or months) compared to the shorter (single day) application in finance and economics (Demicco et al 2006 ).…”