US Hotels Struggle with Midweek Christmas and New Year Holidays, Plummeting Occupancy and Revenue: Here’s What You Need to Know

Published on December 6, 2025

The holiday season this year is proving difficult for hoteliers, especially with the timing of both Christmas and New Year’s Eve landing on the middle of the week. This midweek occurrence is expected to significantly impact hotel bookings across the U.S. According to Isaac Collazo, Senior Director of Analytics at STR, this is among the worst possible scenarios for hotel occupancy.

Collazo emphasized that based on historical data, the placement of these major holidays during the week leads to a weak demand period for hotels. The general trend points towards lower occupancy levels compared to more typical holiday periods when the holidays fall on weekends.

Christmas and New Year’s Eve Scheduling Woes

Both Christmas Eve and New Year’s Eve will fall on Wednesdays this year. This unusual scheduling presents a challenge for hotel operators, as these dates are typically associated with high occupancy rates. Historical trends reveal that Christmas Eve, when it falls on a Wednesday, sees an average hotel occupancy of just 31.5%, the lowest for any day of the week. Conversely, Saturdays, a more traditional weekend holiday, show much higher occupancy, averaging 39.3%.

Although Christmas Day falls on a Thursday this year, which is considered slightly better for hotel bookings, it still does not compare favorably to other days. The occupancy rate for Christmas Day averages 37.2% when it lands on a Thursday, trailing behind the more favorable Saturdays, which see occupancy levels as high as 41.9%.

Overall, the eight-day holiday period, which spans from Christmas Eve to New Year’s Day, is expected to experience its worst hotel occupancy when Christmas Eve falls on a Wednesday. This represents a decrease from previous years, when Christmas Eve landed on a Saturday, and the holiday period showed a 50.7% occupancy rate. This year, it is projected to drop to 47.1%, a notable decline.

Prolonged Challenges in the Hospitality Industry

This poor timing is compounded by the ongoing struggles within the broader hospitality industry, which has seen decreasing demand. With weak trends carrying over from earlier in the year, industry professionals are not optimistic about a dramatic recovery during the fourth quarter. The combination of weak demand and poorly timed holidays is leaving hotels with less hope for a strong performance leading into 2026.

The difficult environment is echoed by Priya Chandnani, Senior Vice President of Sales, Revenue, and Distribution Strategy at Sage Hospitality Group. According to Chandnani, bookings for upscale hotels have been slower than usual during the holiday season. However, luxury and upper-upscale properties are experiencing a steadier pace of reservations.

The Decline in Group Bookings

In addition to the slowdown in individual leisure bookings, there has been a clear decline in group business, particularly from SMERF (Social, Military, Educational, Religious, and Fraternal) groups. This segment traditionally provides a steady stream of bookings for hotels during the holiday season. Chandnani remarked that there has been a marked reduction in SMERF bookings, which could be due to a shorter booking window compared to previous years. As a result, hoteliers are pivoting to a more leisure-driven discount strategy to attract customers.

The trend of shifting demand is not just confined to the upscale segment. Across the broader hotel industry, demand and spending are increasingly concentrated among affluent consumers, with consumers from lower-income brackets contributing less to overall hotel revenue. This widening gap is making it more challenging for lower-end hotels to maintain strong occupancy levels.

Looking Ahead to 2026

Despite the challenging situation this year, there may be some hope for the future. Looking ahead to 2026, the timing of the holidays offers a brighter outlook. Christmas Day 2026 and New Year’s Day 2027 will both fall on Fridays, a situation that has been described as a “perfect storm” by analysts at Truist. The timing of these holidays is expected to create a much more favorable environment for hotel bookings.

For hoteliers, the year 2026 could prove to be an easier year in terms of comparing performance. The placement of the holidays, coupled with easier comparisons to prior years, could provide a welcome boost to occupancy and revenue.

Mixed Optimism for 2026’s First Quarter

Chandnani remains cautiously optimistic about the early months of 2026. She noted that the pace of transient demand is either flat or showing slight improvement compared to the same time last year. Moreover, group business bookings are performing better than expected for the first quarter. Although it is still early in the year, this positive trend suggests that there may be a rebound on the horizon for the hospitality sector.

However, the second and third quarters of 2026 remain a significant concern. Chandnani expressed worries about how these months will shape up, as they are traditionally harder to predict. Nevertheless, she remains hopeful that the fourth quarter of 2026 will offer better conditions, given the improved holiday timing and stronger comparisons with 2025.

Conclusion: Holiday Timing and the Hotel Industry

The current holiday season is proving to be challenging for hoteliers, with midweek holidays leading to low occupancy and weaker-than-expected demand. Despite these struggles, the outlook for 2026 is more promising, thanks to the improved timing of key holidays. For the first quarter of 2026, hoteliers are seeing some signs of recovery, particularly in the luxury and upper-upscale segments, and are cautiously optimistic about future growth.

The hotel industry remains in a tough spot, but with the right adjustments to pricing and marketing strategies, there is hope for a more prosperous 2026. While the immediate future remains uncertain, the long-term prospects seem brighter, particularly with the upcoming holiday calendar providing better opportunities for recovery.

[Source: CoStar]