Eye on Hospitality: Holiday Outlook

Eye on Hospitality: Holiday Outlook https://wahospitality.org/wp-content/uploads/2016/12/shutterstock_532000081.jpg

By Paul Schlienz

The winter holiday season, commencing with Thanksgiving and extending to New Year’s Day weekend, is always an important time for restaurants and hotels, but there are big changes in the works.

Restaurants tend to lose money on Thanksgiving, but for all other winter holidays, spending is on the rise.

Although Thanksgiving is still largely an eat-at-home holiday, an increasing number of people choose to dine out during the winter season’s other holidays. Independent restaurants that remained open on Christmas and New Year’s Day, in 2015, found their profits increased by 40 to 50 percent in comparison to average days, according to data from CAKE, a Sysco-owned technology company that specializes in point of sale and guest management technology for independent restaurants. According to OpenTable, the restaurant reservation service, restaurants served nearly twice as many meals on Christmas Eve and more than three times as many meals on New Year’s Eve, compared to the average day in 2014 and 2014.

Bank of America data indicates that Millennials may be driving this growth. In comparison to 2014, 18- to 34-year-olds spent six percent more at restaurants on Christmas Eve in 2015. This was a larger percent increase than diners in all other age groups although those percentages also increased. Millennials also spent four percent more than the previous year going to restaurants on Christmas and New Year’s Eve.

“The reason why my parents do it that way is so that we can focus on the people, and not the food,” Jon Rybka, a Tennessee resident who dines out with his parents on Christmas, told Eater.

At the same time, Internet searches on “Christmas menus” and “restaurants open on Christmas” have been gradually increasing since 2013, according to Google Trends.

“The restaurants need to take that data and see how they can apply it that is beneficial to themselves,” Mani Kulasooriya, CEO of CAKE, told Eater.

Small, local restaurants should consider staying open during the holidays, according to Kulasooriya. Many smaller restaurants don’t, and they may be losing out big time.

“We see a big, big gap here,” said Kulasooriya. “We want to make them think harder about business.”

In the hospitality industry’s lodging sector, the outlook is also positive.

Advance bookings at Best Western’s more than 2,000 U.S. hotels from Nov. 15-Jan. 15 are up 6.1 percent in comparison to the same period in 2015. The number of nights booked is up by 10.5 percent. This means travelers are planning on longer stays. Advance bookings and the number of nights booked are up by 13 percent.

Feeding this trend may be the fact that many Americans may be tiring of the expenses related to a traditional, home-bound Christmas and seeing that air fares to out-of-town destinations are actually quite reasonable. Indeed, in some cases, flights were as low as $125 to destinations like San Francisco, Las Vegas, New Orleans, Nashville and Chicago. By contrast, Americans are expected to spend $935.58 on holiday shopping in 2016.

No wonder a trip to a distant destination may look good this Christmas. And that is definitely to hoteliers’ benefit.