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Gym visits flourished at the start of 2024, as consumers made their yearly New Years resolutions and flocked to fitness clubs nationwide. But how did category leaders fare in Q2 2024? We dove into the data to find out – zooming in on Planet Fitness, a major player in the fitness space.
Throughout H1 2024, Planet Fitness experienced consistent YoY visit growth, finishing out Q2 2024 with a quarterly increase of 6.3% compared to the equivalent period of 2023. And though some of this visit growth is due to Planet Fitness’ ongoing expansion, the average number of visits to each of the chain’s gyms also increased YoY during most of the analyzed period.
Indeed, only in March and May 2024 did the average number of visits to each Planet Fitness location decline YoY. And a look at the weekly breakdown of visits to Planet Fitness shows that these declines may be due, in part, to calendar shifts.
Location analytics reveal that though some people like to hit the gym on weekends, many customers prefer to get their exercise in on regular work days, especially at the start of the week: Throughout H1 2024, Planet Fitness drew the most visits on Mondays (17.4% of weekly visits), Tuesdays (17.7%), and Wednesdays (17.2%), with attendance dropping steadily as the week wore on. And both March and May 2024 – the two months that saw visits per location decline YoY – contained fewer non-holiday Mondays, Tuesdays, or Wednesdays than the equivalent periods of 2023.
Planet Fitness’ continued visit success appears to be driven, in part, by its growing share of frequent visitors. Gym visitation is highly seasonal – with visits slumping during the holidays and then spiking in January, as people vow to double down on exercise routines.
A look at changes in the share of Planet Fitness visitors hitting the gym at least four times per month (roughly, once a week) reveals a similar pattern. The share of frequent visitors is at its highest in January, remains elevated through April or May, and declines as the year draws to a close. (January 2022 deviated from this pattern, likely due to the Omicron resurgence.)
Despite these seasonal fluctuations, the share of visitors making weekly stops at Planet Fitness has been on an overall upward trajectory – going higher each year between 2021 and 2023. And though this rise leveled off in 2024 amidst a stabilizing fitness market, frequent visitor rates remained high in 2024, with some months seeing continued YoY increases. This elevated loyalty is good news for Planet Fitness – since more engaged customers are more likely to renew or even upgrade their memberships.
With value still top of mind for many consumers, Planet Fitness’ famously low prices have positioned the chain for success. Will this positive momentum continue as consumers adjust to the chain’s first basic membership price increase in 26 years?
Follow Placer.ai’s data-driven analyses to find out.
*This report excludes locations within Washington state due to local legislation.
Now that we’ve cleared the halfway point for 2024 with retailers preparing for back-to-school shopping (and Q2 2024 reporting season), we thought we’d take stock of where we stand from a retail category perspective. Last year, we looked at visit per location data by retail category at the halfway point for the year, which proved to be a useful indicator for what to expect for the rest of the year. We thought we’d revisit the analysis to give some perspective of what to expect in the months to come.
Needless to say, it’s been another volatile year for most retailers, with a tepid start to the year due to weather, followed by solid event/holiday spending in February/March, and a lackluster April (though partly the result of the Easter holiday calendar shift). May, June, and July visitation data offered some encouraging signs, with year-over-year visits increasing to a mid-single-digit level (according to Placer's Industry Trends report). Importantly, increased visits won’t necessarily translate into the same level of sales increases, as visits are continuously being driven by deals/lower price points for many categories.
Based on the positive trendline for retail in general, it shouldn’t be a surprise that the majority of the 25 retail categories we’ve presented show positive growth from a visit per location year-over-year perspective (below).
A few notable takeaways from the visit per location analysis:
Last year, our midpoint visit per location trends gave us some ideas as to how the second half of the year might shake out. Based on our first half 2024 visitation data, we expect (1) consumers to continue prioritize value in the second half of the year, especially those chains that have been able to create excitement/newness for their value assortment; (2) consumers will continue to prioritize holidays/events, which bodes well for back-to-school, Halloween, Thanksgiving, and Christmas; (3) we will continue to see better balance between experiences and goods this year (as we've discussed in the past).
Retailer summer deals are in full swing, with promotional events like Amazon Prime Day and Nordstrom Anniversary Sale, Target Circle Week, and Macy’s All Star Week taking place over the past two weeks. The summer has come to signify the first large scale, cross-industry retailer push to engage with consumers and also test new promotional strategies with shoppers.
Target’s reinvigoration of its loyalty program, Target Circle, launched in April as a streamlined program with more perceived value for members and created a new paid tier called Target Circle 360. Target Circle Week, which took place between July 7-13, focused more on loyalty program members than previous iterations of the event to drive visits by loyal shoppers. The retailer promoted items across discretionary and essential categories, an effort meant to offset the challenges in the discretionary side of the business this year. Mass merchants have been especially challenged compared to warehouse clubs in the superstore category, and Circle Week, especially as the first event of the retailer's summer deals, is a barometer of what’s to come.
According to our foot traffic measurements, Target Circle Week was successful in driving incremental traffic growth, resulting in the highest percentage of growth in visits so far in 2024 on a year-over-five-year basis.
Circle Week also saw a slightly higher dwell time, with visitors spending an average of 29 minutes in store, about a minute higher than 2024 year to date. The week performed well in visits exceeding 45 minutes compared to the year-to-date percentage of visits, which could signal that shoppers coming in for deals spend longer browsing and purchasing. There was also a higher percentage of weekday visits during Circle Week compared to 2024 overall, a promising sign for the week-long event.
Looking specifically at individual store locations that over performed during Circle Week, one that stood out is Target’s original large format store location in Katy, TX. This location opened in fall 2022 to much fanfare; it features a larger curbside pick-up area, multiple shop-in-shop concepts, and a larger grocery footprint. Traffic to the Katy location also increased the most in the week of July 8-14, but it far exceeded the total traffic growth to Target, with visits up almost 55% compared to the same week in 2023, when Target’s event ran last year. Circle Week also kept visitors in store longer at the Katy location, with dwell times increasing by 2 minutes on average compared to 2024 year-to-date.
With the success of this event in bringing in visitors, it will be interesting to see how Target tries to maintain the momentum through the back half of the year. With the announcement of price cuts and a renewed focus on providing as much value as possible to consumers, the enhanced Target Circle program appears to be bolstering those initiatives. As we get further away from the other retailer deal day events as well, we will be able to fully examine the effectiveness of this year’s summer promotional period and also provide more observations as we approach the holiday season.
Using Placer's Return to Office report, we see that Miami continues to be the champion when it comes to returning to office. With a whopping 88% recovery rate, it is heads above the other cities, with NYC coming in at 73% for the month of June. Rounding out the top 5 recoveries are Southern cities like Atlanta (66%), Charlotte (64%), and Forth Worth (64%). These cities are all above the nationwide average for return-to-office, which is 63%.
By contrast, two of the major West Coast cities--San Francisco and Los Angeles lag below the nationwide return rate at 45% and 55%, respectively.
Other major cities in the Midwest, like Chicago and Detroit, are seeing similar rates of lagging return-to-office. In Chicago, 55% have returned compared to Jan 2020 and in Detroit, only 42%.
Moving over to the East Coast, Philadelphia and Washington DC--both at 57% RTO--are also below the nationwide average.
The good news for offices is that taken as a whole, we are seeing upward trends in employees returning to office, albeit perhaps slower than those in commercial real estate or the C-suite would like.
It’s often a good sign when Placer data reflects positive year-over-year growth and in the case of Bass Pro Shops, that’s exactly what we’re seeing for the months of June 2023-June 2024 (note April is down, but that is partially due to last year’s April having five weekends instead of four).
Bass Pro Shops skipped a slight beat immediately after COVID in spring 2020, but by early summer had already regained its store traffic as everyone took to the great outdoors in their quest for social distancing. Ever since, it’s been business as usual with similar peaks around Black Friday weekend and the week before Christmas.
Bass Pro Shop’s footprint is particularly strong in the eastern half of the US. They acquired Cabela’s a few years back and maintained the separate brands. This acquisition gave them an additional presence in the Pacific Northwest and Mountain states.
Both brands over index for the segments Blue Collar Suburbs, Upper Suburban Diverse Families, Suburban Boomers, and Wealthy Suburban Families per Spatial.ai’s PersonaLive. Small Town and Rural High Income also over index at Cabela’s.
RBI and Yum! Brands hold some of America’s favorite restaurants in their portfolios. How are these parent companies and their leading chains faring at the year’s midway point? We dove into the data to find out.
RBI shined in Q2 2024 – seeing a 1.7% increase in visits and a 2.2% increase in visits per location, YoY – due partly to expanding footprints across several of its brands.
Firehouse, Popeyes, and Tim Hortons’ growth likely played a part in overall visit gains to each chain during the quarter. And though Popeyes and Tim Hortons saw minor visit-per-location gaps emerge as the chains added new locations, the fact that this metric remained nearly on par with last year’s levels shows that the chains’ expansions are not diluting existing demand. Both Popeyes and Tim Hortons are likely to see YoY visits per location pick up as each of their new restaurants gains momentum.
Accounting for 69.3% of visits to RBI in Q2 2024, Burger King’s positive foot traffic during the period had a significant impact on its parent company’s success.
RBI management cited equipment upgrades, remodels and advertising as recent drivers of visit growth for Burger King – which despite the shuttering of dozens of underperforming restaurants over the past year, saw a 1.5% chain-wide YoY visit increase in Q2 2024.
And analyzing visit-per-location trends at Burger King shows that the chain’s rightsizing strategy is paying dividends: Since Q2 2023, YoY visits per location have been on a steady incline, closing out Q2 2024 with a 4.3% increase. This indicates that as individual Burger King locations have shut their doors, the remaining restaurants have gotten even busier.
Taco Bell, which accounted for 70.5% of visits to Yum! Brands' restaurants in Q2 2024, drove visits to Yum! in much the same way that Burger King gave a boost to RBI. During the quarter, visits to Taco Bell increased 5.0% YoY while visits per location rose 3.5%. And the taco chain propelled foot traffic growth for Yum! Brands as a whole – with YoY visits and visits per location up a respective 3.1% and 3.5% in Q2 2024.
Taco Bell is the leader in Yum! Brands’ portfolio for good reason. The chain is well-known as one of the world’s most innovative companies. And the taco leader appears to have done it again with “Taco Tuesday” specials. On the Tuesdays of March 26th, April 9th, and April 16th, 2024 the chain offered select menu-favorites for $1 for one hour. This promotion led into a separate $5 Dollar Taco Discovery Box deal, which was available on “Taco Tuesdays” between April 23rd and June 4th, 2024.
The data suggests that both of these promotions drove substantial foot traffic. Beginning on March 26th, Tuesday visits to Taco Bell rose significantly compared to the H1 2024 Tuesday average. And even after the promotions ended, “Taco Tuesdays” retained their draw – perhaps aided by the subsequent launch of a summer menu and the company’s formal entrance into the value meal wars with its much-vaunted Luxe Craving’s Box.
Led by their flagship restaurants, RBI and Yum! Brands appear to be on the right track. The strategic expansion of certain chains and the rightsizing of others has paid off in visit growth for RBI, while Yum! continues to strike it big with Taco Bell’s winning promotions.
For more dining updates, visit Placer.ai.
Walmart, Target, and Costco are three of the most popular retailers in the country, drawing millions of shoppers through their doors each day. Each of these retail giants boasts distinct strengths and strategies that cater to their unique customer bases, allowing them to thrive in a highly competitive market.
This white paper takes a closer look at some of the factors that are helping the three chains flourish. How does Walmart’s positioning as a family-friendly retailer help it drive visits in its more competitive markets? How can Target leverage its reach to drive more loyal visits? And what does the increase in young shoppers frequenting membership warehouse clubs mean for Costco?
We dove into the location analytics to explore these questions further.
Examining monthly visitation patterns for the three retail giants shows Costco’s wholesale club model leading the way with consistent year-over-year (YoY) visit growth – ranging from 6.1% in stormy January 2024 to 13.3% in June. Family favorite Walmart followed closely behind, seeing YoY foot traffic growth during all but two months, when visits briefly trailed slightly behind 2023 levels before rebounding.
Target, meanwhile, had a slower start to the year, with visits trending below 2023 levels for most of January to April. Over this same period (the three months ending May 2024), Target reported a 3.7% decline in YoY comparable sales. But since then, things have begun to turn around for the chain, with YoY visits rising in May (2.5%), June (8.9%), and July (4.7%). This renewed visit growth into the second half of the year bodes well for the superstore – and the ongoing back-to-school season may well push visits up further as the summer winds down.
For all three chains, Q2 2024’s visit success has likely been bolstered in part by summer deals and intensifying price wars – as the retailers slash prices to woo inflation-weary consumers back to the store.
Over the past few years, consumer behaviors have been changing rapidly in response to shifting economic conditions. This next section explores some of these changes at Walmart, Target, and Costco, to better understand what may be driving these shifts.
One way that consumers have traditionally responded to inflation and other headwinds has been through the adoption of mission-driven shopping – making fewer, but longer, trips to retailers, so that every visit counts. Superstores and wholesale clubs, which offer one-stop shopping experiences, have long been prime destinations for these extended shopping trips. And even during periods when visits have lagged, these retailers have often benefited from extended dwell times – leading to bigger basket sizes.
A look at changes in average dwell times at Walmart and Target suggests that as YoY visits have picked up, dwell times have come down – perhaps reflecting a normalization of consumers’ shopping patterns. With inflation stabilizing and gas prices lower than they were in 2022 and 2023, customers may feel less pressure to consolidate shopping trips than they have in recent years.
In contrast, Costco’s comparatively long dwell times have remained stable over the past several years. The warehouse club’s bulk offerings, plentiful free samples, and inexpensive food court encourage shoppers to spend more time browsing the aisles than they would at other retailers. And even if mission-driven shopping continues to subside, Costco customers will likely keep on making extra-long shopping trips.
While inflation is cooling faster than expected, prices remain high, and new players are stepping into the retail space occupied by Walmart, Target, and Costco – especially dollar stores. Though higher-income customers increasingly rely on the three retail giants for many of their purchases, customers of more modest means are often drawn to the rock-bottom prices offered at dollar stores.
And analyzing the cross-shopping patterns of visitors to Walmart, Target, and Costco shows that growing shares of visitors to the three behemoths also visit Dollar Tree on a regular basis. In Q2 2019, the share of visitors to Walmart, Target, and Costco who frequented Dollar Tree at least three times ranged between 9.8% and 13.7%. But by Q2 2024, that share rose to 16.7%-21.6%.
Dollar Tree is leaning into this increased interest among superstore shoppers. Over the past year, Dollar Tree added some 350 Dollar Tree locations, even as it shuttered nearly 400 Family Dollar stores. And the chain recently acquired the leases of some 170 99 Cents Only Stores – offering Dollar Tree access to a customer base accustomed to buying everything from groceries to household goods. As Dollar Tree continues to grow its footprint and expand its food offerings, the chain will be better positioned than ever to provide a real challenge to Walmart, Target, and Costco.
Still, the three retail giants each have unique offerings that distinguish them from dollar stores. This next section examines what sets Walmart, Target, and Costco apart – and how they can continue to strengthen their competitive edge.
With competition on the rise, Walmart, Target, and Costco must display agility in navigating an ever-evolving market landscape. This section dives into the data for each chain’s more successful metro areas to see what factors are helping them outperform nationwide averages – and what metrics the retailers can harness to try to replicate these results nationwide.
Target recently expanded its Target Circle Rewards program, rolling out three new tiers for its 100 million members. And this focus on loyalty has proven successful for the chain. Demographic and visitation data reveal a strong correlation between the median household incomes (HHIs) of Target locations’ captured markets across CBSAs (core-based statistical areas), and their share of loyal visitors in Q2 2024: CBSAs where Target locations’ captured markets had higher median HHIs also tended to draw more repeat monthly visitors.
Target’s captured markets in the Los Angeles-Long Beach-Anaheim, LA CBSA, for example, featured a median HHI of $89.8K in Q2 2024 – and 48.0% of the chain’s LA visitors frequented a Target at least twice a month during the quarter. Target stores in the Chicago-Naperville-Elgin, IL-IN-WI CBSA, where the chain’s captured markets had a median HHI of $88.7K in Q2 2024, also had a loyalty rate of 48.0%.
Target generally attracts a more affluent audience than Walmart. And even as the superstore slashes prices to attract more price-conscious consumers, the retailer is also taking steps likely to enhance its popularity among higher-income households. In April 2024, Target debuted a paid membership tier within its loyalty program offering perks like same-day delivery for a fee. Maintaining and expanding these premium offerings will be key for Target as it seeks to attract more affluent customers and replicate its high-performing results in CBSAs nationwide.
The persistent inflation of the past few years, while challenging for some retailers, has also created new opportunities – particularly for wholesalers. Membership warehouse clubs, including Costco, are gaining popularity among younger shoppers, a cohort often looking for new ways to stretch their more limited budgets. An October 2023 survey revealed that nearly 15% of respondents aged 18 to 24 and 17% of those aged 25 to 30 shop at Costco.
A closer look at some of Costco’s best-performing CBSAs for YoY visit-per-location growth highlights the significance of these younger shoppers: In H1 2024, the company’s YoY visit-per-location growth was strongest in areas with higher-than-average shares of young urban singles.
For example, the San Diego-Chula Vista-Carlsbad, CA CBSA experienced visit-per-location growth of 10.4% YoY in H1 2024, while the nationwide average stood at 7.9%. And the CBSA’s share of Young Urban Singles, defined by the Spatial.ai: PersonaLive dataset as “singles starting their careers in trade and service jobs,” was 12.1%, well above Costco’s nationwide average of 7.3%.
Walmart is a one-stop shop for everything from affordable groceries to clothing to home furnishings, making it especially popular among families. The retailer actively courts this segment with baby offerings designed to meet the needs of both kids and parents, virtual offerings in the metaverse, and collectible toys.
And visitation data reveals a connection between the extent of different Walmart locations’ YoY visit growth and the share of households with children in their captured markets.
In H1 2024, nationwide visits to Walmart increased by 4.1% YoY, while the share of households with children in the chain’s overall captured market hovered just under the nationwide baseline. But in some CBSAs where Walmart outpaced this nationwide growth, the retail giant also proved especially adept at attracting parental households – outpacing relevant statewide baselines.
In Boston-Cambridge-Newton, MA, for example, Walmart experienced 5.0% YoY visit growth in H1 2024 – while the share of households with children in the chain’s local captured market stood 7% above the Massachusetts state average. And in Grand Rapids-Kentwood, MI, where Walmart’s share of parental households outpaced the Minnesota state average by an even wider 15% margin, the retailer saw impressive 7.3% YoY visit growth. This pattern repeated itself in other metro areas, suggesting that there may be a correlation between local Walmart locations’ visit growth and their relative ability to draw households with children.
Walmart can continue solidifying its market position by leaning into its family-oriented offerings and expanding its footprint in regions with growing populations of young families.
Walmart, Target, and Costco all experienced YoY visit growth in the final months of H1 2024, with Costco leading the way. And though the three chains still face considerable challenges, each one brings unique strengths to the table. By continuously innovating and responding to changing market conditions, Walmart, Target, and Costco can not only overcome obstacles but also leverage them to reinforce their market positions and drive continued growth.
The first Lollapalooza – a four-day music festival – took place in 1991. Chicago’s Grant Park became the event’s permanent home (at least in the United States) in 2005, drawing thousands of revelers and music fans to the park each year.
This year, the festival once again demonstrated its powerful impact on the city. On August 1st, 2024, visits to Grant Park surged by 1,313.2% relative to the YTD daily average, as crowds converged on the park to see Chappell Roan’s much-anticipated performance. And during the first three days of the event, the event drew significantly more foot traffic than in 2023 – with visits up 18.9% to 35.9% compared to the first three days of last year’s festival (August 3rd to 5th, 2023).
Lollapalooza led to a dramatic spike in visits to Grant Park – and it also attracted a different type of visitor compared to the rest of the year.
Analyzing Grant Park’s captured market with Spatial.ai’s PersonaLive dataset reveals that Lollapalooza attendees are more likely to belong to the “Young Professionals” and “Ultra Wealthy Families” segment groups than the typical Grant Park visitor.
By contrast, the “Near-Urban Diverse Families” segment group, comprising middle-class diverse families living in or near cities, made up only 6.5% of visitors during the festival, compared to 12.0% during the rest of the year.
Additionally, visitors during Lollapalooza came from areas with higher HHIs than both the nationwide baseline of $76.1K and the average for park visitors throughout the year. Understanding the demographic profile of visitors to the park during Lollapalooza can help planners and city officials tailor future events to these segment groups – or look for ways to make the festival accessible to a wider range of music lovers.
Lollapalooza’s impact on Chicago extended beyond the boundaries of Grant Park, with nearby hotels seeing remarkable surges in foot traffic. The Congress Plaza Hotel on South Michigan Avenue witnessed a staggering 249.1% rise in visits during the week of July 29, 2024, compared to the YTD visit average. And Travelodge on East Harrison Street saw an impressive 181.8% increase. These spikes reflect the festival’s draw not just for locals but for out-of-town visitors who fill hotels across the city.
The North Michigan Avenue retail corridor also enjoyed a significant increase in foot traffic during the festival, with visits on Thursday, August 1st 56.0% higher than the YTD Thursday visit average. On Friday, August 2nd, visits to the corridor were 55.7% higher than the Friday visit average. These numbers highlight Lollapalooza’s role in driving economic activity across Chicago, as festival-goers venture beyond the park to explore the city’s vibrant retail and hospitality offerings.
City parks often serve as community hubs, and Flushing Meadows Corona Park in Queens, NY, has been a major gathering point for New Yorkers. The park hosted one of New York’s most beloved summer concerts – Governors Ball – which moved from Governors Island to Flushing Meadows in 2023.
During the festival (June 9th -11th, 2024), musicians like Post Malone and The Killers drew massive crowds to the park, with visits soaring to the highest levels seen all year. On June 9th, the opening day of the festival, foot traffic in the park was up 214.8% compared to the YTD daily average, and at its height, on June 8th, the festival drew 392.7% more visits than the YTD average.
The park also hosted other big events this summer – a July 21st set by DMC helped boost visits to 185.1% above the YTD average. And the Hong Kong Dragon Boat Festival on August 3rd and 4th led to major visit boosts of 221.4% and 51.6%, respectively.
These events not only draw large crowds, but also highlight the park’s role as a space where cultural and civic life can find expression, flourish, and contribute to the health of local communities.
Analyzing changes in Flushing Meadows Corona Park’s trade area size offers insight into how far people are willing to travel for these events. During Governors Ball, for example, the park’s trade area ballooned to 254.5 square miles, showing the festival's wide appeal. On July 20th, by contrast, when the park hosted several local bands and DJs, the trade area was a much more modest 57.0 square miles.
Summer events drive community engagement, economic activity, and civic pride. Cities that invest in their parks and event hubs, fostering lively and inclusive spaces, can create lasting value for both residents and visitors, enriching the cultural and social life of urban areas.
For more data-driven civic stories, visit Placer.ai.
The pandemic and economic headwinds that marked the past few years presented the multi-billion dollar hotel industry with significant challenges. But five years later, the industry is rallying – and some hotel segments are showing significant growth.
This white paper delves into location analytics across six major hotel categories – Luxury Hotels, Upper Upscale Hotels, Upscale Hotels, Upper Midscale Hotels, Midscale Hotels, and Economy Hotels – to explore the current state of the American hospitality market. The report examines changes in guest behavior, personas, and characteristics and looks at factors driving current visitation trends.
Overall, visits to hotels were 4.3% lower in Q2 2024 than in Q2 2019 (pre-pandemic). But this metric only tells part of the story. A deeper dive into the data shows that each hotel tier has been on a more nuanced recovery trajectory.
Economy chains – those offering the most basic accommodations at the lowest prices – saw visits down 24.6% in Q2 2024 compared to pre-pandemic – likely due in part to hotel closures that have plagued the tier in recent years. Though these chains were initially less impacted by the pandemic, they were dealt a significant blow by inflation – and have seen visits decline over the past three years. As hotels that cater to the most price-sensitive guests, these chains are particularly vulnerable to rising costs, and the first to suffer when consumer confidence takes a hit.
Luxury Hotels, on the other hand, have seen accelerated visit growth over the past year – and have succeeded in closing their pre-pandemic visit gap. Upscale chains, too, saw Q2 2024 visits on par with Q2 2019 levels. As tiers that serve wealthier guests with more disposable income, Luxury and Upscale Hotels are continuing to thrive in the face of headwinds.
But it is the Upper Midscale level – a tier that includes brands like Trademark Collection by Wyndham, Fairfield by Marriott, Holiday Inn Express by IHG Hotels & Resorts, and Hampton by Hilton – that has experienced the most robust visit growth compared to pre-pandemic. In Q2 2024, Upper Midscale Hotels drew 3.5% more visits than in Q2 2019. And during last year’s peak season (Q3 2023), Upper Midscale hotels saw the biggest visit boost of any analyzed tier.
As mid-range hotels that still offer a broad range of amenities, Upper Midscale chains strike a balance between indulgence and affordability. And perhaps unsurprisingly, hotel operators have been investing in this tier: In Q4 2023, Upper Midscale Hotels had the highest project count of any tier in the U.S. hotel construction and renovation pipeline.
The shift in favor of Upper Midscale Hotels and away from Economy chains is also evident when analyzing changes in relative visit share among the six hotel categories.
Upper Midscale hotels have always been major players: In H1 2019 they drew 28.7% of overall hotel visits – the most of any tier. But by H1 2024, their share of visits increased to 31.2%. Upscale Hotels – the second-largest tier – also saw their visit share increase, from 24.8% to 26.1%.
Meanwhile, Economy, Midscale, and Upper Upscale Hotels saw drops in visit share – with Economy chains, unsurprisingly, seeing the biggest decline. Luxury Hotels, for their parts, held firmly onto their piece of the pie, drawing 2.8% of visits in H1 2024.
Who are the visitors fueling the Upper Midscale visit revival? This next section explores shifts in visitor demographics to four Upper Midscale chains that are outperforming pre-pandemic visit levels: Trademark Collection by Wyndham, Holiday Inn Express by IHG Hotels & Resorts, Fairfield by Marriott, and Hampton by Hilton.
Analyzing the captured markets* of the four chains with demographics from STI: Popstats (2023) shows variance in the relative affluence of their visitor bases.
Fairfield by Marriott drew visitors from areas with a median household income (HHI) of $84.0K in H1 2024, well above the nationwide average of $76.1K. Hampton by Hilton and Trademark Collection by Wyndham, for their parts, drew guests from areas with respective HHIs of $79.6K and $78.5K – just above the nationwide average. Meanwhile, Holiday Inn Express by IHG Hotels & Resorts drew visitors from areas below the nationwide average.
But all four brands saw increases in the median HHIs of their captured markets over the past five years. This provides a further indication that it is wealthier consumers – those who have had to cut back less in the face of inflation – who are driving hotel recovery in 2024.
(*A chain’s captured market is obtained by weighting each Census Block Group (CBG) in its trade area according to the CBG’s share of visits to the chain – and so reflects the population that actually visits the chain in practice.)
Much of the Upper Midscale visit growth is being driven by chain expansion. But in some areas of the country, the average number of visits to individual hotel locations is also on the rise – highlighting especially robust growth potential.
Analyzing visits to existing Upper Midscale chains in four metropolitan areas with booming tourism industries – Salt Lake City, UT, Palm Bay, FL, San Diego, CA, and Richmond, VA – shows that these markets feature robust untapped demand.
Utah, for example, has emerged as a tourist hotspot in recent years – with millions of visitors flocking each year to local destinations like Salt Lake City to see the sights and take in the great outdoors. And Upper Midscale hotels in the region are reaping the benefits. In H1 2024, the overall number of visits to Upper Midscale chains in Salt Lake City was 69.4% higher than in H1 2019. Though some of this increase can be attributed to local chain expansion, the average number of visits to each individual Upper Midscale location in the area also rose by 12.5% over the same period.
Palm Bay, FL (the Space Coast) – another tourist favorite – is experiencing a similar trend. Between H1 2019 and H1 2024, overall visits to local Upper Midscale hotel chains grew by 36.4% – while the average number of visits per location increased a substantial 16.9%. Given this strong demand, it may come as no surprise that the area is undergoing a hotel construction boom. Upper Midscale hotels in other areas with flourishing tourism sectors, like San Diego, CA and Richmond, VA, are seeing similar trends, with increases in both overall visits and and in the average number of visits per location.
Though Economy chains have underperformed versus other categories in recent years, the tier does feature some bright spots. Some extended-stay brands in the Economy tier – hotels with perks and amenities that cater to the needs of longer-stay travelers – are succeeding despite category headwinds.
Choice Hotels’ portfolio, for example, includes WoodSpring Suites, an Economy chain offering affordable extended-stay accommodations in 35 states. In H1 2024, the chain drew 7.7% more visits than in the first half of 2019 – even as the wider Economy sector continued to languish. InTown Suites, another Economy extended stay chain, saw visits increase by 8.9% over the same period.
And location intelligence shows that the success of these two chains is likely being driven, in part, by their growing appeal to young, well-educated professionals. In H1 2019, households belonging to Spatial.ai: PersonaLive’s “Young Professionals” segment made up 9.6% of WoodSpring Suites’ captured market. But by H1 2024, the share of this group jumped dramatically to 13.3%. At the same time, InTown Suites saw its share of Young Professionals increase from 12.0% to 13.4%.
Whether due to an affinity for prolonged “workcations” (so-called “bleisure” excursions) or an embrace of super-commuting, younger guests have emerged as key drivers of growth for the extended stay segment. And by offering low–cost accommodations that meet the needs of these travelers, Economy chains can continue to grow their share of the pie.
The hospitality industry recovery continues – led by Upper Midscale Hotels, which offer elevated experiences that don’t break the bank. But today’s market has room for other tiers as well. By keeping abreast of local visitation patterns and changing consumer profiles, hotels across chain scales can personalize the visitor experience and drive customer satisfaction.
