Summer Lodging Trends Spill into Winter For Mountain Destinations
The summer of 2017 set two new all-time records for the six-month summer season—a very healthy seven percent gain in aggregated revenue among 20 participating destinations in eight western states while occupancy eked out a scant 0.1 percent increase over the summer of 2016. The month of October was up 9.7 percent in occupancy with a 14.1 percent gain in revenues compared to October 2016. This is the final summer report for 2017 released by Inntopia in their monthly DestiMetrics Market Briefing. Focus of the monthly Briefing now moves to the winter season and includes aggregated bookings and revenues through Oct. 31.
“Even though summer occupancy was up only slightly, the strength of the consumer marketplace is apparent in strong rate increases that led to another summer revenue record,” said Tom Foley, vice president of Business Intelligence for Inntopia. “This trend of flat occupancy along with increasing daily rates started showing up last winter and persisted throughout the summer and is now evident in the winter data for November through April arrivals,” he pointed out.
As of Oct. 31, aggregated winter occupancy is down 0.1 percent compared to the same time last year with declines appearing in three of the six months—December, January, and March. In contrast, the Average Daily Rate (ADR) is up 4.9 percent and is showing gains in four of the six months. The combination of occupancy plus rate increase is resulting in a moderate revenue growth of 5.4 percent compared to last Oct. 31. December is the only month showing a decline in revenue, due in part to the 3.6 percent decrease in occupancy for that month.
“Despite several western destinations pushing back opening dates because of inconsistent snowfall, economic momentum is positive and the purely destination visitor who comes from afar, books earlier, and stays longer seems undeterred,” explained Foley. “These destination guests are less concerned about snow conditions than local and regional visitors and are booking at a similar pace to last year, even with daily rates continuing to edge up.”
Following a stormy September, economic indicators rebounded in October with the September job creation report being revised from a loss of 33,000 jobs to a gain of 18,000. Along with the 261,000 new jobs created in October, the Unemployment Rate declined from 4.2 to 4.1 percent. However, prospective workers dropping out of the job search was also cited as an explanation for the dip. On Wall Street, the Dow Jones Industrial Average jumped another 4.3 percent in October, setting another all-time record for the Index and finishing a hearty 28.9 percent higher than it was one year ago. These positive figures were reflected in the Consumer Confidence Index (CCI) that rose 4.4 percent to reach its highest benchmark since December 2000 at 125.9 points.
“As we move into the peak booking months for mountain resorts, what remains unclear is whether occupancy is flattening because some properties and regions are nearing capacity or if the increasing rates are dissuading some visitors from booking,” mused Foley. “At this point, we suspect it is a combination of both scenarios although some other unidentified variable may be in play. But, at this point, what is clear is that this pattern has persisted for 10 consecutive months so an immediate upward jump in occupancy isn’t likely without a ‘perfect storm’ of rate declines and significant, marketable snowfall,” cautioned Foley.