Revenues Keep Revving up at Western Mountain Resorts this Summer
Summer Rates Continue Upward Climb as Occupancy at Western Mountain Resorts Remains Mostly Flat
While aggregated occupancy at mountain resorts is up a scant 0.6 percent for the summer months of May through October based on bookings made through May 31, aggregated revenue for the same time period is up a robust 9.3 percent compared to the same time last year. The lodging figures were released by Inntopia last week in their monthly DestiMetrics* Market Briefing that includes lodging data from mountain destinations in seven western states. The report also revealed that occupancy gains are less stable than in recent years, but growing in four of the six summer months with the most notable increase in October–up 11.1 percent. The aggregated Average Daily Rate (ADR) is very strong, and revenues are up in all six months.
The month of May concluded with occupancy up a modest 1.6 percent compared to last May while revenues for the month jumped up 8.4 percent in a year-over-year comparison.
“Occupancy rates for the summer season at mountain resorts is off to a somewhat slow start compared to the last several summers with aggregated occupancy pretty flat for most of the summer with the exception of October which is currently showing a notable bump in bookings,” explained Ralf Garrison, director of DestiMetrics. “A rate increase is good for lodging properties, but doesn’t help the broader, tourism-dependent economy,” he added.
The Briefing also noted regional differences between the Far West resorts in California, Nevada, and Oregon and the Rocky Mountain destinations located in Colorado, Utah, Wyoming, and Montana. Because of the well-established maturity of the Far West’s summer destinations, aggregated absolute occupancy rates for that region are nearly double those of the still emerging Rocky Mountain destinations. But while the Far West is experiencing sharp declines in the months of September and October, the Rocky Mountain resorts are showing increases for both months in a trend that has been growing for the past three years.
Key economic indicators are also outlined in the report with a caution that some uncertainty remains as the sustainability of the “Trump Bump” and the implementation of proposed legislation and policies remains unpredictable.
The Dow Jones Industrial Average posted a slight 0.33 percent gain and remains at a high and relatively stable level with modest fluctuations of 1.5 percent or less in four of the past five months. The Consumer Confidence Index (CCI) dipped 1.3 percent in May and marks the second consecutive month for a decline although remaining at high levels that pre-date the Sept. 11 attacks in 2001. New jobs in May were below expectations with a moderate 138,000 new jobs, and the Unemployment Rate dropped down to 4.3 percent; due partially to discouraged prospective workers continuing to leave the job market. The Bureau of Labor Statistics also revised March and April new job creation figures downward by 66,000 jobs. Of further concern is the slump in wage gains, which are not keeping pace with inflation or the increasingly tight market.
“The disparity between job growth and anemic wages is starting to show up in the CCI,” explained Tom Foley, director of Business Intelligence for Inntopia. “Employers and financial markets will be tracking the passage, or lack thereof, of proposed legislation to deregulate Wall Street which has been anticipated since Election Day and is a driving force behind the ‘Trump Bump’,” he continued. “Regardless of what legislation passes or doesn’t pass, it will likely have an impact on job creation and consumer spending in the coming months.”
“Despite the somewhat slower start to the summer booking season, we are still seeing room rates continue to increase throughout the summer months and are already seeing some record early summer highs in some destinations,” pointed out Garrison. “With more than half of last summer’s business already either booked or in the bank for this summer, a sixth consecutive revenue record for summer business is likely,” he concluded.