Summer Occupancy and Revenues Relatively Unchanged; Remain on Pace for Record Numbers
BI Sales & Account Manager
Although subtle shifts in economic metrics suggest the potential of a slowing in bookings at western mountain destinations in the months ahead, thus far, aggregated data from participating properties show no signs of change from the strong pattern of the past few months, putting lodging on an early record pace again this summer. As of June 30, occupancy for the summer months of May through October is up 2.6 percent compared to the same time last year with increases in four of the six months—only July and September posting modest declines. The Average Daily Rate (ADR) is up in all six summer months for an aggregated increase of 2.6 percent. The higher ADR combined with the bump up in occupancy is delivering a notable 5.3 percent increase in total summer revenues. The latest monthly results were reported yesterday by Stowe-based Inntopia in their monthly DestiMetrics* Market Briefing to participating lodging properties and mountain communities across seven western states.
Strengthening the overall summer figures were specific results for the month of June. Actual occupancy for the month was up a robust 7.9 percent compared to June 2017. Bolstered by a 3.3 percent increase in the ADR, revenues for the month posted an 11.4 percent gain over last June.
“June was a busy month across most of the western region with strong increases in both booking pace for arrivals in June—up 13.2 percent—and increases in daily rates and revenues,” reported Tom Foley, vice president of Business Intelligence for Inntopia. “That said, we are starting to detect some subtle shifts in consumer behavior as the economy is poised to react to the reality of international trade tariffs that are just starting to be felt.”
The Monthly Market Briefing also emphasized the potential of economic indicators and geopolitical news on bookings for the coming months at western destinations. The Dow Jones Industrial Average (DJIA) declined 1.2 percent in June and marked the third decline in 2018. The Briefing pointed out sharp gains in the first two weeks of June, followed by dramatic declines in the second half of the month and suggested the erratic pattern could have a negative influence on investors, employers, and consumers.
Following the May rally, the Consumer Confidence Index (CCI) also dipped 1.9 percent in June for its third decline in four months. However, it remains 7.9 percent higher than June 2017 and while consumers may be feeling more cautious, for mountain destinations there is currently no evidence that the slight slip will cause a significant slowing of current steady booking patterns. An additional 213,000 new jobs were added during June to sustain the strong job creation trend of the past year. However, the Unemployment Rate rose from 3.8 percent to four percent as an estimated 601,000 prospective workers entered the hiring-friendly job market during June.
“Although unemployment remains 40 basis points below where it was one year ago, there are growing concerns that international trade disputes could have a negative impact on job creation and hiring,” cautioned Foley.
A slight cooling in the booking pace was detected during June—possibly sparked by an ongoing drought and high temperatures in much of the West coupled with more than 60 wildfires creating smoky air quality in some mountain resort regions. While bookings made in June for June arrivals was up a robust 13.2 percent compared to June 2017, bookings made during the month declined for arrivals in July through September with August down 5.1 percent and September down a troubling 24.5 percent compared to last year.
“While many things remained relatively stable during June, a couple of ‘wild cards’ still have the potential to change the outcome of the summer season,” Foley conceded. “Indicators through June 30 are pointing to another record-breaking summer in terms of both occupancy and revenues, but concerns are rising rapidly about the impact of international trade wars and their impact on hiring, job creation, consumer prices, financial market stability, and consumer confidence,” he concluded.
*DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks lodging performance in resort destinations. They compile forward-looking reservation data each month and provide individualized and aggregated results to subscribers at participating resorts. Data for western resorts is derived from a sample of approximately 290 property management companies in 20 mountain destination communities, representing approximately 30,000 rooms across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho and may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.