News
Western mountain resorts clawed back some lost ground during October and the final month of the summer season to end the difficult summer of 2020 on a positive note. Seven western states participate in the data collection and analysis conducted by DestiMetrics*, part of the Business Intelligence division of Inntopia. Results released in the monthly Market Briefing include aggregated lodging results from 18 destinations encompassing more than 30,000 rooms through Oct. 31.
Wrapping up what has been an exceptionally difficult summer, properties had some good news as occupancy for the month of October enjoyed a slight 1.3 percent bump up in a year-over-year comparison to October 2019. But the really bright note for properties was the Average Daily Rate (ADR) rising 20.1 percent compared to last year. The strong rate increases pushed aggregate revenues up a healthy 21.7 percent for the month compared to last October. This is the first month since the pandemic was declared that monthly lodging showed a year-over-year increase in either occupancy or revenue.
However, the full summer season was far more of a struggle as occupancy for the six-month period was down 31.6 percent while ADR for the season was up a solid 7.6 percent. While rate increases helped blunt some of the revenue losses, it fell far short of making up for lack of occupancy and so revenues finished down 26.7 percent compared to last summer.
“We’re continuing to see that consumers are more comfortable with short-lead bookings and that willingness for visitors to book on short notice has allowed lodging properties to fill openings and improve their occupancy figures,” explained Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “And despite the widespread and undeniable challenges faced by the lodging industry this year, it was heartening to see that during October, mountain properties reported their largest year-over-year revenue gain since May of 2016.”
All Eyes on Winter
The booking pace during October for arrivals in the months from October through March reflect the continued cautiousness of mountain visitors to make long-lead travel plans. In a year-over-year comparison to last October’s booking pace, bookings are down 12.2 percent for the six-month period. The pace was more impressive for the short-lead arrivals with October bookings for arrival in the same month up 36.6 percent while for November arrivals they were up 10.1 percent. The remaining four months are trailing from where they were last year at this time.
As it stands, aggregated occupancy on-the-books for arrivals in November are down a slight 1.6 percent year-over-year while ADR is up a strong 24.9 percent, giving the first month of the winter season a strong boost, with revenue up 22.9 percent. But the winter strength ends there, with occupancy on-the-books for arrivals in November through April down a sharp 33.1 percent with decreases in all six months. ADR is considerably more stable and is down only a moderate 1.9 percent compared to this time last year with increases in four the six months. Revenues are currently down a steep 33.5 percent compared to last year due to the much lower occupancy figures as of Oct. 31.
“At the moment, the view to November is optimistic as snow is falling, resorts are opening and Thanksgiving is currently performing more like a typical year than a pandemic year,” continued Foley. “However, beginning in December we are seeing a gradual downshift in occupancy and room rate that steepens as we move into January and beyond. With the alarming rise in COVD-19 cases throughout most of the US and updated health guidelines for the holidays ahead, reliable predictions about bookings beyond the next 90 days is difficult at best,” he added.
Economic measurements
A review of key economic indicators at the end of October showed mixed results. The Dow Jones Industrial Average (DJIA) dropped a steep 4.6 percent during October on the heels of the 2.3 percent decline in September. That leaves the DJIA two percent lower than it was at the same time last year. Also slipping back, the Consumer Confidence Index (CCI) declined 0.4 percent after a strong showing in September. This is the third time in the past four months that the CCI has dipped down, but at 101.3 points, it remains above the psychologically significant 100-point threshold.
On an upbeat note, the national Unemployment Rate dropped from 7.9 percent to 6.9 percent in October, boosted by the unexpectedly higher influx of new jobs during the month—638,000. Unemployment is currently well below the recent 14.7 unemployment that was posted last April. to bring it to its lowest levels since March when it was 4.4 percent.
“Despite the strong jobs report, there are several variables putting negative pressure on the economy,” Foley explained. “A significant increase in October from 2.4 to 3.6 million individuals that have been unemployed for 26 weeks puts a strain on financial support systems like unemployment insurance. Of additional concern is that new unemployment claims remain high with 751,000 new claims last week and indicating that the rapid spread of COVID-19 continues to prevent a full-fledged economic recovery.”
Foley also included an additional economic caveat this month about the activity of the stock market in the previous week. He noted that “the dramatic increase in the DJIA and other international stock markets was driven by the announcement of promising COVID-19 vaccines and has little to do with underlying economic conditions.”
Foley summarized the monthly Briefing by noting, “until something resembling a more confident traveler returns to mountain resorts lured by abundant snowfall, meaningful progress in the fight against COVID-19, a stabilized political climate, and a recovering economy, we’re going to need a healthy dose of good luck and good faith efforts to tackle this season’s challenges,” Foley concluded.
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*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 18 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.
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