Trends Big Summer Finish For Lodging in the Southeast Region; Winter Continuing the Pace

Once again, participating resort properties in Florida, Georgia, and South Carolina will be celebrating a second consecutive summer with all-time seasonal records for occupancy, room rate, and revenues. The summer season wraps up on Aug. 31 but data collected and compiled through July 31 by DestiMetrics,* a division of Vermont-based Inntopia in their monthly Market Briefing, virtually guarantees the new records. Destination travel continues to be a top priority for pandemic-weary consumers and with apparently ample savings and a willingness to spend for long-deferred vacations, lodging properties have been cashing in despite continued challenges with hiring adequate labor to meet the high demand.

Because of the sweeping impacts that the pandemic had on travel for the past 17 months, DestiMetrics analyzes the data to draw comparisons to both last year at this time and two years ago at this same time.

July results

As of July 31, actual occupancy was up 20.2 percent compared to July 2020 with the Average Daily Rate (ADR) up 9.4 percent to result in a robust 31.5 percent increase in aggregated revenue for the month. When compared to the pre-pandemic month of July 2019, actual occupancy is up 15.6 percent,  ADR is up 19.2 percent to deliver an even stronger 37.7 percent increase in revenue compared to two years ago at this time.

Summer beach lodging is a big winner

When looking at the full summer season including actual stays and those on-the-books for the final month of the season, the one- and two-year comparisons are just as healthy as for the single month of July. As of July 31, occupancy is up a strong 63.5 percent compared to last year at this time and up a solid 15.3 percent compared to the summer of 2019.  All six summer months from March through August are recording healthy gains.

The financial picture is even more impressive considering the numerous pandemic related upheavals and adjustments. The ADR continues to show strength and consistency and is up 9.2 percent in a year-over-year comparison to last summer at this time. When coupled with the higher occupancy, properties are seeing an exceptional 78.6 percent increase in summer revenues compared to the pandemic summer of 2020.  More significantly, when comparing the entire summer with the then record-breaking summer of 2019, occupancy is up a strong 15.3 percent, daily rates are up 19.8 percent, and revenues are up an impressive 38.2 percent from just two years ago at this time.

“The astronomical gains of the early season have settled down in a more typical pattern to previous years, but still remain inflated,” explained Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “This is partially because we are seeing a slowing in the pent-up demand that was still very high six months ago, and because the Southeast region began its rebound by early summer last year—well ahead of much of the country,” he continued.

Booking momentum driving into winter

Looking ahead to the six-month winter season that is tracked from September through February, bookings for Southeast vacations are continuing to go gangbusters.  As of July 31, occupancy on-the-books for the winter is up a whopping 93.5 percent compared to last year at this same time. The ADR is up 6.9 percent for the full season with growth being reported in all six months. The combination of strong occupancy and rates is showing a remarkable 106. 9 percent increase in revenue compared to last year at this time,

Although not as dramatic as the single year comparison, when reviewing the difference to two years ago, the growth remains impressive. Winter occupancy on-the-books is up a stunning 58.5 percent compared to Winter 2019-20 with daily rates up a healthy 16.9 percent for the season. The result is an exceptional 85.3 percent increase in aggregated winter revenue compared to just two years ago at this time.

Economic Indicators

Continuing to maintain its meteoric levels, the Dow Jones Industrial Average (DJIA) rose 1.25 percent in July to post its fifth all-time end-of-month closing in the past seven months. The DJIA is more than 8,600 points higher than it was last year at this time as financial markets were continuing recovery from the initial shock of the pandemic shutdown. The Consumer Confidence Index (CCI) barely moved during July, up a scant 0.2 points but it is the seventh consecutive monthly increase and the highest the index has been since before the onset of the pandemic.

“Strong earnings reports in many sectors drove much of the growth and that was supported by positive consumer confidence which in turn is driving sustained consumer spending,” Foley noted.

Employers once again exceeded expectations to add 943,000 new jobs during July driving the national Unemployment Rate down sharply to 5.4 percent from 5.9 percent in June. For the third consecutive month, the leisure and hospitality sector led the way. Wages also ticked up higher than expected during July—up 0.4 percent for the month and bringing the increase to four percent for the year.

“Rising room rates that have been strongly supported by pent-up demand and fueled by increasing consumer confidence and higher-than-usual savings accounts, continued to surpass all expectations for July,” added Foley. “The extraordinarily high room rates this summer were almost 20 percent higher than the two summers ago and while they have been a boon to properties in recovering the lost revenue from 2020, it is uncertain if those rates will be sustainable for the long-run,” he concluded.

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*DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks resort performance in selected mountain and southeast U.S. destinations. They compile forward-looking reservation data each month and provide individualized and aggregated results to subscribers at participating resorts. Data from the Southeast is derived from five resort destinations in three states including South Carolina, Georgia, and Florida.