Trends
April’s lively booking pace driven by pent-up demand for deferred mountain vacations from last winter, retreated somewhat during May even as daily rates continued to show strength. Despite that softening in all months except October, overall summer occupancy remains up 3.7 percent with increased occupancy in all months except October. Other notable findings in DestiMetrics’ monthly Market Briefing released by Inntopia* with data collected through May 31, revealed that daily rates and aggregated revenue for the summer are up, the 4th of July weekend is looking strong, length-of-stay is surging, and Canadian bookings are rising…modestly.
May Posts Gains
Occupancy during May was up 3.9 percent compared to May 2025, and the Average Daily Rate (ADR) was up a solid 8.2 percent with the increase in both leading to a considerable 12.6 percent increase in revenues.
Summer metrics slipped but remain strong
Despite a 2.1 percent decline in occupancy booking pace during May, as of May 31 occupancy for the full summer from May through October is up 3.7 percent in a year-over-year comparison to last year with all months except October posting gains. Daily rates are up 6.4 percent for the season with gains being recorded in all six months and when coupled with the higher occupancy, properties are currently posting an aggregated 10.3 percent increase in revenues.
“We are launching into the summer on an optimistic note this month—even with the slight dip in booking pace—as we have been watching consumers buying into summer travel during the past two weeks despite one of the most dramatically mixed bag of economic indicators we’ve seen in a long time,” reported Tom Foley, director of Business Intelligence for Inntopia. “That pent-up demand from the dismal winter helped get the summer off to a good early start and allowed properties to tinker with rates and determine the rate tolerance from consumers with the Luxury category doing particularly well,” he continued. Plus, “the big 250th celebration for the 4th of July is also looking promising, with the holiday falling on a Saturday this year and the long weekend shaping up to further summer’s strength.”
Economic indicators
The Dow Jones Industrial Average (DJIA) added a strong 2.8 percent in May to close the month with its second consecutive all-time high at 51,032.5 points as markets continued to build on April’s momentum that was marked by stronger than expected earnings and some softening in oil prices. “The Dow is also benefitting from the boom in Artificial Intelligence (AI) stocks on the Nasdaq and that is carrying over to all Wall Street markets, with the Dow capturing some of that momentum,” observed Foley. “However, financial markets seem to be completely ignoring the realities on Main Street and the impact of sharply higher inflation on the average consumer whose optimism has dropped considerably as budgets have gotten tighter.”
Consumer anxiety was apparent this month according to both the Consumer Confidence Index (CCI) tracked by the Conference Board and the Consumer Sentiment Index (CSI) from the University of Michigan as both retreated. The CCI was down only a scant 0.7 points to 93.1 (its first decline since January), while the CSI fell a full five points to 44.8 points and its lowest level in its 48-year history. Inflation was cited as the primary reason for the waning confidence with pricing pressure most notable among older and younger respondents in the CCI. Results from the CSI showed that lower income groups and those without a college degree—the groups more impacted by higher fuel prices and inflation—had the more negative responses. Both indexes are below their 24-month average and yet bookings and ADR are up compared to last year as respondents indicated a continued intent to travel.
For the third consecutive month, job creation and the National Unemployment Rate exceeded expectations with employers adding 172,000 new jobs during May while the unemployment rate once again remained unchanged at 4.3 percent. With job numbers for March and April also revised upward, average monthly job creation of 114,000 in 2026 is dramatically higher than the rate of 10,000/month last year. Investment in AI and corporate tax breaks are credited with the momentum. The Leisure and Hospitality sector was at the top of the list with 70,000 new positions and was much stronger than the monthly average of 14,900 over the past year. And while wages were up during May (3.4 percent), they did not keep up with the rate of inflation (4.2 percent) and that translates to an aggregated 0.8 percent wage cut for workers during May—a wage decline for the second consecutive month which puts more pressure on discretionary spending—including travel.
Once again, the national Inflation Rate and the Consumer Price Index (CPI) grew sharply during May for the third consecutive month as the inflation rate soared at its fastest pace since the post-pandemic era to 4.2 percent and its highest level since April 2023 while prices were up 0.5 percent. Energy costs were the primary culprit with gasoline up 40.5 percent and airfares up 26.7 percent compared to last year.
“The price of gas and airfare are the primary concerns for the travel industry right now but there is also concern about overall discretionary spending as consumers face these considerable increases in their travel budgets—especially as inflation is now higher than aggregated income for the second consecutive month,” explained Foley. “This gap between shrinking wages and rising costs puts increasing pressure on consumers about where discretionary dollars are spent and in these kinds of economic crunches, travel purchases can be one of the most obvious expenses to reduce or eliminate.
Foley further elaborated by saying “we can’t ignore the fact that we enjoy the benefit of a more affluent consumer than average, which is one reason we are seeing such strong performance among Luxury properties, even as consumers struggle day-to-day.”
Focusing on….
Peak summer months are slipping while October is shining in a shift from the data last month as bookings made in May for arrivals in May through September lost ground compared to bookings made last May for those months last year. Meanwhile, October enjoyed a solid boost—although on relatively small volume at this point. Bookings in May for arrivals in the month of May dropped 12.6 percent compared to last year, while bookings for August arrivals were down a sharp 11 percent, and the other summer months posted single-digit percentage losses—except October which picked up 2.4 percent.
Bookings in May for arrival from May 1 to Oct. 31 totaled 155,797 nights which is 6,522 fewer nights than were booked last May for the same period. However, the average room rate for those bookings was $409, up a strong 7.6 percent compared to last year, helping to offset the softer booking volume and enhancing the bottom line with an aggregated $2.02 million in revenues—up 3.3 percent from last year at this time.
The 4th of July (a Saturday this year) is looking good with occupancy for that day up 4.7 percent and July 5 up 2.9 percent, while the eve of the holiday—a Friday—is showing some of the strongest occupancy of the month, indicating the likelihood of plenty of long weekend visits.
International bookings, particularly Canadian, got a nice bump in May but remain down sharply from 2024. Overall bookings for the four primary international markets are now up 10.3 percent over last summer (compared to a 4.1 percent increase posted last month) and making an improvement in the level of decline from international visitation to being down 42.1 percent compared to 2024. “It is still a dramatic loss from international visitors but at least it is showing signs of slight improvement,” offered Foley.
Canada is now up 19 percent from last year at this time but down 36.2 percent from 2024. This strong increase marks a significant turnaround in booking activity from that market. “We are watching this surprising surge from Canada in the coming weeks to see if this is an emerging trend or an anomaly during the ‘low season’ for Canadian visitation,” said Foley.
Mexico is down 11.4 percent, Western Europe is down 8.3 percent, and Oceania is up two percent year-over-year–but remains down 23.2 percent from 2024.
Length-of-Stay jumped during May as consumers opted for longer stays despite economic challenges and higher room rates—surging from an aggregated average of 2.28 nights last year at this time to 2.8 night this year with longer stays in every month but May with October showing the greatest extension.
Summer’s daily rates ticked up slightly during May, moving up 0.5 percent from a 5.9 percent gain in April to a 6.4 percent gain as of May 31.
Luxury properties leading in the pricing terciles, defined during the summer months as $401/night and above, which is currently up 7.6 percent in occupancy and up 6.5 percent for daily rates. That combination is delivering an aggregated 14.6 percent gain in summer revenues. In stark contrast, Economy properties priced at $250/night and below have reduced rates 1.1 percent but have only captured a 2.4 percent gain in occupancy. Moderate properties between $251 and $450/night have eked out an 0.3 percent gain in occupancy with their 2.6 percent increase in ADR.
“From an occupancy and rate standpoint, the summer is looking very good for lodging properties right now and they are clearly ‘making hay while the sun shines,’” noted Foley. “But there remain some significant issues of concern going forward including the spike in inflation, decreasing discretionary spending dollars, the cost of even getting to resorts up 40 percent by car and nearly 30 percent by air, and with the price of lodging, meals, recreation, and souvenirs all going up. Additionally, the prospect of the Federal Reserve Bank potentially increasing interest rates because of consistently healthy jobs reports could place even more pressure on consumers,” he continued. “So, for the moment, western mountain destination properties are in good shape and recovering from a grim winter but there are undeniable headwinds blowing that could have a potentially small or large impact.
