Denver, Colo., Feb. 20, 2019—With most mountain regions receiving steady and abundant snowfall, all traces of last year’s “snow hangover” evaporated during January as a strong booking pace throughout the month boosted aggregated occupancy and revenues for both the month and full winter season. In the most recently reported data released by Inntopia in their monthly DestiMetrics* Market Briefing, as of Jan. 31, bookings made in January for arrivals in January were up a dramatic 41.5 percent in a year-over-year (YOY) comparison to last year at the same time. As a result, actual occupancy for the month of January was up 5.5 percent compared to last year while the Average Daily Rate (ADR) rose 3.5 percent compared to the previous January. The combination of strong occupancy and rate for the month delivered a robust 9.1 percent increase in revenues over last January.
“The impact of snowfall on mountain community business can’t be denied and the 2018-19 season is a textbook example of how sustained and widespread snowfall can drive occupancy and room rates,” confirmed Tom Foley, senior vice president of Business Operations and Analytics for Inntopia.
Strong, constant snowfall has also elevated aggregated figures for the full winter season. As of Jan. 31, aggregated occupancy for the months of November through April is up 6.1 percent in a YOY comparison to the same time last year. The only winter month posting a decline is April, which is currently down 10.5 percent in occupancy and 17.2 percent in revenues compared to last year. The decline is being attributed to the shift in the Easter holiday from April 1 last year to April 20 this year which is after many resorts have closed for the season. ADR has remained essentially flat for the winter with a scant 0.1 percent increase in rate. But, bolstered by the strength of both actual and on-the-books occupancy through the remainder of the season, revenue is up a healthy 6.1 percent for the season.
“It has been interesting to monitor the slowing of room rates in November and December that was partially triggered by some consumer caution based on last season’s meager snowfall, but also due to some consumer resistance to continuing room rate increases in the past few years,” observed Foley. “But, once again, we’re seeing how generous snowfall can offset a lot of negatives since we are seeing that room rates have rebounded for January, February, and March compared to where they were in December. However, March still remains down very slightly in a year-over-year comparison, and overall, the season’s rates are pacing lower than they have since the 2012-13 season,” he clarified.
Economic indicators are also tracked to help anticipate consumer travel behavior. Market volatility diminished in January compared to the roller coaster ride that market indexes rode during December. The Dow Jones Industrial Average (DJIA) reclaimed much of December’s losses despite several notable swings, to close on Jan. 31 a dramatic 7.8 percent higher than December. The Consumer Confidence Index (CCI) declined for the third consecutive month to finish 6.4 points below December. More notably, this is the CCI’s lowest point since July 2017 and is a notable 12.8 percent below last October. Employers added 302,000 new jobs during January and far exceeded analyst’s predictions although December’s job creation numbers were corrected down from the initial report of 312,000 down to 222,000. Wages for employers remained steady during January and gained 3.2 percent over the past 12 months.
“Surprisingly, the government shutdown seems to have had little impact on overall investment, and much of January’s rebound was driven by very strong employment numbers and a slight easing of trade concerns,” continued Foley. “That said, even though consumers’ feelings about current conditions remained about the same as last month, their expectations declined sharply as the whipsaw activity of the markets combined with the government shutdown impacted them directly. However, government shutdowns have historically had a sharp but short-lived impact on confidence and expectations are that there will be more stability next month,” he added.
The Briefing also emphasized that the two uncontrollable elements of the winter season– weather and the economy–are combining to create favorable comparisons to last year’s numbers when snowfall was meager, and practically non-existent in January 2018. The report cautioned that a weaker economy and/or average snowfall next year could potentially create more pressure on creeping rate increases.
“As recently as 60 days ago, we were seeing that consumers were pushing back somewhat against rising rates but now, what is shaping up to be one of the best snow years in recent memory, is driving rates and revenue toward flat for the season. While that is not ideal, it is an improvement from last month,” noted Foley. “We are setting a pretty high bar for next season but for now, mountain visitors and the mountain lodging community are reveling in an excellent ski and snowboard season,” 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 18 mountain destination communities, representing approximately 30,000 rooms across Colorado, Utah, California, Nevada, Wyoming, 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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