Trends Booking Pace Declining in Southeast Resort Destinations but Rates and Revenue Continue to Soar

At the halfway point of the all-important summer season for resort destinations throughout Florida and coastal Georgia and South Carolina, year-over-year booking pace is decreasing when compared to last year’s surprisingly robust summer but overall results remain strong.  Both occupancy gains and record-setting room rates are continuing to surge on a year-over-year basis and this summer is trending well ahead of both last summer and the pre-pandemic summer of 2019 as measured from March through August. The latest report was released last week by DestiMetrics,* a division of Vermont-based Inntopia in their monthly Market Briefing. Building on a foundation of strong early bookings for the summer months back in late winter and spring, participating destinations are working to keep up with steady demand even though there has been slight slowing in booking volume in recent weeks. The analysis includes monthly, seasonal, and annual comparisons about occupancy, Average Daily Rate (ADR), and revenues through May 31.

May results

Actual occupancy for the month of May was up a stunning 119.4 percent percent compared to last year at this time and is the result of massive shutdowns on almost all travel which persisted in the Southeast through the first half of May 2020. Daily rates this May were also a healthy 22.5 percent in a year-over-year comparison to last May. The combination of strong occupancy and exceptionally strong rates delivered a 168.7 percent increase in aggregated revenues for the month compared to one year ago.

For a more typical comparison, a review of the 2019 record-setting summer season two years ago revealed that May occupancy for 2021 was up 16.8 percent for the month while daily rates were up 19.3 percent compared to two years ago at this time.

Summer is going gangbusters

Exceptional strength and growth continue to be the adjectives describing the full six-month summer season. As of May 31, occupancy for the full summer season including completed stays and those on-the-books, are up a strong 84.7 percent compared to last year at this time and is up an impressive 19.5 percent compared to the record-setting summer of 2019.  Occupancy is up in all six summer months compared to last year.

The Average Daily Rate (ADR) in the past two years has also exhibited strength and impressive growth during and after the peak of the pandemic. Compared to last year, ADR is up a comfortable 6.1 percent and along with the increased occupancy, is delivering an impressive 95.9 percent increase in aggregated revenues over last year at this time. The comparison to the record-breaking summer of 2019 is equally remarkable with daily rates up 20.2 percent and revenues up 43.7 percent compared to the more typical patterns of two years ago.

“This has undoubtedly been a remarkable rebound for the Southeast with soaring occupancy and rates,” reported Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “But success can have consequences and those are showing up in the data as last year’s reopening surge was so strong that we are seeing a steep year-over-year declines in the booking pace when comparing the number of bookings taken in May this year versus last year. However, even though other destinations are opening up and competing with the Southeast for overnight visitors, the region has established such a strong foundation of reservations that even if there is some softening in occupancy gains, these destinations are on track for a very successful summer season,” he emphasized.

Looking to Early Winter

As bookings start to roll in for the upcoming winter season beginning in September, the summer strength is continuing into the winter months.  As of May 31, winter occupancy on-the-books is up 25.6 percent compared to last winter at this time with daily rates up an aggregated 8.7 percent.  When compared to two years ago at this time, winter occupancy on-the-books is up 57.8 percent with rates up 16.5 percent.

Economic Indicators

The Dow Jones Industrial Average (DJIA) continued its meteoric rise with a 1.9 percent gain during the month to post another all-time record for a monthly closing. This is the fourth consecutive monthly gain and the ninth month-over-month gain in the past 12 months. It is 36 percent higher than it was in May 2020 after suffering major losses in the previous February, March, and April and investors are encouraged by growing vaccination rates and increased economic activity. The Consumer Confidence Index (CCI) was essentially unchanged in May by dipping a scant 0.3 points to 117.2. Analysts suggest that while consumers seem assured about the immediate economic future, their outlook for the short-term declined somewhat suggesting the potential for a dip later in the summer.

The national Unemployment Rate dropped 0.3 percent during April to take it from 6.1 to 5.8 percent in May as employers added 559,000 new jobs.  Although better than the anemic job growth in April, the number fell short of expectations for the second consecutive month. In addition to the new jobs, the decline in the unemployment rate can also be attributed to discouraged workers leaving the workforce as they halted their job search. Although stagnant in recent weeks, the 5.8 percent unemployment rates is dramatically better than May 2020 when it was at 13.2 percent.

“The Southeast continues to show great strength in both occupancy and daily rates which are delivering impressive revenues compared to both last summer and the previous summer as pandemic-related restrictions have been largely lifted for many months.  The decline in booking pace has more to do with the incredible strength of reopening in late May last year than any deficiency in booking volume this year,” continued Foley. “But as other destinations around the U.S. open up more widely, competition is heating up for overnight visitors and some modest slowing in booking volume for the Southeast has started appearing in the data and could potentially start nudging room rates down depending on the aggressiveness of destination rivals.  That said, the Southeast is very well positioned at the moment for another record-breaking season in occupancy and revenues with momentum currently moving into the winter months,” 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.