Booking Pace Drops Sharply At Western Mountain Destinations

In a notable change from last month, a combination of factors conspired during January to cool down bookings while narrowing occupancy and revenue margins for the 2024-25 ski and snowboard season. Citing uneven snowfall, erratic economic news, slipping consumer confidence, and renewed resistance to rate increases, the DestiMetrics* monthly Market Briefing released last week with aggregated data from 17 mountain destinations reported on the recent downturn. The summary, written and distributed by the Business Intelligence division of Inntopia, described the most significant variables affecting the shift in bookings during January, with a sluggish booking pace for arrivals both in-the-month and for the remainder of the season resulting in fewer actual and on-the-books reservations.

January occupancy slipped as rates moved up

In a year-over-year comparison to last January, the Average Daily Rate (ADR) moved up 3.7 percent for an average rate of $667/night aggregated across all property types. But as rates moved up, occupancy edged down 1.7 percent, delivering a 1.9 percent increase in revenue for the month.

Decreased booking pace having an impact on the season

A big change in January’s booking pace—bookings made in January for that month as well as the five months ahead—is the reason for the softening seasonal performance with booking pace down 11.3 percent compared to last year at this time. Of the January bookings, only arrivals for April posted an uptick—surging up 16.9 percent while the other five months are all down—including the vital month of March which declined 4.6 percent. At the season’s midpoint, data for the full winter including both in-the-bank for the first half on the season (November through January) and on-the-books for the second half (from February through April) reveals that occupancy has eked out a scant 0.8 percent increase over last winter with decreases in November through January while February through April are currently gaining. This is a retreat from last month’s 1.2 percent gain in occupancy. The ADR for the winter is up a slight 1.1 percent for the full season and, like occupancy, slipped down during the month from a 1.6 percent gain as of Dec. 31. When coupled with the modestly higher occupancy, that slight rate gain is delivering a moderate 1.9 percent increase in seasonal revenue.

“After a pretty lively final week of December and the start of January, bolstered by widespread snowfall during that time, we saw a marked cooling in bookings during January,” reported Tom Foley, senior vice president of Business Intelligence for Inntopia. “Adequate but not spectacular snowfall played a role in the softening bookings, but so did a shakeup in economic stability and consumer confidence,” he continued. “Just as we saw signs of price-sensitivity easing, it became a consideration for consumers again this month as broader price and employment concerns caused some skiers and riders to hit the pause button on their mountain bookings.”

Economic indicators

*In a marked rebound from December’s deep slide, the Dow Jones Industrial Average (DJIA) recovered much of what was lost in December and rose 4.7 percent—more than two thousand points to bring it back above the 44,000-point threshold first reached in November. Markets grew despite signals from the Federal Reserve about no further interest rate cuts this year and uncertainty about policies from the new administration regarding tariffs and potential trade wars.

*The Conference Board’s Consumer Confidence Index (CCI) and the Consumer Sentiment Index (CSI) from the University of Michigan both retreated in January with the CCI falling a sharp 4.1 percent while the CSI reaction was more muted and down only slightly from December. Once again, consumers cited concerns about prices, wages, job availability, and higher inflation as the primary reasons for their shrinking confidence. “Optimism on Wall Street during January didn’t fully transfer to consumers, and the stagnation we’ve seen in confidence figures for the past few months can keep consumer markets, including travel purchases, from growing,” cautioned Foley.

*The Unemployment Rate dipped again in January from 4.1 to four percent as employers added a moderate 143,000 new positions to payrolls. However, job numbers for both last November and December were adjusted significantly for a combined 568,000 jobs for those two months—100,000 more than originally reported. Wages also increased 0.5 percent to bring them up 4.1 percent compared to last year and comfortably ahead of the three percent inflation rate.

*Inflation rose from 2.9 to three percent and with the Consumer Price Index (CPI) at 317.67 points, marks the single largest month-over-month increase in 16 months—since August 2023—and considerably higher than economists predicted.

Foley also noted that “airfares, dining out, and gasoline prices all rose during January and consumers reacted. After several months of easing price-sensitivity at mountain resorts, there is evidence that it is returning,” he continued. Foley went on to clarify that “although the 1.1 percent rate gains are well below inflation–making mountain travel an attractive option, there are other forces at play for consumers, and properties have little room left to ease rates. Perhaps some small tweaks will trigger an increase in bookings for later in the season.”

Watching…

Booking lead-times were shortened in late December and into early January as skiers and riders responded to significant snowfall in many western regions and made their bookings much closer to arrival date than usual. By the end of January, lead-time for bookings elongated as consumers focused on the April booking surge and some warm weather travel in summer, and by the end of the month, was comparable to last year at this time.

Daily rates in January were just slightly below December rates but in a year-over-year comparison, are continuing to soften—decreasing from an already modest 1.6 percent gain in December to a lower 1.1 percent increase by Jan. 31.

Length of stay has been down year-over-year for most of the past two years as visitors opted to shorten their stay rather than forego their trip or downgrade their lodging experience. That trend has reversed since 2022 when declines were nearly two full nights shorter than pre-pandemic. As of Jan. 31, that shorter length-of-stay has shrunk to a scant 0.2 nights shorter than January 2022. “Changes in length-of-stay mainly reflect changes in rate tolerance,” offered Foley. “The pick-up in the length of a visitor’s stay over the past few months was one of our indicators of easing rate resistance. But when consumers are hesitant or uncomfortable with rates, they often book shorter stays rather than giving up the trip entirely, so we’ll be watching this metric closely to see if consumers are moving in the direction of shorter or longer stays.”

“At the halfway point in the season, mountain lodging properties are facing some pretty gusty headwinds ranging from erratic snowfall to mixed messages from markets and trade policies–and the combination is contributing to a more cautious consumer,” Foley observed. “Price-sensitivity is once again being demonstrated after fading somewhat in the past several months and without more generosity from Mother Nature, is likely to continue,” he added. “That said, there is still half a season to go and a late-April Easter holiday offers an excellent opportunity to extend occupancy and revenue for the season. And although things have slowed down, all the metrics are still on the positive side of the ledger,” concluded.