As of July 31, the midpoint of the summer season for western mountain destinations, variations in lodging performance among different regions and properties throughout the seven participating states and 290 properties is more apparent than in previous months. However, aggregated data released last week by Inntopia in their monthly DestiMetrics* Market Briefing revealed that while occupancy growth is slowing slightly as the year progresses, overall metrics continue to creep upward toward an expected seventh consecutive summer record.
Occupancy for the month of July dipped a scant 0.7 percent compared to last July but revenue managed a two percent gain for the month bolstered by a 2.6 percent gain in Average Daily rate (ADR). For the full summer from May through October, occupancy is up 2.2 percent and ADR is up 2.1 percent, leading to a seasonal revenue increase of 4.3 percent compared to last summer. Along with July’s slight decrease, September is also showing a 5.4 percent decrease in occupancy but the other four summer months are posting increases.
“Disparity among destinations is broader than in the past, as some struggle with capacity issues, others with wildfire smoke, and others are still working to refine and capitalize on their summer message,” observed Tom Foley, vice president of Business Intelligence for Inntopia. “As some properties reach essentially full capacity on weekends and holiday periods, it is pretty difficult to increase the occupancy numbers. But, with modest rate upticks, aggregate revenues are managing to keep a bit ahead of last summer,” he continued.
The Briefing also reported on bookings made in July for arrivals in the six months of July through December. As of July 31, bookings made in July for arrivals in July through December are down four percent compared to the booking pace last July. While bookings made in July made for arrivals in that month were up 5.8 percent, bookings for August through December arrivals were down every month except November in a year-over-year comparison.
Key economic indicators were also summarized in the monthly report. The Dow Jones Industrial Average (DJIA) rose a healthy 4.2 percent and delivered the third increase in the past four months while moving it above the 25,000-point benchmark for the first time since February. A surge in the Gross Domestic Product (GDP) during the second quarter (Q2) of the year was credited with the uptick in the DJIA although a cautionary note suggested that the strength of the GDP was reflecting stockpiling and bulk buying in advance of the U.S. imposition of tariffs on Canadian, European, and Chinese products.
“Most analysts agree that those tariffs will have an impact on earnings, hiring, and consumer prices over the coming months if the tariff disagreements are not resolved during that time,” cautioned Foley. “Analysts also agree that the Q3 GDP in mid-October will be key to determining whether these trade actions have been effective or damaging to the U.S. economy in the short-term.”
The Consumer Confidence Index (CCI) edged up a slight 0.3 percent making it the fourth increase in the past seven months but still indicating a flattening pattern as up and down shifts have been less than 1.4 percent in the past three months.
Employers added 157,000 new jobs in July—well below the 193,000 new positions expected and a considerable cooling in job creation from the previous two months. However, despite the decrease, the national employment rate did drop to 3.9 percent.
“A subtle but notable shift occurred this month in the number of destinations reporting year-over-year increases in occupancy and revenue compared to the number reporting decreases,” revealed Foley. “Last year at this time, 12 of our 18 participating destinations were reporting occupancy gains while six were reporting decreases. This year, that has shifted to a 50/50 split with only nine reporting increases and nine reporting decreases. Although a rough wildfire season may be impacting performance in some regions, it is notable that as consumer confidence levels out, inflation picks up, and trade tariffs threaten markets and pricing, we might just be seeing some early signs of economically-driven softening in bookings and rate for mountain destinations in the months ahead,” he concluded.
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