Slight Cooling in Occupancy for Southeast Lodging Properties During December

Comparisons to two years ago shows impressive revenue growth

BRADENTON, Fla., Jan. 15, 2020—In the monthly Market Briefings prepared and distributed by the DestiMetrics* division of Vermont-based Inntopia, year-over-year comparisons for each month of the previous year are provided in three categories: occupancy, daily rate, and revenue. The report contains aggregated analysis for participating lodging properties from nine Southeast resort destinations in five states including Florida, Georgia, Alabama, South Carolina, and Virginia. In the Briefing released yesterday, the analysis includes comparisons to the same time last year, as of Dec. 31, and also to the previous year. Making comparisons to two winters ago helps with understanding the impact of Hurricane Michael, which dramatically skewed typical lodging patterns for the Florida Panhandle last year as relief workers and displaced residents occupied many of the available properties. That skewed data over several months also impacted the aggregated data for the entire Southeast region.

As of Dec. 31, aggregated occupancy for the month of December was up 2.7 percent compared to December 2018. The Average Daily Rate (ADR) was up a strong 7.2 percent and the combination of increased occupancy and rate delivered a formidable 10.1 percent increase in revenues for the Southeast region during the month in a year-over-year comparison to last December.

However, looking at the full winter season that is measured from September through February, the data delivers a slightly different picture. As of Dec. 31, occupancy is down 3.4 percent for the full season compared to last winter, with notable decreases in September, October, and November. In contrast, the last three months of winter are showing slight gains in occupancy to somewhat offset the slow start to winter. Daily rates for the overall winter have inched up 1.4 percent compared to last winter but that slight uptick was not enough to offset the lower occupancy. The result is a scant 0.2 percent decline in aggregated revenue for the winter.

“Even with February, the traditionally strongest month of the winter season ahead, we are still seeing that lodging performance in the Southeast has taken a step back from where it was last month,” commented Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “That said, the lengthy and long-term recovery from Hurricane Michael along the Florida Panhandle through much of last winter makes it tricky to make simple comparisons to last year because occupancy in that particular region was unusually dense with the high number of workers and displaced residents occupying much of the available lodging at that time.”

Foley continued, “Perhaps the most striking difference we found was when we compared this year’s data to two years ago which was a more typical winter season. While the month-to-month comparison to Winter 2017-18 shows a moderate 1.5 percent decrease in occupancy for the winter, the average daily rates are up a stunning 25 percent in just two years to deliver an equally impressive 23 percent increase in aggregated revenues compared to the winter of 2017-18,” he added.

Bookings made during the month of December for arrivals in December through May reveal another piece of the lodging puzzle. Overall bookings for those six months are down an aggregated 10.1 percent as of Dec. 31 in comparison to bookings made during the same time last year. While bookings for December, January, and February arrivals all posted sharp declines ranging from 16.5 percent for January to 56.6 percent for February; April and May bookings were up 20.3 percent and 35.3 percent respectively.

The Briefing suggests that some of this booking volatility can be explained by economic indicators and their impact on consumer travel decisions. The Consumer Confidence Index (CCI) experienced a slight dip of 0.2 percent in December and marks the fourth decline in the past five months. Meanwhile, the national Unemployment Rate remained unchanged in December at 3.5 percent. Employers added 145,000 new jobs, but that was below the forecast of 160,000. Earnings rose 2.9 percent during the month but it is the softest earnings growth since the middle of 2018 and may be influencing the slip in confidence.

In contrast, the Dow Jones Industrial Average (DJIA) added 1.4 percent during December to close the month with its highest closing ever. Compared to last December, the Dow is 21.8 percent higher than it was last year although part of that significant difference is because in December 2018 there was a sharp selloff.

“Complex data in the Southeast has made interpretation of the data challenging since Hurricane Michael hit and threw typical patterns out of kilter,” Foley acknowledged. “What we can confirm though is when we compared this winter to a more typical winter like 2017-18, rate momentum and strength throughout the region is persisting. Our larger concern moving forward is how the economic indicators change and how consumers react to any major shifts in economic news,” he concluded.

-30-

*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 nine resort destinations in five states including South Carolina, Virginia, Georgia, Florida, and Alabama.