Trends Southeast Destinations Continue Record-Breaking Booking Pace

After last month’s record-breaking performance, lodging properties in resort destinations in Florida, Georgia, and South Carolina continued to build on that impressive record over the last 30 days as the Southeast region rapidly reopened during June. According to the most recent monthly Market Briefing released by DestiMetrics* yesterday, after a record-breaking surge in summer bookings during May, June bookings slowed down slightly but still maintained a near-record pace. Results for bookings, occupancy, room rate, and revenues are from data collected through June 30 and is aggregated from properties in five resort destinations.

Bookings made in June for arrival during the month of June were up a whopping 192.9 percent while July is up 69.6 percent and August is up a comfortable 13.9 percent in comparison to the same time last year. Bookings made for arrivals in September, October, and November were down.

Driven by the robust booking pace, actual occupancy for the month of June was only down 3.2 percent compared to last June which represents a stunning recovery from one month ago. Also boosting results for participating properties was an increase of the Average Daily Rate (ADR) that rose an aggregated 7.3 percent compared to last June. The combination of strong occupancy and higher rates led to a 3.8 percent increase in June revenues.

June bookings for arrivals in the months of June through November were up a striking 36.9 percent when compared to bookings made in June 2019 for the same six-month period. This is the second consecutive month showing year-over-year improvement since the worldwide Covid-19 pandemic was declared in March.

“The Southeast region continued its rapid rate of post-closure recovery during the month of June following the old baseball adage that claims, ‘if you build it, they will come,’ which has proven very true for the region,” observed Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “But as reassuring as this strong recovery is shaping up driven by strong rates and enthusiastic bookings, it is important to note that we are also seeing a higher than normal rate of cancellation relative to bookings,” he cautioned.

Looking at the full summer season that stretches from March through August, occupancy for the full summer is down 28.1 percent as of June 30 compared to Summer 2019. And, while still running well behind last season, it has recovered an additional five percent from the May figures. Occupancy remains down in five of the six summer months with the exception of July, which is currently up 2.1 percent compared to last July. ADR remains very strong and despite the steep plunge in April, is up an aggregated 12.3 percent for the full summer. Revenues continue to lag behind last year because of the widespread closures in April and May, but the individual months of June, July, and August are clawing back up and are currently running ahead of last year’s revenues.

Economic measurements

As the economy continued to reopen in June, key indicators showed improvement. The Dow Jones Industrial Average (DJIA) crept up 0.8 percent during June from the previous month and marked the third consecutive month of gains for the Index after the dramatic declines in February and March. There was considerable fluctuation in the Index during the month as early reports of strong business recovery following the Memorial Day weekend were tempered by the resurgence of new cases, hospitalizations, and fatalities resulting from Covid-19.

“These uncertain financial markets tend to erode consumer’s trust in economic conditions and can result in their unwillingness to invest in discretionary purchases such as destination vacations,” warned Foley.

Cautious optimism about the future appeared in the Consumer Confidence Index (CCI) which rose 12.2 points or 14.2 percent during June. However, it remains dramatically below its most recent high in February and more than 21 percent lower than it was one year ago at this time. The national Unemployment Rate declined to 11.1 percent during June as employers added 4.4 million jobs to support the reopening of many businesses. However, new unemployment claims, while declining from the previous two months, continue to exceed 1.3 million new claims per week.

Updated look at winter

Despite the resurgence of summer bookings, as of June 30, that same strength has not yet materialized for winter bookings for the months of September through February 2021. On-the-books occupancy is down 9.6 percent compared to the same time last year, but rate strength is persisting with the ADR up a strong 9.7 percent. The result is a scant 0.9 percent decrease in revenues for the period.

“Although we’ve seen a remarkable recovery in the past two months that give properties much to cheer about, there are several ongoing issues that are very concerning—most notably the dramatic rise of Covid-19 cases, hospitalizations, and deaths throughout the region,” explained Foley. “The challenge going forward for the Southeast region is to find the delicate balance between capturing as much business as safely possible during the high summer season with the need to protect public health. The pandemic, an uncertain storm season, and economic fallout can all have significant impacts on the remaining two summer months, but for the moment, the region is responding favorably to the current and ever-changing circumstances,” Foley concluded.