BRADENTON, Fla., Nov. 14, 2019—Destination properties throughout the Southeast started the winter season (September through March) at a sluggish pace that slowed further during October and is tracking well below last year. However, a turnaround is on-the-books for November and the last three months of the winter season are showing a notable uptick. The continued decline in occupancy in the first two months of the season among participating properties at nine resort destinations in five southern states was released yesterday in the monthly DestiMetrics* Market Briefing by Inntopia. All results include data collected through Oct. 31 and is aggregated among all properties.
For the month of October, actual occupancy was down 5.6 percent compared to last October while the Average Daily Rate (ADR) for the month was up 3.3 percent. Even with higher rates, revenues for the month were down 2.5 percent in a year-over-year comparison. This is an improvement over September, which was down 11 percent.
The pattern of a soft early season for occupancy followed by stronger late season is evident in October’s booking pace. Bookings made in October for arrivals in October through March were down 10.7 percent compared to the booking pace last October. Four of the months experienced decreased bookings, with the exception of February and March—up 4.6 and 22.9 percent respectively
The data goes further shows that as of Oct. 31, occupancy for the region for the full six-month period is down three percent compared to last year while the ADR is up 1.5 percent and is increasing in every month with January showing the largest increase in rate—8.5 percent. However, increases in room rates are not sufficient to offset the declining occupancy figures, and as a result revenue is down 1.5 percent for the season.
Complicating the analysis is the comparison to last year’s data when in the aftermath of Hurricane Michael, relief workers and displaced families occupied a significant portion of the inventory along the Florida Panhandle. This year, the Free Independent Traveler (FIT) is over-performing last year, but those visitors are still not enough high enough in volume to offset last winter’s strong occupancy due to relief workers and displaced families.
“The upcoming winter at Southeast destinations continues to be atypical when compared to both last summer and the last few winter seasons,” said Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “And, those anomalies are looking less like a fluke and more like a pattern as we head into the middle of the winter season.”
Economic indicators continue to shape consumer expectations and behavior after months of rapidly changing news that sent markets on rapid climbs and descents. October brought some stability to markets and primary economic indicators. The Dow Jones Industrial Average (DJIA) moved up a modest 1.25 percent and closed the month just slightly below the monthly record-setting close last July. The DJIA is now 8.7 percent higher than the same time last year. On the stability front, this is the second consecutive month that the month-over-month variance was less than 1.5 percent.
“It may be too early to tell if this is a stabilizing trend or if Wall Street is holding its breath heading into a contentious political process in Washington, but after many months of wild swings in the Dow ranging anywhere from 2.5 to 8.5 percent in month-to-month comparisons, this is at least a respite,” continued Foley. “And economic stability fosters consumer confidence and spending,” he added.
However, the Consumer Confidence Index (CCI) slipped 0.3 percent during October and marks the eighth decline in confidence during the past 12 months. It is now 8.7 percent lower than October 2018. The national Unemployment Rate increased slightly from 3.5 to 3.6 percent for the month. Not only did October job creation easily exceed the 75,000 expected new jobs, figures for both August and September were adjusted up significantly. Wages also rose 0.1 percent during the month for an annual gain of three percent–helping workers earn more money for discretionary purchases, including destination travel.
“For the Southeast, the good news is that room rates increased slightly since last month for a modest uptick in revenues. However, the sharp declines in occupancy during September and October have dragged down aggregated revenues for the winter,” Foley acknowledged. “The dip in revenue in a year-over-year comparison to last year marks the first time in four years that the region has posted a revenue decline at this point in the season. The data suggests that the reason for this uncharacteristic performance is almost certainly due to a decrease in bookings and not because of the modest amount of additional inventory available this winter compared to last year,” he concluded.
*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.
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