News Strong Daily Rates Driving Winter Revenue at Southeast Destinations

While seasonal occupancy continued to increase slightly from where it stood at the end of October, the real story for participating resort destinations in Florida, Georgia, and South Carolina this month was the impressive increases in daily room rates. Despite the twin challenges of a worsening global pandemic and some negative economic indicators, all six winter months are posting rate increases from September through February according to data released by DestiMetrics,* a division of Inntopia, in their monthly Market Briefing.  Aggregated results include updated information on occupancy, rate, and revenues through Nov. 30.

For the month of November, actual occupancy slipped 4.4 percent compared to last November but in sharp contrast, the Average Daily Rate (ADR) was up a solid 12.4 percent and delivered a comfortable 7.4 percent increase in revenues for the month.

Bookings made during the month of November for the remainder of the winter months and into early summer continued at the robust pace of previous months, particularly for very short-lead reservations. November bookings for arrival in that month were up a dramatic 56.2 percent in a year-over-year comparison to last year. December was the only month showing some wobble, down 4.6 percent while the subsequent three months were showing monthly increases ranging from 0.4 to 69.5 percent compared to the same time last year, though with relatively low booking volume.

“Consumers are clearly weary of waiting and are eager to travel to the Southeast despite alarming increases in both the number of new COVID-19 infections and deaths,” observed Tom Foley, senior vice president of Business Analytics for Inntopia. “That commitment to travel is showing up in consumer acceptance of the steady rise in room rates that we’ve been seeing for the past several months, even though there are some economic headwinds blowing along with public health concerns.”

As of Nov. 30, the full winter season for participating Southeast destinations illustrates a promising picture. Aggregated occupancy for the six-month period is up 3.6 percent compared to last year at this time led by the dramatic surge in September of 36.8 percent with moderate fluctuations during the next four months. However, as in other regions of the country, occupancy is weakening as the season progresses with the winter currently culminating in February with a significant 30.1 percent decline in on-the-books occupancy during that month. Aggregated ADR for the six months is up a notable 22.1 percent and when combined with the overall slight increases in occupancy, is providing a striking 26.5 percent increase in revenue compared to last year.

That dramatic drop in occupancy for February, the last month of the winter season, is being attributed to the sharp reduction in the number of seasonal snowbirds from Canada. That segment of the market is not expected to recover this year due to the pandemic and lodging properties may have difficulty replacing that substantial number of visitors during February.

Economic measurements

Key economic indicators were mixed as the pandemic drags on. As of Nov. 30, the Dow Jones Industrial Average (DJIA) surged ahead a dramatic 12.9 percent from October and delivered the highest monthly close in the Index’s history. This reversal from the losses in September and October was primarily driven by investor enthusiasm about the positive COVID-19 vaccine news.

“Although strong financial markets can typically be expected to buoy destination travel, ongoing health concerns along with localized restrictions in some destinations are likely to dampen positive feelings resulting from the Dow Jones’ big November finish,” cautioned Foley.

The Consumer Confidence Index (CCI) dropped a considerable 5.2 percent in November to take it to 96.1 points and the first time it has dropped below the significant 100-point benchmark since August. The national Unemployment Rate dipped from 6.9 to 6.7 percent but reflects the fact that 400,000 workers stopped their job search, removing them from unemployment calculations. Although 245,000 new jobs were added in November, it is the fifth consecutive month that job creation has slipped from the previous month and illustrates a stall in employment recovery. Most critically, 9.2 million workers remain unemployed since the onset of the pandemic.

First Look at Summer

A first look at data for March and the first month of the Southeast’s summer season reveals that occupancy on-the-books for that month is up a whopping 69.5 percent in a year-over-year comparison, suggesting an exceptionally encouraging start to the season as of Nov. 30.

“After a small hiccup in October, occupancy increased slightly during November with short-lead arrivals for November and longer-lead arrivals for January and February dominating the booking pace,” Foley continued.  “That tendency to book 45 days or less before arrival is a trend we are seeing throughout the travel industry as consumers remain cautious about long-term commitments as the pandemic and economic uncertainty continue to have a strong influence on travel plans,” 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 five resort destinations in three states including South Carolina, Georgia, and Florida.