News Summer Rates Soften; Bookings Get Stronger at South Destinations

BRADENTON, Fla., April 17, 2019 — The Average Daily Rate (ADR) has softened during the past month at Southeast destinations and the lower rates are helping to drive increasingly rate-sensitive consumers to make bookings at participating lodging properties. The findings were released in the most recent DestiMetrics* Market Briefing by Inntopia and revealed that actual occupancy for the month of March, as of March 31, was up eight percent compared to last March. Along with the spike in occupancy came a 1.3 percent dip in the ADR. Despite the slip in rate, the stronger occupancy delivered a 6.7 percent increase in revenue for the month.

The full six-month summer period from March through August is also ticking up. In a year-over-year comparison to last year at this time, summer occupancy is up 5.8 percent with increases in five of the six months. June is the only month showing a decline and that is a scant 0.1 percent. ADR is up 0.6 percent for the summer and when coupled with the growth in occupancy, is showing a 6.4 percent increase in revenues. Revenue is showing increases in every month, led by May which is up by a stout 9.9 percent.

“The economic picture has gotten a little fuzzier in recent months and consumer confidence is pulling back a bit so daily rates are going to play a key role in how summer bookings develop,” cautioned Tom Foley, senior vice president for Business Operations and Analytics for Inntopia.

Economic indicators during March showed some wavering, but still remained robust and conducive to consumer spending. The Dow Jones Industrial Average (DJIA) dipped 0.6 percent from its February closing and despite the slight decline, remained 7.2 percent higher than at the end of March 2018. Consumers expressed caution during March as the  Consumer Confidence Index (CCI) dropped a sharp 5.6 percent during March to mark the fourth decline in the CCI in the past five months. However, at 124.1 points, the Index remains strong and the decline suggests ebbing confidence in the economy’s long-term outlook. The national Unemployment Rate remained unchanged in March at 3.8 percent as employers exceeded expectations and added 196,000 new jobs while simultaneously sustaining good wage growth. The upsurge represents a strong rebound from a weak February when only 33,000 new jobs became available.

Evidence of consumer response to lowering rates was apparent in the March booking pace that was up a dramatic 25.5 percent compared to bookings made in March 2018 for summer arrivals. Bookings are up in every summer month with increases ranging from a 15.1 percent jump in July arrivals to a whopping 42.1 percent increase in April arrivals.

“Although it is still very early in the summer season, the current picture is promising as strategic rate management is launching the summer with a robust booking pace,” explained Foley. “Better timing for the 4^th of July holiday this year could also provide a boost in July visits, but the apparent cooling of the domestic economy is going to require close monitoring in the coming months and the flexibility to adjust rates as needed to keep visitors booking,” he concluded.

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*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.