News Summer Results Outpace Economy in Southeast: Winter Off to Slow Start

DENVER, COLO., Sept. 23, 2019— As expected, Southeast lodging properties in five southern states wrapped up the summer season in August with aggregated increases in both occupancy and revenues. However, the healthy pattern that prevailed throughout the summer months cooled off significantly for the first months of the upcoming winter season. The notable shift in lodging patterns was released Friday in DestiMetrics* Market Briefing by Inntopia.

The summer concluded with solid figures for August with occupancy up 0.8 percent compared to last August and the Average Daily Rate (ADR) up 2.8 percent. The combination of increased occupancy and rate delivered a 3.6 percent increase in aggregated revenues across nine participating resort destinations. For the full six-month summer period from March through August, in a year-over-year comparison to Summer 2018, occupancy finished up 3.6 percent and ADR was up 2.2 percent. The steady growth delivered a healthy 5.9 percent increase in revenues for the summer.

“Once again, the summer was a solid win for the southeast region and among our participating properties,” assured Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “Further illustrating the successful season were the final summer results that revealed that aggregated figures for the Southeast outpaced the greater domestic economy.”

However, the winter picture is showing a distinctly different pattern, particularly for the first few months of the winter season (September through February). Although bookings made in August for the months ahead only slipped a slight 0.1 percent compared to the same time last year, overall winter occupancy is down 3.6 percent compared to the same time last year. Declines are showing up in four the six months and rates are virtually flat. Occupancy is currently down 12 percent for September while October is down 9.4 percent. Both months have been trending down since May when this decline first appeared. November and December are also down slightly, but January and February are showing modest increases. Winter revenues are also down 3.6 percent.

The dynamic and variable news in the economic sector continued to be influenced by national and global political turmoil. As of Aug. 31, the Dow Jones Industrial Average (DJIA) finished the month down a considerable 2.8 percent compared to last month’s rally and record-high finish. This is the fifth decline in the past 10 months and continues to illustrate the seesaw nature of the Index as investors respond to rapidly changing circumstances. The closely-watched DJIA is two percent higher than the same time last year.

“This month-over-month comparison reflects a dramatic slowdown in the pace of market growth over the preceding 18 months,” reported Foley.

In contrast, the Consumer Confidence Index (CCI) which has also fluctuated widely in the past several months, settled down in August and declined only a slight 0.5 percent to finish the month a scant 0.3 percent ahead of August 2018. The national Unemployment Rate also showed stability and remained unchanged at 3.7 percent. Although employers missed analysts’ expectations by adding only 130,000 new jobs, worker’s wages did increase during the month.

“As of Aug. 31, the upcoming winter months are looking dramatically different than they did at this time last year—particularly September and October which have both been down appreciably for several months and there is little time left for a rebound now,” Foley explained. “Fortunately, bookings made in August for the latter part of the winter are looking more promising since December bookings jumped 26.2 percent and January bookings made in August are up a whopping 64.6 percent compared to the same time last year. Still, both occupancy and revenues are down for the six winter months and may require some strategic rate management by lodging properties to attract guests in the next few months,” 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.