Western Mountain Destinations Dropping in Year-Over-Year Comparisons; Month-Over-Month Shows More Realistic View

Overall seasonal occupancy held steady during December from where it was a month ago but remains dramatically below where it was a year ago. The most recent results for 18 mountain destinations representing more than 30,000 rooms were aggregated and summarized by DestiMetrics,* the business intelligence division of Inntopia, in their most recent monthly Market Briefing. The data includes the most updated information on occupancy, daily rates, and revenues through Dec. 31and the holiday season.

December 2020 results

In a year-over-year comparison, the month of December was down 18.6 percent in actual occupancy, the ADR dropped 10.6 percent, and revenues finished an aggregated 27.2 percent lower than last year. However, when compared to one month ago, a more relevant indicator of how mountain resorts are doing in this chaotic season, actual occupancy was virtually flat compared to November 2020 despite the worsening pandemic. Most arrivals that helped buoy up occupancy during the month were concentrated between Dec. 19 through Dec. 31 but there was also strength in the week beginning Dec. 12. In the month-over-month contrast, ADR slipped from November—which was down just 3.4 that month to the 10.6 decrease experienced in December.

Full winter perspective

For the six-month season from November through April, aggregated occupancy is down a sharp 33.1 percent compared to last winter at this time. In contrast, ADR is down only a moderate 5.6 percent with rates up in three of the six months led by November and April—both up 22 percent, and a scant increase of 0.1 percent on-the-books for March. Despite those three upticks in rates, the depressed occupancy and overall rate decline is resulting in a dramatic 36.9 percent decrease in winter revenues.

“Although discussions about improvements or declines seem absurd in this time of extreme performance numbers, when looking at the entire winter, occupancy levels edged up slightly from where they were in November but room rates dipped in the effort to capture more visitors,” commented Tom Foley, senior vice president for Business Operations and Analytics for Inntopia.  “So not surprisingly, seasonal revenues are taking some serious hits this year.”

Booking pace during December

Bookings made in December for arrivals in the months of December through May are down 23.3 percent compared to this same time last year. This is the second consecutive month without any year-over-year gains in the booking pace for any of the next six months. What continued to emerge is the trend toward shorter-lead bookings. Bookings for arrivals 0-90 days in advance rose sharply while bookings for arrivals 91-180 days in advance cooled slightly and were essentially flat compared to where they were one month ago.

“One positive note we detected in December was that the lodging transactions booked during December for all arrival dates were some of the highest numbers recorded since mid-summer,” Foley continued. “Plus, following the last-minute booking trends we’ve been tracking, bookings made between Christmas and New Year’s for arrivals in late December and early January were the highest we’ve seen since February 2020. But unfortunately, when we do our year-over-year comparisons, those absolute numbers don’t hold up against the robust booking pattern we saw last year at this time—and that has contributed to the negative pacing figures.”

Economic measurements

Market indicators during the month were mixed as the Dow Jones Industrial Average (DJIA) soared to new record highs, unemployment remained unchanged, but consumer confidence decreased sharply as the high-flying results in markets and some consumer portfolios was not closely aligned with the realities of the average consumer. The Dow was up 1.7 percent from November and posted its highest monthly finish ever—30,409.6 points.  This strong performance is in defiance of the discouraging unemployment figures, rapidly rising cases of COVID-19, and an unexpectedly slow and inefficient rollout of the widely anticipated vaccines.

And while the Unemployment Rate remained unchanged from last month at 6.7 percent, it does not reflect the four million workers who have dropped out of the workforce this year. While the construction and manufacturing sectors added 250,000 jobs during December, for the first time since April, overall jobs declined—down 144,000 for the month. Bars and restaurants, theme parks, casinos, outdoor recreation, and the hotel industry took the biggest hits during December, victims of the ongoing and uncontrolled pandemic.

The negative job news sent the Consumer Confidence Index (CCI) down once again—another 4.6 percent in December to 88.6 points and the fourth time since April it has dipped below the 90-point threshold.

“Consumers were very pessimistic about current conditions in response to the alarming surge in COVID-19 cases and deaths but remain optimistic about future expectations driven, at least in part, by the approval of vaccines and the first round of inoculations,” added Foley.

Other considerations  

Incremental fill, the change in occupancy levels from one period to the next, continues to reflect consumers’ reaction to rapidly changing news about the pandemic, vaccine availability, local restrictions in mountain communities, snow conditions, and as of December, reduced rates to entice visitors. As of Dec. 31, shorter-lead bookings gave a 6.2 percent increase to December’s occupancy compared to Nov. 30 while January got a 9.2 percent occupancy boost.

“The first full month of operations are now behind us at mountain resorts with mixed results,” summarized Foley. “It seems that in this pandemic-dominated year with all its upheavals, uncertainties, and anxiety about destination travel, holding relatively steady should be considered something of a victory. But overall conditions remain highly volatile on all fronts including COVID-19 management, economic instability, regional snow challenges, and social unrest that could easily discourage already cautious consumers,” he concluded.

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*DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks lodging performance in resort destinations. They compile forward-looking reservation data each month and provide individualized and aggregated results to subscribers at participating resorts. Data for western resorts is derived from a sample of approximately 290 property management companies in 18 mountain destination communities, representing approximately 30,000 rooms across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho and may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.