BRADENTON, Fla., Jan. 17, 2019— For the winter months of September through February, participating lodging properties in five southeastern states are showing impressive year-over-year growth in both lodging and revenues compared to last winter. According to Destimetrics* monthly Market Briefing released yesterday by Inntopia, aggregated actual occupancy for nine Southeast tourist destinations in Florida, Alabama, Georgia, South Carolina, and Virginia was up 22.5 percent for the month of December alone compared to the same month last year as of Dec. 31. While the Average Daily Rate (ADR) dipped 5.9 percent in a year-over-year comparison to last December, the surge in occupancy for the month delivered a very strong 18.2 percent increase in revenues for the month.
The strength of December is not isolated as the full winter is showing sustained growth over last winter. For the full six-month period from September through February, aggregated occupancy is still posting gains in all six winter months as of Dec. 31 with a 13.8 percent increase ahead of last winter. The ADR for the winter months edged up 2.1 percent and continues to show rate increases in five of the six winter months. The growth in both occupancy and ADR is resulting in a 16.2 percent increase in aggregated winter revenues.
“Although the trend for steady winter growth in occupancy and revenues at Southeast destinations is real and has been tracking consistently for several years, this month’s report comes with an important caveat,” explained Tom Foley, senior vice president of Business Operations and Analytics for Inntopia. “The damage wreaked by Hurricane Michael along the Florida Panhandle resulted in different availability and usage of rental units. Although the storm damage was relatively localized, the amount of inventory in that region is significant enough to impact the aggregated data this month as it did in November as well,” he continued.
The Briefing went into additional detail about the complexity of this month’s regional assessment due to the hurricane’s impact on one particular region—the Florida Panhandle. “A large number of units were either damaged by the storm, were utilized for long-term rentals to house displaced families and clean-up personnel, or were located in settings that suffered significant local infrastructure and attractions damage and therefore were undesirable in the short term for destination rentals,” clarified Foley
Despite the challenges of differences among the various regions in recent months, overall bookings made in December for arrivals in December through May also ramped up an impressive 35.4 percent compared to the same time last year.
“The changes in December were the most dramatic as there were an additional 16,570 room nights made available during the month as inventory came back on the rental market. But while that 3.8 percent increase in inventory would normally suppress occupancy gains, booking gains for the month were considerable, with almost 35,000 room nights sold—a 31.5 percent increase that helped push December occupancy gains to the levels we saw,” explained Foley.
Key economic indicators during December were mixed. The Dow Jones Industrial Average (DJIA) had a chaotic month with wild swings up and down spanning more than 6,400 points from the month’s highest to lowest points. The DJIA closed on Dec. 31 down 8.5 percent from November’s closing and 12.3 percent below its record monthly close in September. It also marks the Index’s lowest closing since September 2017.
“Investors were increasingly concerned about international trade wars, particularly with China and the U.S. government shutting down prior to the arrival of a new Congress, and those concerns contributed to the instability,” explained Foley. “All domestic and foreign marketplaces were also unpredictable and some wariness is beginning to show up in consumer confidence which could, in turn, impact the summer destination travel market,” he cautioned.
Consumer confidence dropped 8.3 points in December for the second consecutive month and is its fifth decline in 2018. Despite the dip, the Consumer Confidence Index (CCI) remains 4.9 percent higher than at the same time last year. Employers added an impressive 312,000 jobs in December to far exceed expectations for year-over-year growth. Wages also rose during December to finish 2018 with a strong job market and a 3.2 increase in earnings growth. Conversely, the Unemployment Rate moved up from 3.7 percent to 3.9 percent as 400,000 potential workers re-engaged in their job search.
“This is the strongest year for the job market since 2015 and currently appears to be the most stable element on the economic landscape,” observed Foley.
“This has been a very dynamic winter season for the Southeast with a lot of moving parts, but what we can say definitively is that as a whole, the region is moving in a steadily upward trajectory and that the winter or traditionally ‘slow’ season is growing and maturing and becoming more year-round,” confirmed Foley. “Looking forward, we see that much of the storm recovery has been completed and we expect to see more normal inventory levels that should lead to more typical booking and usage patterns in the months ahead,” 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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