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Winter Showing Signs of Rebound in Southeast Resort Destinations; Still Lagging Behind Last Year
Business Intelligence News Destinations Hospitality
 

 

DENVER, COLO., Oct. 22, 2019—September’s booking pace improved overall performance at participating Southeast properties for the winter season, but having started the season in negative territory at the beginning of the season, there is still some ground to recover. The notable shift in lodging patterns was reported yesterday in the DestiMetrics Market Briefing by Inntopia, a report that encompasses nine Southeast destinations in five states.*

For the month of September, the first month of the Southeast region’s winter season, actual occupancy as of Sept. 30 was down a significant 10.7 percent compared to last September. The Average Daily Rate (ADR) for the month was essentially flat, up only 0.1 percent.  The net result was a dramatic aggregated 10.6 percent decline in revenue for the month.

In contrast to the dismal results for September, the booking pace in September was more optimistic. Bookings made in September for arrivals in September through February are up 7.3 percent as of Sept. 30 compared to the same time last year. Although January and February bookings made during the month dipped down 6.1 percent and 4.7 percent respectively compared to last year, bookings made in September for the month of December are up a whopping 44.5 percent compared to this same time last year. Even October got in on the September surge with a 20.6 percent increase in occupancy in a year-over-year comparison.

The reality of this burst in bookings is a bit more muddled.  Overall occupancy for the 2019-20 winter season (September through February) is still down 1.8 percent compared to last year at this time. ADR improved this month, up 1.4 percent compared to the same time last year, and the sum of these relatively flat figures is an 0.4 percent decline in revenues for the full winter.

“The Southeast region started the winter season somewhat behind the previous four years that we’ve been tracking their data, but the strength in winter bookings during the past few weeks illustrates the resiliency and potential for the region,” said Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “That said, it is still pretty early in the season with insufficient volume at this time to confirm that these gains in occupancy for every month from November through February will be sustained as the season progresses.”

Named storms and the subsequent news reporting about them can have a significant impact on bookings, and the region has had a relatively quiet season this year. But economic conditions also play a significant role. Economic and political news continued to roil the markets and consumer confidence during September. The Dow Jones Industrial Average (DJIA) edged up a slight 1.4 percent for the fourth monthly increase in the past six months. However, the DJIA is only 1.7 percent higher than it was last September with dramatic daily and monthly swings continuing as the norm.

“Investors remain concerned about U.S. foreign trade policy, Brexit, the volatile U.S. and China trade relationship, the domestic political environment, and more recently, a sharply slowing European economy,” assessed Foley. “This uncertainty in financial marketplaces can undermine consumer and employer confidence, both of which have a direct impact on the destination travel market.”

And while the Consumer Confidence Index (CCI) stabilized in August, it dropped a significant 6.8 percent during September and finished the month 7.5 percent lower than it was in September 2018. The national Unemployment Rate dipped from 3.7 percent in August to 3.5 percent in September for the first decline since April. Adding to economic anxiety, employers again missed analysts’ expectations by adding only 130,000 new jobs instead of the expected 145,000. Despite unemployment at, or near, all-time record lows, the pace of job creation continues to slow as employers are exhibiting caution in the face of continued economic uncertainties.

“Unfortunately, the year-over-year trend of declining occupancy that first appeared in June has continued to persist and left the month of September with disappointing results,” Foley acknowledged. “On the bright side, the September surge in bookings for arrivals in September through December improved the overall winter picture, but there are also lingering concerns about how the coming months are shaping up compared to the past four years. The high-volume months of January and February, and to a lesser extent, the month of October, offer the potential for regaining some lost ground. However, the underperformance of September will be tough to overcome in the overall winter results,” 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.

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