Although wildfires and smoke plagued many western states in July and August, as of Aug. 31, there has been very little negative impact on western mountain destinations. The most recent data released by Inntopia in their monthly DestiMetrics* Market Briefing showed that aggregated occupancy for the summer season from May through October is up 2.9 percent compared to last summer as of this same time (Aug. 31), while the Average Daily Rate (ADR) crept up 1.7 percent. The combined upticks in occupancy and ADR boosted aggregated summer revenues 4.6 percent compared to Summer 2017.
Actual occupancy during August enjoyed a moderate 3.9 percent boost compared to last August while the ADR eked out a 1.1 percent gain to deliver a 5.1 percent increase in aggregated revenue in a year-over-year comparison to last August.
“For the second consecutive month, we are seeing notable differences between our participating properties with half reporting year-over-year increases in occupancy and ADR while half of them are experiencing declines compared to last summer,” explained Jeremy Dreiling, production manager for the Business Intelligence division of Inntopia. “The aggressive year-over-year revenue growth that we saw each summer from 2013 through 2016 seems to be waning, and even though we are still experiencing year-over-year increases, that double-digit growth has cooled in the past two summers with only modest growth. This is the first summer that occupancy will come close to, or match, winter occupancy figures and some destinations are now reaching maximum capacity although that is not true of every region,” he continued.
The booking pace for the next six months picked up notably during August with arrivals from August through January up 11.5 percent compared to the same time last year. August bookings for arrival within the month jumped 15.5 percent compared to last year while the next five months were mixed with slight declines in October and December while September and November nudged up. January bookings increased a dramatic 49.5 percent compared to the same time last year although at this point in the year, the actual number of bookings are relatively low.
DestiMetrics also tracks key economic indexes each month and summarizes how they could influence and shape discretionary consumer spending—including recreational travel. The Dow Jones Industrial Average (DJIA) moved up another 2.4 percent in August for the fifth increase in the DJIA since the start of 2018 and brought it within 185 points of the all-time high in January. August also marked the longest bull market streak without a major correction in 60 years. Analysts credit strong economic figures and earnings that have piqued the interest of investors.
The Consumer Confidence Index (CCI) gained six points in July, bringing it to 133.4 points and its peak level in 2018 and its highest measurement since October 2000. The recent surge in confidence is being attributed to consumers reacting positively to the re-negotiation of a new trade agreement with Mexico and optimism for a similar agreement with Canada.
“These historically high confidence levels have analysts predicting that consumer spending will continue its healthy upward trend through 2018 and will continue to foster stable economic growth,” Dreiling added.
The Unemployment Rate remained unchanged at 3.9 percent during August despite 201,000 new jobs being added during the month and exceeding analysts’ expectations of 192,000. Nearly a quarter of those new positions were in business and professional services—a sector that pays relatively well. These well-paying jobs nudged hourly earnings up .04 percent over last month and the monthly Briefing reports that these higher wage positions contribute to a larger middle-class with increased discretionary spending ability.
“It has been a balanced summer performance thus far and the opportunity to reach a seventh consecutive summer record is well within reach,” said Dreiling. “Summer visitors are continuing to increase each year and we will be watching closely to see what happens to rates and revenues at these western mountain destinations as summer occupancy gets ever-closer to matching winter and ‘high season’ figures,” he concluded.
*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 20 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.