Denver, Oct. 16, 2018—Economic momentum triumphed over wildfires and occasionally uncooperative weather to help western mountain lodging shake off Mother Nature’s curve balls and deliver what will almost certainly be the region’s fifth consecutive summer record for both occupancy and revenues—with one more month to go. As of Sept. 30, summer occupancy for the six months from May through October is up two percent compared to the same time last year. The figure includes both actual occupancy for the first five summer months and bookings for the month of October. The monthly data is compiled, analyzed, and reported by Inntopia in their monthly DestiMetrics* Market Briefing. Along with the uptick in occupancy in a year-over-year comparison to the summer of 2017, the Average Daily Rate (ADR) continued its slow but steady upward climb to deliver an aggregated 4.4 percent increase in revenues for the summer months.
Actual occupancy for the month slipped three percent compared to last September but when coupled with a three percent increase in ADR, the month ended essentially flat in revenue with an aggregated 0.3 percent dip. September’s decline had no significant impact on the summer’s net results.
“With one month left to go in the official summer season, we are virtually assured of yet another record for the summer of 2018 based on the number of bookings we have for October,” assured Tom Foley, senior vice president for the Business Intelligence division of Inntopia. “We saw some softening in actual occupancy over the summer months—possibly due to western wildfires, the mid-week timing of the 4th of July holiday this year, and some destinations reaching practical maximum capacity during peak weekends and holidays. However, conscientious rate management by properties is going to deliver yet another record, albeit a rather modest one compared to last year,” he acknowledged.
The monthly Briefing also reported that the booking pace that surged up in August, cooled down during the month of September compared to the same time last year. Bookings made during September for arrivals in the months of September through February were down a sharp 12.5 percent. As of Sept. 30, bookings made in September for arrivals in October were down a dramatic 22.9 percent compared to last year, while January is also showing a significant drop of 20.6 percent.
Key economic indicators continue to play an important role in the strength and continued growth of destination mountain travel. For the fourth consecutive month, the Dow Jones Industrial Average (DJIA) continued its pattern of impressive growth during September and managed to set a new all-time record for the single highest monthly closing with a 1.7 percent increase over August and positioning the DJIA 18 percent higher than the same time last year.
The Consumer Confidence Index (CCI) picked up another 3.7 points during September, pushing it to its highest level since October 2000 and within seven points of its all-time high in May 2000. On the employment front, employers added 134,000 new jobs during September and along with job figures adjusted up for the months of July and August, drove the Unemployment Rate to 3.7 percent and its lowest level since 1969.
“Investor and consumer optimism along with the Federal Reserve Bank raising interest rates for the third time this year in response to the robust health of the overall economy suggests continued economic stability and growth in the coming months,” noted Foley. “Economic strength appears very stable, despite some recent market corrections in early October,” he added.
While the booking pace for the next five months is trending lower than last year at this same time, Foley explained that booking hesitation is pretty typical following a season where snowfall was lower than usual and slope conditions disappointing in many regions of the West. The month of December, with occupancy currently down 8.9 percent, is struggling against both the ‘snow hangover’ from last season and a school holiday calendar that pushes back most school breaks to Dec. 22 making it difficult to capture bookings for earlier in the holiday period.
“As exciting as it is to post another summer record, especially with some challenges delivered by weather and wildfires, all attention is now turning to the upcoming winter season and the most lucrative part of the year for most of our participating destinations,” Foley continued. “Economic strength and consumer confidence play a pivotal role, but ultimately snowfall is the uncontrollable element that will make or break the winter season. So, we’re counting on Mother Nature to deliver the snow and marketing professionals to manage circumstances accordingly,” Foley concluded.