With only one month remaining in what has been a bleak summer for lodging at western mountain resorts, the focus is now shifting to the upcoming winter and how destinations will adapt to a radically different ski and snowboard season. Despite an overall tough summer, bookings and rates in the past few weeks have showed an appreciable uptick, helping to record early on-the-books revenue gains for the upcoming months of October and November—the first revenue gains since last February. The most recent results aggregated from destinations in seven western states was released yesterday by DestiMetrics* in their monthly Market Briefing from Inntopia and includes data collected from 18 destinations and more than 30,000 rooms. Results include data through Sept. 30.
Once again, short-lead bookings helped drive business for in-month arrivals. Bookings made in September for arrival in September were up a whopping 69.6 percent compared to the same time last year. Although the result in actual occupancy for September is a decline of 14.8 percent compared to last September, that is a stark improvement since the Aug. 31 report. Conversely, the Average Daily Rate (ADR) rose 13.7 percent in a year-over-year comparison. The increased room rates allowed properties to experience only a modest three percent decline in revenue compared to last September—evidence of continued gradual recovery.
With one month to go, the full summer is going to finish down significantly compared to the previous six years but bookings made in September for October are up 80.2 percent allowing some opportunity for additional recovery. As of Sept. 30, summer season occupancy is down a substantial 33.5 percent. However, ADR is up a solid 8.7 percent with the largest rate gains in September and October. But that rate strength falls far short of offsetting the huge occupancy losses at the beginning of the summer, leaving seasonal revenues down 28.1 percent compared to last summer.
“Tough as this summer has been, we are finally seeing some ‘wins’ with this month’s data,” observed Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “This is the first month since the pandemic started that we have seen year-over-year gains in revenue with modest improvements for both October and November. The other bright spot is that we are continuing to see what we call ‘incremental fill,’ mainly resulting from short-lead bookings that help boost occupancy figures for a month.”
A View to Winter
As the winter booking season moves into its typically busier time, the cautious short-lead summer patterns continue to mostly persist. And even though the lead times for winter bookings are starting to push out a bit further, aggregated occupancy on-the-books for arrivals in November through March is down a sharp 33.9 percent compared to the same time period last year with declines in all five months. ADR is also showing a dip, down 4.8 percent compared to last winter. The combination of lower occupancy and rates is leading to a sharp 37 percent decline in revenue on-the-books for the upcoming winter.
“With a strong booking pace, short-term occupancy fill, and a couple of months of revenue gains in the months ahead, the mountain travel industry is starting to see positive signs that policy, pricing, and messaging are combining to attract consumers to overnight visits,” continued Foley. “And, now that most ski companies have announced their operating plans for the coming season, consumers are exhibiting slightly more confidence in making bookings and tolerating rate increases.”
Along with other societal dynamics, economic indicators are expected to have an influence on travel decisions made by consumers in the months ahead. In September, he Dow Jones Industrial Average (DJIA) was volatile throughout the month and finished down 2.3 percent marking the first decline in the Index since the steep plunges last February and March. However, it still remains 3.2 percent higher than it was last September. In contrast, the Consumer Confidence Index (CCI) reflected rising consumer optimism by adding 15.5 points to take it over the 100-point threshold (101.8) for the first time since March. The national Unemployment Rate dropped to 7.9 percent (down from 8.4 percent in August) to bring it to its lowest levels since March when it was 4.4 percent. However, employers added only 661,000 new jobs in September which was considerably below expectations. Overall, the U.S. economy has only recovered slightly more than half of the 22 million jobs lost in the immediate wake of the pandemic declaration in mid-March.
“As the gradual recovery to destination travel continues, concerns surrounding COVID-19, economic realities, the looming and contentious election, and the ever-present uncertainty of snowfall remain critical to how this unprecedented ski season will evolve,” cautioned Foley. “Booking patterns remain far from normal and can vary widely and abruptly so it is still much too early to make reliable predictions about how this season unfolds,” he concluded.