Summer travel season upon us

DestiMetrics data shows Winter 16/17 ended as anticipated, with respectable increases in revenues driven by higher rates. However, occupancy was statistically down slightly for the first time since the mid-point in the recession. Anecdotally, NSAA (National Ski Area Association) has reported preliminary skier/boarder visits of slightly less than 55 million, a slight increase over last year and a respectable outcome to a somewhat challenging season for the ski industry.

Summer 17 trends are now coming into focus and is showing overall increases, but the current trends are much like last winter with rate rather than occupancy driving the revenue gains. That pattern is contrary to pre-summer data in recent years, and is noteworthy as a result.

Looking ahead, macroeconomic market forces continue to show mixed signals. Volatile market forces, including geo-politics, an unfamiliar style of US presidential leadership, and inconsistent weather that often causes consumer angst, are all part of the mix. But consumer confidence metrics are up significantly in 2017, so with occupancies remaining flat, we’ll rely on confident consumers to continue driving rate.

Of potential concern, bookings made in April 2016 for arrival in the corresponding months last year, with five of six months declining. Bookings for arrival in April were down a moderate -5.1 percent, while bookings for May were the only increases, up 9.0 percent. This is the second consecutive month that bookings for five of the upcoming six months have declined, perhaps reflecting a shift in volume resulting from higher room rates.

Summer season has been a reliable period of growth in the wake of the recession and has set consecutive occupancy, ADR and revenue records in each of the past four years. Summer 2017 is shaping up to be similar, but with some differences.

While in recent years’ occupancy gains have been very strong heading into summer, this year we see a pattern more akin to winter, with occupancy only slightly up 1.2 percent, and two of six months declining, while rate is strong, with all six months up. But as we look more closely at the data, there are several similarities between summer ’17 and last winter with respect to room nights booked and available inventory.

Absolute room nights booked for the summer are down from this same time last year, declining -0.9 percent, while available inventory is also down, declining -2.1 percent. As with winter, we’re in a position of having an occupancy rate that is up in large part due to less available inventory. In such cases, we need to look for underlying factors such as units being used or sold through other channels (rent-by-owner, or owner / second-home usage), and the impact this inventory decline may be having on the summer rates.

It’s worth noting that over the course of the summer last year, more inventory was made available, so we’ll be watching to see if that happens this year, which may ease rate pressure.

We’ll continue to monitor our lodging occupancies and booking trends as we know occupancies help drive business to our retailers, restaurants, and activity providers. Feel free to contact the VVP with any questions.