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17 Western Mountain Destinations Across Seven States are Reporting Stable Rates That are Delivering Steady Growth
After daily rates edged down slightly during May due to ongoing price-sensitivity from consumers, summer occupancy continued to tick up during June as those lower rates continued--and enticed consumers to book. The stabilization of rates reflects lodging properties adjustments to consumer pricing concerns and after four years of mercurial pandemic and post-pandemic travel upheaval, the most recent patterns reveal a more typical supply and demand dynamic for mountain properties and their visitors. The latest occupancy, booking, and rate trends were released yesterday by DestiMetrics,* the Business Intelligence division of Inntopia, in their monthly Market Briefing.
June moved up
Building on momentum that started in May, actual occupancy for the month of June was up three percent in a year-over-year comparison to last June. The Average Daily Rate (ADR) for the month was up 3.3 percent and the combination of increases in both categories led to a 6.4 percent increase in aggregated revenues for the month.
Summer continuing upward trend
As of June 30, occupancy for the summer season from May through October is up five percent in a year-over-year comparison to last year at this time—and up an additional 1.2 percent from one month ago. Occupancy gains continue to appear in every month but October. With an ADR of $401, rates are up 2.1 percent compared to last summer with increases in all six months. Rates are down somewhat from the aggregated 4.3 percent increases that were being advertised at the end of April and that modest dip in rates is being credited with the rise in occupancy. That combination is delivering a 7.3 percent increase in summer revenues.
“Bookings during June were reliable and widespread although not quite as strong as they were during May,” explained Tom Foley, senior vice president for Business Intelligence at Inntopia. “Rates seem to have settled into a range that is comfortable for consumers and are staying within a few basis points of inflation,” he continued. After a few pretty zany years courtesy of the pandemic, the immediate aftermath, and then soaring inflation, we are now seeing the mountain product and strategic pricing as the force driving consumers to book.”
Economic indicators mostly stable in June
The National Inflation Rate declined for the third consecutive month in June for arguably the most consequential Consumer Price Index (CPI) report so far this year. Inflation dropped from 3.3 to three percent in June and exceeded the expectations of analysts. And while prices remained high, they did come down 0.1 percent from May including items such as gasoline, electricity, fruits and vegetables, as well as cereals and cereal-based products. “For destination travel suppliers, the five percent decline in airfares during June, combined with lower gasoline prices also make it more affordable for travelers to get to their destination,” observed Foley.
The Dow Jones Industrial Average (DJIA) moved up slightly in June by adding 432.54 points or 1.1 percent from the end of May. This is the second consecutive monthly increase and the eighth month in the past year that the Index has posted an increase. The relatively calm month posted only minor daily swings and finished with 11 days up and eight days down. The DJIA is down 1.7 percent from its most recent monthly high back in May but it is up an impressive 14.6 percent over last June and a whopping 27.1 percent from June 2022.
The Consumer Confidence Index (CCI) and the Consumer Sentiment Index (CSI) both dipped slightly in June. The CCI was down less than one point to hit 100.4 points and slightly below its 24-month average of 104.3 points. Consumers remain mixed in their thoughts about the economy with a more optimistic view of short-term prospects but a deepening concern about the longer-term situation for jobs and wages. Despite easing prices, inflation continues to be a dominant factor in their assessment. The University of Michigan’s CSI was also down 0.9 points in June to 68.2 points with survey respondents sharing the same concerns about inflation as well as the long-term impact on personal finances.
“Travel intentions remain up for consumers but until both of these indices are posting consistently higher numbers, pricing power will remain with consumers,” Foley noted.
For the third consecutive month, the National Unemployment Rate ticked up during June, to 4.1 percent and its highest level since November 2021. Job creation pulled back slightly from last month but was still higher than expected with 206,000 new jobs added to payrolls. The uptick was unexpected and the slowing of wage growth to only 0.3 percent in June after a 4.1 percent gain in May was also noted. “However, although wages are slowing, they are up 3.9 percent over last year at this time and are remaining ahead of the three percent inflation rate,” Foley reported.
The real numbers…and where they are headed
- Summer occupancy continued to improve markedly particularly the month of August which is now up 8.2 percent compared to last year at this time…and appreciably better from where it was at the end of May when it was up only five percent. Overall, occupancy for the entire summer is now up five percent in a year-over-year comparison.
- Room Nights Available for rent has varied considerably through the pandemic and post-pandemic period and the number of available rooms/units impacts both occupancy and rate figures. During the pandemic, rooms were taken out of the rental pool but in the past 18 months the amount of inventory has gradually started coming back up but still remains down sharply from pre-pandemic number. The summer of 2024 is down 155,379 available room nights compared to the summer of 2019.
- Booking pace has slipped but still remains strong and was up a strong 13.6 percent compared to last June but notably down from May’s exceptionally robust pace of up 26.5 percent compared to the previous May. In real numbers, 151,976 room nights were booked in the month of July for arrivals in July through November—up 20,089 rooms from last June.
- Revenue strength continues to be fueled by the higher occupancy this summer. The booking pace in June represents an aggregated $59.1 million in new summer revenue—approximately $10.1 million more than was booked in June 2023, and total summer revenue is currently 434.1 million, up $29.2 million from this same time last year.
- Lead-time for bookings are remaining extended. In the first six months of 2019, the lead-time from booking date to arrival date was just over 43 days. During the pandemic, those lead-times rocketed up as much as 120 days as people deferred travel due to infection concerns. By 2021, those advance bookings had shrunk back to 51 days but have now crept back to 52.6 days—22 percent further in advance than before the pandemic.
“Occupancy shot up in leaps and bounds last month as room rates found, and held, a price point that was comfortable for consumers,” offered Foley. “Finding that delicate balance has strengthened overall occupancy while solidifying revenue for lodging properties,” he continued. “With aggregated rates well below the national inflation rate and earnings, travel to mountain destinations has become a more appealing prospect for consumers weary of continued price hikes. Lodging properties have recognized that fatigue and have been tweaking rates to encourage more bookings….and it is definitely working,” he concluded.
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*DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks lodging performance in resort destinations. Each month, the forward-looking reservation data is compiled and aggregated with individualized results for each region and distributed monthly to subscribers at participating resorts. Approximately 28,000 lodging units in 17 mountain destination communities across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho contribute to the data pool, and represent an aggregated 55 percent of all available rental units in those regions. Results may vary significantly among/between resorts and participating properties.
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Organization Name : Inntopia