Expectations for a gangbuster finish to the ski season courtesy of widespread and generous snowfall across western mountain destinations over the last six weeks didn’t quite materialize in March. While March did benefit from that snow, the momentum isn’t carrying into April and the hoped-for seasonal recovery is being described as “more like an adequate improvement,” according to DestiMetrics,* the Business Intelligence division of Inntopia, in their monthly Market Briefing. The combination of all that snow and an early Easter holiday compressed a lot of visitors into March arrivals—at the expense of April visitation but improved season-long metrics, albeit moderately. As winter winds down, summer bookings begin ramping up and the data through March 31 provides a snapshot of the upcoming summer.

March was strong

Occupancy was down a scant 0.3 percent compared to last year at this time while the Average Daily Rate (ADR) moved up 4.5 percent. Despite the dip in occupancy, lodging properties banked a four percent increase in aggregated revenues for March—the only positive month for the season.

And four years after the pandemic was declared on March 14, 2020 and mountain resorts closed with half the month remaining, the comparisons, as expected are dramatic. Occupancy was up 114.3 percent, ADR was up 55.9 percent, and revenues for the month of March were up a whopping 234.3 percent compared to March 2020.

Winter occupancy a little better, revenue unchanged, both “okay”

Compared to last season, a record-breaker, occupancy from November through April is down a moderate 3.7 percent compared to last year with declines in all six months—ranging from a slight dip in March to a steep drop in April. Seasonal ADR is up a moderate 2.4 percent but isn’t enough to offset the decline in occupancy and is currently down an aggregated 1.4 percent for the season—virtually unchanged from last month.

For context on how things have changed in four years, seasonal occupancy as of March 31 is up 22.9 percent compared the 2019-20 pandemic that was shortened by four weeks—despite declines in November, February, and April. Daily rates compared to four years ago are up a strong 36.7 percent with impressive gains in all six months and are delivering aggregated seasonal revenues that are 68 percent higher than four years ago.

“What appeared to be a strong turnaround for the season at the end of February didn’t have quite the momentum to carry through to March,” observed Tom Foley, senior vice president for Business Intelligence at Inntopia. “Business in March was very good with the strongest year-over-year rates of the season along with a strong booking pace for March arrivals. And while that strength was enough to stop any downward trends, tepid bookings for April arrivals offset those March gains and we’re essentially where we were at this time last month—fighting occupancy and revenue battles that have been challenging the lodging sector all season.”

Here comes summer

Data for May through September reveals that occupancy is up one percent compared to last summer as of March 31 with gains currently being reported in May, July, and September. Daily rates for the summer are up a modest 2.4 percent with year-over-year gains in all five months ranging from 0.2 percent in September up to a 5.8 percent increase for August. The modest increases in both occupancy and rates are currently resulting in a seasonal increase in revenue of 3.5 percent for the summer.

“When we look at the summer season as of March 31, we see stable numbers that represent manageable business conditions,” continued Foley. This is the normalization of data that started to show up last fall, where ‘normal’ is the absence of noise and extremes in the data. Frankly, it is what the industry needs—a breather from chaos and a chance to operate amid textbook conditions that can be managed without a slide-rule.”

Markets up but consumer reactions mixed

Once again, the Dow Jones Industrial Average (DJIA) rose during the month, up 2.1 percent or 810.98 points to mark its fifth consecutive monthly gain and the fourth consecutive monthly record close. Anticipation of a soft economic recovery from inflationary forces and expectations for interest rate cuts in 2024 is credited with fueling the ongoing investor optimism.

The Consumer Confidence Index (CCI) experienced a miniscule slip, down 0.1 percent to 104.7 points as consumers were divided in their assessment of short- and long-term conditions with short-term expectations for the economy improving slightly. In contrast the Consumer Sentiment Index (CSI) from the University of Michigan edged up to 79.4 points to reach its highest level since July 2021. An easing of concerns about high prices bolstered some consumers while strong financial markets were cited as a cause for optimism among higher income groups.

The National Unemployment Rate ticked down to 3.8 percent as employers added a stronger-than-expected 303,000 new jobs in March and has remained steady between 3.7 and 3.9 percent since last August. Health care and government positions made the biggest jumps during the month but the Leisure and Hospitality sector finally reached pre-pandemic 2020 levels with the addition of 49,000 new jobs—including 3,200 positions in the Accommodations sub-sector.

Data from the Consumer Price Index (CPI) revealed that the National Inflation Rate rose to 3.5 percent in March, up from 3.2 percent in February and was considerably higher than most analysts’ expectations. As inflation rose, consumer prices also went up with housing and energy the primary culprits. Balancing the equation, hourly wages are up 4.1 percent year-over-year which is higher than the inflation rate and is keeping consumers ahead of the rising prices for the 11^thconsecutive month. The higher prices and persistent inflation are likely to defer any cuts to interest rates in the near future and will keep credit purchases more expensive—potentially leading to lower consumer confidence and reduced discretionary spending—including travel.

“Consistent snowfall carried March across most of the West but the overall impact on the season was marginal,” observed Foley. “And while it sounds a bit discouraging, the season will actually finish much stronger than expected or feared last fall. It is something of an accomplishment by lodging properties to be down only slightly this season as they struggled with late snow and rate-resistant guests compared to last year’s record-breaking season when there was consistent and widespread snowfall along with rate-tolerant visitors,” 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.