Nov. 13, 2024 — As expected, lodging properties that participate in DestiMetrics* monthly data collection finalized their summer season with modest year-over-year increases in occupancy, daily rates, and aggregated revenue. But the focus of this month’s Monthly Market Briefing from the Business Intelligence division of Stowe-based Inntopia was primarily the winter forecast for the 17 mountain destinations across seven western U.S. states as the full winter ski season data is now available. In these early days, the pace and patterns are mostly steady and consistent with last summer and the previous winter, but some headwinds are blowing that could have a little, or a lot, of impact on winter visitation.

October wrapped up a good summer

For the month of October, occupancy edged up 1.2 percent, the Average Daily Rate (ADR) was up 3.2 percent, and the combination delivered a 4.2 percent gain in aggregated revenues for the month compared to last October. And although not a record-breaker, after a soft start to the summer season, visitors rallied for a 2.5 percent increase in occupancy that when coupled with a 2.5 percent increase in ADR, delivered a comfortable five percent increase in revenues for the season.

“The summer season ended on a high note, and the victory comes largely from excellent rate management in the face of ongoing consumer reticence about rising rates,” observed Tom Foley, senior vice president of Business Intelligence for Inntopia. “After several years of steadily rising rates, consumers have been pushing back and properties recognized that resistance and kept rates pretty steady--and that kept visitors coming.”

It’s all about winter

With data for the entire winter season now available, it is becoming evident that current conditions, particularly a shift in the school breaks over the Christmas holidays and some continued price sensitivity, are impacting early bookings. As of Oct. 31, winter occupancy on-the-books for November through April is down 1.6 percent compared to last year at this time with gains in February, March, and April while the first three months are all trending down—most notably in December—down 7.7 percent.

Daily rates for winter are up a modest 1.9 percent for the full winter with scant decreases in three of the months and upticks in three of the months. April is posting the strongest rate gain up--11.6 percent—although the number of bookings is relatively small at this point in the season. The somewhat lower winter occupancy is being very slightly offset by the higher rates so properties are currently eking out a modest 0.3 percent increase in winter revenues.

“October is that time of year when economic conditions are really what drive bookings, and that tests our patience while we wait for snow. And this year we had the usual angst of a presidential election that typically causes consumers to be cautious—and creates another barrier to booking activity,” offered Foley. “Pricing concerns combined with some awkward school holiday breaks, and some snow hangover memories from last year are posing some early season challenges heading into the season. But with November comes the first real snowfalls and a slew of opening days across the industry, shifting bookings from the economically reticent to, in a perfect world, the snow-driven and passionate.”

Economic indicators

*The Dow Jones Industrial Average (DJIA) fluctuated considerably during the month with strong gains in the beginning of October. But those were offset in the second half of the month by lower earnings election concerns and the DJIA finished with a decline of 566.7 points or down 1.3 percent. This is the first monthly decline since April and only the second drop in 2024. Despite the selloff, economic data remained strong and the Index closed above 40,000 for the fourth consecutive month and posted a 26.8 percent increase over October 2023.

*Consumer confidence and sentiment both moved up in October with one index sharply outpacing the other. The Consumer Confidence Index (CCI) got a slight upward adjustment for September, but in October, it really jumped—up 9.6 percent to mark its biggest gain since COVID vaccines became widely available in March 2021. In contrast, the Consumer Sentiment Index (CSI) was essentially unchanged—up just 0.4 percent.

“The big bump in the CCI reflects consumer’s optimism about both current and short-term labor and earnings expectations, but inflation is still playing a significant role in attitudes,” explained Foley. “From the travel perspective, consumers indicated more intentions to stay in hotels and/or dine out during October which could be good news for mountain destinations once more snow arrives.”

*The Unemployment Rate remained the same in October at 4.1 percent but job creation was anemic with only 12,000 new positions added during the month and the weakest showing since December 2020. Figures for August and September were both adjusted downward but the damage inflicted by the back-to-back hurricanes of Helene and Milton on the East Coast and the striking workers at Boeing in the Pacific Northwest were part of the reason.

Watching closely….

• Booking pace, the difference between bookings made last month for arrival in the next six months compared to the same time last year, continued to yo-yo up and down as it has since June. Bookings for the upcoming six months did manage to squeak out a one percent increase over last October.
• Presidential elections do have an impact on bookings as consumers tend to hit the pause button as they wait to see how things turn out. But typically, recovery from election anxiety tends to mitigate quickly as life returns to the familiar.
• Holiday timing is creating challenges this season. Thanksgiving is four days later this year, and as expected, is driving stronger occupancy for that last week of the month, but weaker occupancy the week prior and is pulling overall November occupancy down nearly ten percent. School holidays over Christmas and New Year’s have also shifted with 45 percent more students in school through Dec. 20 this year compared to last--making pre-Christmas travel problematic for families. But with students out of school into the first week of January, there is a strong opportunity for growth in that week. Currently, the data isn’t showing any booking gains for that week in January yet.
• Correlation between daily rates and occupancy continues into the winter months as price-sensitivity noted in the summer months remains an issue for many consumers. For the busiest months of December through March, properties asking for higher rates are reporting lower occupancy. Properties with slightly lower rates are seeing a slight uptick in occupancy.
• Luxury properties priced at $850/night or more are currently outpacing their lower- priced counterparts. They have raised winter rates 4.2 percent compared to last year and are seeing a 0.9 percent increase in occupancy. Moderate properties in the range of $401 to $850/night have lowered rates one percent but are still experiencing a 0.4 decline in occupancy. Struggling the most are economy properties at $400/night or less, as they have nudged rates up 0.7 percent, but experiencing a slide in occupancy of 1.4 percent.

“Stability was the story for much of the summer for both occupancy and rates, but winter is looking less certain,” Foley acknowledged. “Uncertainties remain about the economy, the new administration, and price-sensitivity. But as always, abundant and consistent snowfall, or a lack of it, will play a considerable role in how the winter season unfolds,” 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.