According to Destrimetrics Monthly Market Briefing Report, momentum for the holiday season at Western mountain resorts turned cool in early January as a surge in Omicron variant cases had consumers hitting the pause button on short-lead bookings.

A review of the data from 18 Western mountain resorts in seven states showed that variant had a strong influence on booking patterns at resort destinations and a clear correlation that as cases rose, bookings declined, and when cases dropped, bookings went up.

In January, occupancy was up 39.8 percent compared to January 2021, but when compared to January 2020, occupancy declined 3.7 percent. Rate growth and strength continued to be up with the Average Daily Rate of 37.9 percent compared to last year to deliver a 92.7 percent gain in revenue, while ADR was up 21.5 percent compared to the month of January two years ago, providing a 17 percent increase in revenue compared to January 2020.

January Booking Pace
January bookings for arrivals in the six months from January through June continued to increase, but the Omicron impact was illustrated as bookings made for arrivals in January were down 63.4 percent compared to last year at this time and down 33.1 percent for arrivals in February. This same booking pattern was evident when comparing two years ago, as bookings made during January 2020 for arrivals in that month were down 59.2 percent and 18.1 percent for February 2020 arrivals.

“One of the most intriguing data points for us this month was this ongoing softness in the short-lead booking pace or volume of bookings for arrival within 60 days when we compare it to both last year and two years ago,” said Tom Foley, senior vice president, business process and analytics, Inntopia. “While last year at this time we saw a surge in bookings as vaccines were being rolled out, the recent Omicron surge in early January this year resulted in a slowing of overall bookings, but particularly for short-lead arrivals. But as new cases began to ebb, booking volume started returning, and that improving trend should help bolster an even stronger late February and March.”

Halfway Through Winter, Full-Season Is Strong
As of January 31, occupancy for the full winter season, including actual results from the first three months of the season and on-the-books results for the final three months of the season, are up 48.7 percent compared to last winter at this time with a triple-digit percentage gain for the month of April. Along with high occupancy figures, ADR is up 35.2 percent, and the combination provides a 101.1 percent increase in revenue from one year ago. Compared to two years ago, occupancy is up 5.7 percent, with gains posted in four of the six months, with only November and January showing slight declines. Daily rates are up 26.9 percent compared to two years ago, and properties show a 34 percent increase in seasonal revenues compared to two years ago at this time.

Early View Of Upcoming Summer
Although still relatively early in the booking season, summer demonstrates continued strength and growth. As of January 31, aggregated occupancy for the six months from May through October is up 48.5 percent compared to Summer 2021. On-the-books ADR is up 8.2 percent, and the combination of increased occupancy and a boost in daily rates is garnering a 60.6 percent year-over-year revenue gain. The perspective changes somewhat when compared to two years ago at this time, with occupancy up only 1.6 percent compared to Summer 2020. But ADR compensates for the softness in occupancy with a 29.6 percent increase compared to the pre-pandemic summer. The result is an early but optimistic gain of 31.6 percent in the upcoming summer’s seasonal revenue.

Economic Indicators
In another reversal from the previous month, the Dow Jones Industrial Average dropped more than 1,200 points for a 3.3 percent decrease from December’s closing bell. The Omicron surge topped the headlines, but inflation hit a 40-year high during January, and uncertainty about actions by the Federal Reserve Bank on interest rate increases contributed to investor caution. However, strong earnings and decreasing Omicron cases eased some angst and led to a 1,400-point recovery near the end of the month following the 33,150-point low on January 24. That volatility is expected to persist as markets react to the first round of interest rate hikes expected in early March, persistent and growing inflation, and global tensions.

Also changing course after several months of gains, the Consumer Confidence Index (CCI) recorded its first decline since September and dropped 1.2 percent to close at 113.8 points. Despite concerns about Omicron and inflation, consumer confidence remained relatively steady, with mountain destinations continuing to see strong demand and tolerance for high room rates.

The national unemployment rate ticked up slightly during January despite employers exceeding expectations by adding 467,000 new jobs when analysts were expecting the job market to land somewhere between a decline of 220,000 jobs to the potential of 156,000 new jobs. The Bureau of Labor Statistics also adjusted the November and December job numbers upward by a total of 750,000 jobs, making this one of the strongest jobs reports in months. The Leisure and Hospitality sector was the most active, adding 151,000 jobs but still with 1.8 million positions below pre-pandemic levels. Wages are up 5.7 percent from this time last year, offsetting rising inflation rates.

“Destinations continue to set record revenue numbers driven primarily by sustained high rates and supported by strong occupancy,” said Foley. “But the meteoric gains through Summer 2021 and this year’s early-season seem to be diminishing as November and January actual occupancy both finished below those pre-pandemic months in Winter 2019/20; this is likely due to the influence of the Omicron effect and a shift in overall demand, and something we will be watching with close attention in the next few months.”