Mountain destination occupancy and revenue figures for September and October are still pending but bookings for the fall and early winter months were cooling down as of August 31 according to the most recent DestiMetrics’ Market Briefing released by Inntopia.
The trend of slipping occupancy and barely increasing revenues continues to persist among 18 participating mountain destinations in six western states.
For the month of August, occupancy squeaked up 0.8 percent compared to last August while the Average Daily Rate (ADR) managed a 3.1 percent increase to deliver an aggregated 3.9 percent increase in revenues.
Although August eked out slight improvement, the full summer picture is less rosy. As of August 31, occupancy is down 2.4 percent compared to last year at this time with declines being reported in five of the six months from May through October. The lone exception was August.
In contrast, the ADR is up an aggregated 3.4 percent for the full summer with gains in all six months. Once again, increased rates helped to offset the slipping occupancy figures to provide an almost imperceptible increase in revenues—up a scant 0.9 percent.
“Despite a compelling product and seven years of summer momentum, destinations are having trouble filling beds at the same level as last year,” said Tom Foley, senior vice president of business opperations and analytics for Inntopia. “Evidence of this trend first emerged last winter, and the data are pointing increasingly to an undeniable new pattern that could be related to some sluggishness in the economic environment.”
Bookings made in August were a boon to last-minute arrivals but were less compelling for the upcoming fall and winter months. Bookings made in August for arrival in August were up a healthy 13.8 percent compared last August. However, bookings for September and January were both down 11.4 percent in a year-over-year comparison while the aggregated decrease in bookings for the six months from August through January were down 0.8 percent.
The dynamic and variable news in the economic sector continued to be influenced by national and global political turmoil. As of August 31, the Dow Jones Industrial Average (DJIA) finished the month down a considerable 2.8 percent compared to last month’s rally and record-high finish. This is the fifth decline in the past 10 months and continues to illustrate the seesaw nature of the Index as investors respond to rapidly changing circumstances. The closely-watched DJIA is two percent higher than the same time last year.
“This month-over-month comparison reflects a dramatic slowdown in the pace of market growth over the preceding 18 months,” reported Foley.
In contrast, the Consumer Confidence Index (CCI) which has also fluctuated widely in the past several months, settled down in August and declined only a slight 0.5 percent to finish the month a scant 0.3 percent ahead of August 2018. The national Unemployment Rate also showed stability and remained unchanged at 3.7 percent. Although employers missed analysts’ expectations by adding only 130,000 new jobs, worker’s wages did increase during the month.
“Global and domestic economic turmoil are starting to impact financial and consumer markets and that, in turn, is starting to change long-sustained travel patterns by mountain visitors,” Foley said. “Rate is clearly becoming a more sensitive consideration for both summer and winter guests than it has been in the past decade. Lodging properties are going to have a delicate balance managing rates that will support revenue without dissuading their customers.”