While the U.S. economy remains unstable with declines in major indicators including continued high unemployment rates and flat retail and real estate sales, the overall travel industry continues to rebound.  Mountain destinations participating in the Mountain Travel Research Program (MTRiP),* experienced sharp increases in July occupancy as well as increases in the advance reservations outlook for the next few months.

Supported primarily by the Fourth of July weekend, July defied overall economic anxiety and recorded the best monthly performance in two years with occupancy up 10.6 percent and the average daily rate (ADR) up 4.3 percent compared to July 2009. The outlook for August also looks solid as of July 31 with advance reservations up 10.5 percent compared to the same period in 2009 and nightly rates are up 1.9 percent.

“After a slow start in May and June, this continued growth in both occupancy and rate is impressive and combined to produce a larger overall revenue increase for mountain resort communities than at any other time during the past two years, which is particularly noteworthy considering the sluggish economic and market conditions,” said Ralf Garrison, MTRiP’s founder and director. “It appears that some market sectors are being dragged down by a fresh wave of economic concerns, but travel in general and mountain travel in particular is showing continued strength.”

The monthly report released yesterday by MTRiP showed that despite the Consumer Confidence Index (CCI) declining 7.2 percent in July to the lowest level since February 2010, results from several major travel industries revealed a different picture.  Online travel retailer Priceline announced second quarter profits of $158 million, up 15 percent from expectations with both higher rates and greater consumer demand. Rival online retailer Expedia received a boost from Moody’s credit ratings with an increase based on their strong performance through the recession and the hotel chain Wyndham Worldwide reported an income increase of 34 percent last quarter. 

“These reports coupled with higher national occupancy, stronger rates, and increased enplanements (airline traffic) is becoming a good news story during a predominantly bad news time,” said Tom Foley, MTRiP research analyst.  “However, you have to monitor all the indicators and with 70 percent of the U.S. economy driven by consumers, the CCI is perhaps one of the most influential measurements of true economic recovery and typically has a significant influence on discretionary spending such as travel,” he cautioned.

The Travel Price Index also moved up 0.9 percent for the eighth consecutive month showing year-over-year increases. It is 4.7 percent higher than June 2009 and the rise is being attributed primarily to increases at the gas pump, airline and rail tickets, and lodging rates.

“Despite low confidence and ongoing concerns about unemployment, consumers continue to give themselves permission to travel but it’s uncertain whether it is because -or in spite of – the tough economic times,” observed Foley.

The MTRiP report also tracks advance reservations for the coming six months and the preliminary indicators are also positive for mountain destinations.  Although it is early for winter bookings and the numbers are relatively small, reservations taken in July for arrivals from August through December are up 8.3 percent.

“After the rough ride of the past two years, the strength we’re seeing in summer mountain business is gratifying, but it’s too early to be overly confident about the upcoming ski and snowboard season since the economic recovery is still sputtering and mixed messages make future predictions uncertain,” Garrison concluded.