Occupancy “on the books” is down 2.2 percent compared to this time last summer in seven western states, according to the most recent monthly Market Briefing produced by DestiMetrics, a division of Inntopia. On the books includes actual occupancy for May through July and reservations for arrivals from August through October.
July bookings, down 17.2 percent at the end of March, rallied strongly in the past four months. Occupancy for July finished down 1.9 percent compared to last summer, with the Average Daily Rate (ADR) up a scant 0.8 percent for a moderate 1.1 percent decrease in revenue for the month. And while occupancy was down 7.6 percent to pre-pandemic Summer 2019, ADR was up 44 percent from four years ago to provide aggregated revenues that were 33.1 percent higher than in July 2019.
Occupancy for the entire summer still lags, but rate strength has kept revenue steady.
Declines of varying amounts occurred in all six months, with September and October showing the sharpest drops; however, ADR was up two percent, almost enough to offset the dip in occupancy but not entirely, as aggregated summer revenues are down 0.2 percent.
For the second consecutive month, year-over-year ADR crept up during July and is now up two percent for the summer, although gains are marginal, with August eking out only an 0.1 percent increase and October a moderate 1.5 percent increase over last year.
A comparison to Summer 2019 reveals a sharply different picture. Compared to the pre-pandemic summer, occupancy is down 8.2 percent, with decreases every month except October. Compensating for the drop in occupancy, daily rates were up an aggregated 41.8 percent to deliver a solid 30.2 percent increase in summer revenues over four years ago.
“We have been tracking the slow but continued improvement in overall lodging performance for the past several months,” observed Tom Foley, senior vice president of Business Intelligence for Inntopia. “And while improvements in occupancy are good news for communities as a whole, the fact that room rates declined steadily in late winter and spring but didn’t decline any further in the past 45 days suggests that consumers may be emerging from the inflation doldrums.” Foley went on to point out that “particularly during July, improving financial conditions have bolstered the balance sheet of individuals with investments or savings and when combined with three consecutive months of wages outpacing inflation, consumers are more optimistic about the coming months.”
Photo courtesy Crested Butte Mountain Resort
