As predicted for the past few months, Western mountain destinations across eight Western states combined had their best-aggregated summer business on record for occupancy, daily rates and revenue, according to DestiMetrics, the business intelligence division of Inntopia.

The figures are according to its Monthly Market Briefing of 290 participating Western properties that contributed their data through October 31.

Despite some slowing of booking pace triggered by the Delta variant during August and September, the final summer months showed strong consumer enthusiasm for a less restricted ski and snowboard season to carry the momentum into the upcoming winter season.

Comparisons to 2020 and 2019 at the same time prior to the pandemic, showed a solid rebound, including steadily escalating daily rates.

Winter And Holiday Traffic Up
If the weather is good, the pandemic continues to ease, and the economy remains stable, the winter season looks positive. Challenges related to adequate staffing and employee housing are significant; however, the return of some international J1 visa workers could help mitigate the issue, and the booking pace suggests that visitors are eager to return to a more typical mountain vacation.

As of October 31, on-the-books occupancy for the full winter season (from November through April) is up 75 percent compared to last year at this time with gains in all six months, including triple-digit gains in February and March. ADR for the winter is up 23.5 percent and the combination is delivering a 116.1 percent increase in aggregated revenues. When contrasted to two years ago, on-the-books occupancy is up 18.6 percent compared to this time in 2019 with ADR up 20.9 percent—allowing properties to see a 43.5 percent gain in revenues compared to October 2019.

“Conditions driving bookings for the upcoming winter season at mountain resorts couldn’t be better,” reported Tom Foley, senior vice president, Business Process and Analytics, Inntopia. “Vaccination rates that are ticking up, infection rates moving down and strong financial and consumer markets, despite inflation, are driving considerable upward momentum and are contributing to extending the summer’s records into next spring. Robust bookings, extended length of stay, earlier lead times for bookings and fewer cancellations are also contributing to the positive winter outlook,” he continued.

October And Full Summer Wrapup
October put the exclamation point to summer results with a 6.7 percent increase in occupancy and an 18.1 percent gain in the Average Daily Rate (ADR) as of October 31, in a year-over-year comparison. When compared to October 2019, occupancy was up 8.4 percent with ADR up 40.5 percent for the month. Compared to last summer, aggregated occupancy finished up 45.5 percent and daily rates were up 24.1 percent to log an 80.7 percent increase in revenues in a year-over-year comparison. While summer occupancy only squeaked out a 0.8 percent gain compared to the summer of 2019, daily rates were up 33.1 percent compared to two years ago at this time to offset the anemic gain in occupancy. Lodging properties posted a 34.4 percent increase in aggregated revenues compared to two summers ago.

Economic Indicators
The Dow Jones Industrial Average (DJIA) rose in October by adding 1,975.6 points to rise 5.8 percent and set another all-time record for the monthly close. This surge offsets the 4.3 percent lost in September and marks the seventh gain in the past 10 months. The DJIA was up 35.2 percent from one year ago. Reversing three consecutive months of decline, the Consumer Confidence Index (CCI) added a modest four points to deliver a 3.6 increase from last month.

For the third consecutive month, the national Unemployment Rate fell in October from 4.8 percent to 4.6 percent, as the economy added 531,000 new jobs with the Leisure and Hospitality industry filling 164,000 positions. September’s job creation figures were also adjusted up from 194,000 to 312,00 but the ongoing chasm between available positions and the number of employed persons remained low with approximately 3.2 million unemployed since February 2020, whether from permanently exiting the job market or not finding work in a different industry from a job lost. Unemployment declined 1.2 percent since the beginning of the summer and nearly four million new jobs were added.

“Although the numbers look promising on the surface, that employee gap remains an issue for mountain resorts and communities,” Foley explained. “Lack of employees has the potential to impact the ability of the travel industry to meet the high demand and justify the high cost of destination travel. That ongoing void may force changes to service levels or rates as the season progresses.”

Keeping An Eye On It

  • Average Daily Rate (ADR) continues to move steadily upwards compared not only to last year, 23.5 percent higher but also to two years ago, 33.1 percent higher. This rapid rise outpaced the economy and according to Foley, may “actually leave the industry vulnerable to strong rate corrections if the financial or consumer markets change significantly.”
  • COVID-19 caseloads are a leading indicator of booking patterns with bookings increasing in an inverse relationship to the declining number of new cases and vice-versa. Over 20 months, the correlation has remained consistent and even modest changes in new cases will impact bookings.
  • Supply chain woes impacting inflation and the retail sector have the potential to have a positive impact on destination travel. As retailers’ shelves remain understocked, gift-givers could opt for experiential presents this holiday season in lieu of difficult-to-find hard goods. The situation is an opportunity for travel suppliers to promote gift certificates for a wide range of travel and recreation experiences.

“Booking momentum remains strong and transactions for the winter ahead are remarkably strong despite the continued upward trend in room rates,” Foley observed. “With Christmas and New Year’s both falling on Saturday this year, that helps extend the holiday travel period and it is currently creating excellent occupancy fill in the ten days before the holiday as well as the always popular days between Christmas and New Year’s, and that is driving some pretty amazing revenue numbers for the second half of the month.”

“As always there are some issues that could shift the narrative, including the national inflation rate that reached 6.2 percent in October, the exodus of mountain town employees and a long-term weather forecast for a La Nina snow pattern that isn’t always beneficial for all regions,” he continued. “But if the pandemic continues to ease, the financial markets remain positive and visitors can look forward to slope time with far fewer restrictions than last year, it should be an excellent year,” he concluded.

Photo courtesy Montage Residences, Deer Valley, UT