DestiMetrics most recent monthly Market Briefing reported that lodging properties, faced with price-sensitive and inflation-weary consumers, eased back on daily rate increases over the summer and boosted occupancy, sparking a boost in early bookings for the 2024 winter season.

Western mountain resorts have now banked the busiest summer months, with the remaining two months maintaining its pattern of strength and stability. Based on data collected by DestiMetrics, Inntopia’s business intelligence division, the result will be a winning summer for participating lodging properties after returning from occupancy deficits reported last spring.

Occupancy and Rates Increase in August
Even though the aggregated Average Daily Rate (ADR) during August was up 4.8 percent over rates last August, DestiMetrics said visitors to Western resorts were not discouraged, and occupancy rose 4.8 percent to deliver a 9.8 percent increase in revenues for the month in a year-over-year comparison.

Summer Looks to Finish Strong
The company said summer started with occupancy lagging behind last summer, but, as of August 31, with some minor rate adjustments to attract price-sensitive visitors, the situation improved. With four months of summer completed and two more months on the books (September and October), full summer occupancy is now up 3.5 percent over last summer, while daily rates are up 2.4 percent, according to DestiMetrics’ data.

The data shows September as the only month showing a dip in occupancy, down 1.8 percent, but rates are up in all six months, ranging from a s0.6 percent to 3.3 percent. The growth in both rate and occupancy is leading to a 6 percent increase in aggregated summer revenues over Summer 2023, DestiMetrics said in a media release.

“Lodging properties were very strategic in managing rates this summer with increases staying just below the national inflation rate,” offered Tom Foley, SVP for Business Intelligence, Inntopia. “That has been critical to success this year, with consumers continuing to be cautious with their pocketbooks. So, those minor adjustments were quite effective in prompting an uptick in bookings that made rates more palatable to visitors while enabling properties to manage their balance sheets.”

Strong Booking Pace During August Boosted Fall and Winter Occupancy
In a year-over-year comparison to last year, DestiMetrics said the August booking pace jumped 6.7 percent to boost occupancy for visitors arriving from November through February, bringing winter occupancy up to a 0.9 percent gain compared to last year and well ahead of where it was last month when it was down 12 percent.

While DestiMetrics showed that occupancy declines appeared in November, December, and January, all have posted large improvements in the past 30 days, and February posted a 16 percent increase in occupancy for that month compared to one year ago. Daily rates are up a scant 0.5 percent compared to last year, but more notably, the winter ADR has dropped appreciably since just one month ago when rates were up 6.9 percent, indicating that properties are lowering rates during some periods. As a result, the lower rates attract increased bookings, particularly in February. The booking boost is helping to offset the lower rates and is now delivering a 1.4 percent increase in revenue for those four winter months that data is currently available; this is a significant improvement from one month ago when revenues were down 7.6 percent for that period.

“This month illustrates a marked shift in strategy from one month ago when cautious consumers were not booking at the same pace as the past few years,” explained Foley. “Properties recognized that reticence to book and have lowered rates slightly, which has been enough to generate an appreciable uptick in bookings.”

Key Take-Aways

  • Early winter occupancy rose during August after being down sharply for the past few months. The first four winter months all reported improvements from just one month ago, moving from being down 12 percent as of July 31 to being up 0.9 percent as of August 31. Much of the growth came from higher bookings for February, but all other months also posted improvements.
  • December bookings are struggling, down 8.9 percent in a year-over-year comparison and hampered by an ADR that exceeds $810 per night and an awkward calendar for school breaks this season.
  • Booking pace moved up in August to post a 6.7 percent increase over last August and more significantly, reversing the downturn in bookings reported in July.
  • Winter rates softened slightly during August. November rates dipped from up 3.1 percent as of July 31 to down 2.0 percent as of August 31. December slipped from being up 5.0 percent to being up just 2.5 percent, and January dipped from a 5.2 percent gain to a 0.9 percent gain one month later.

“The story this month has been all about rate management for both the remainder of summer as well as the upcoming winter,” observed Foley. “Properties seem to have found the sweet spot that delivers solid revenue results while offering rates that encourage increased bookings and occupancy. With the economy still teetering with inflation and high interest rates, managing rates has been a delicate balance all summer and likely to remain so in the coming months until some of these crucial economic indicators ease.”

Image courtesy Jackson Hole Mountain Resort