Warm temperatures and good economic news are nudging western mountain destinations in the direction of a record-breaking summer for lodging properties in 17 communities tracked by DestiMetrics, the Denver-based company formerly known as the Mountain Travel Research Program (MTRiP).


 

Already recorded in the books is the year-over-year 14.6 percent increase in actual occupancy for the month of May accompanied by a sharp 16.6 percent increase in revenue for the same time period. The boost in occupancy was a reassuring rebound for the lodging industry from April’s decline in occupancy of 3.9 percent which was caused by shift of the Easter holiday to March this year. The trend for June is also positive with on-the-books occupancy as of May 31 up 5.7 percent compared to the same time period last year with revenue ticking up 10.6 percent. The next six months, June through November in aggregate, also look promising with an overall 6.7 percent increase in occupancy for the period compared to the same time last year and only the month of October showing a slight decline.

 

 

“The twin wildcards of economy and weather are working in our favor at this early stage of the summer season,” explained Ralf Garrison, DestiMetrics director. “Forecasts for a hot, dry summer provide an inducement for city dwellers to make a trip to the cooler mountains while mountain resorts have continued to expand and enhance their line-up of special events and activities making these ‘ski’ resorts increasingly appealing in the summer,” he added.

 

 

Marcro economic trends
The monthly DestiMetrics Briefing also provides a summary of key economic indicators with an analysis of the potential impact for the lodging community. The Dow Jones Industrial Average (DJIA) added another 1.9 percent during May and posted its second consecutive monthly record, leaving it 22 percent higher than in May 2012. The Consumer Confidence Index (CCI) reached its highest level since February 2008 and posted its sixth gain in the past year reaching 76.2 points. The one basis point increase in the Unemployment Rate up to 7.6 percent was the first increase since January. “That increase is not as negative as it appeared to be on the surface,” notes Tom Foley, director of operations for DestiMetrics. “Employers added a strong 185,000 new jobs in May and that type of consistent job creation is, not surprisingly, going to attract more people back into the workforce.”

 

 

Special focus was given to the housing market and its role in the overall economy and in mountain destinations where the second-home market plays a crucial role in resort communities. Since July 2010, national sales of single-family homes had climbed from 276,000 to 457,000 in May. Median price has also risen from $204,000 to $271,600 in that same time span.

 

 

“Even more significant than these gains in the housing market is the amount of inventory available at any given time,” explains Foley. “Back in 2010, there was an average of 9.1 months worth of inventory; that has now been slashed to 4.7 months in 2012 with some regions actually experiencing home shortages. We’re now going to be walking a tightrope as low interest rates start creeping up but if the economy is managed properly, we are on track to return to stronger second-home ownership and new residency that can provide critical revenue to local communities through home sales and the spending that accompanies home occupancy.”

 

 

DestriMetrics derives its data from a sample of approximately 260 property management companies in 17 mountain destination communities, representing 24,000 rooms across Colorado, Utah, California, Nevada, and Oregon and may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.