As forecasted, lodging properties participating in DestiMetrics monthly data collection finalized the summer season with modest year-over-year increases in occupancy, daily rates and aggregated revenue; however, the focus of this month’s Monthly Market Briefing from the Business Intelligence division of Stowe, VT-based Inntopia was primarily the winter forecast for the 17 mountain resorts across seven western U.S. states as the winter ski season data is now available.
In the early days of this year’s ski season, the pace and patterns are primarily steady and consistent with last summer and the 2023/24 winter season, but some turbulence exists that could have a little, or a lot, of impact on winter visitation numbers.
October Wrapped Up a Strong Summer
For October, occupancy was 1.2 percent, the Average Daily Rate (ADR) was up 3.2 percent for a combined 4.2 percent gain in aggregated revenues for the month compared to October 2023. Although not a record-breaker, visitors rallied for a 2.5 percent increase in occupancy after a soft start to the summer season, which, when coupled with a 2.5 percent increase in ADR, delivered a five percent increase in revenues for the season.
“The summer season ended on a high note, and the victory comes largely from excellent rate management in the face of ongoing consumer reticence about rising rates,” observed Tom Foley, senior vice president of Business Intelligence for Inntopia. “After several years of steadily rising rates, consumers have been pushing back, and properties recognized that resistance and kept rates pretty steady, which kept visitors coming.”
Early Bookings for Winter Season
With data available for the entire winter season, it appears that current conditions, particularly a shift in the school break over the Christmas holiday and some continued price sensitivity, are impacting early bookings.
As of October 31, winter occupancy on the books for November 2024 through April 2025 is down 1.6 percent compared to last year. Gains were recorded in February, March and April, while the first three months were trending down—most notably, December, down 7.7 percent.
Daily rates for the full winter season are up 1.9 percent, with a slight decrease in three winter months and a slight increase in three other winter months. April is posting the strongest rate gain, up 11.6 percent, although the number of bookings is relatively small this early in the season. The somewhat lower winter occupancy is slightly offset by the higher rates, so properties see a modest 0.3 percent increase in winter revenues.
“October is that time of year when economic conditions are really what drive bookings, and that tests our patience while we wait for snow. And this year we had the usual angst of a presidential election that typically causes consumers to be cautious—and creates another barrier to booking activity,” offered Foley. “Pricing concerns combined with some awkward school holiday breaks, and some snow hangover memories from last year are posing some early season challenges heading into the season. But with November comes the first real snowfalls and a slew of opening days across the industry, shifting bookings from the economically reticent to, in a perfect world, the snow-driven and passionate.”
Economic Indicators
The Dow Jones Industrial Average (DJIA) fluctuated considerably during October, with strong gains in the beginning of the month, but those were offset in the second half of October by lower earnings election concerns. The DJIA finished with a decline of 566.7 points or down 1.3 percent; this is the first monthly decline since April and only the second drop in 2024. Despite the selloff, economic data remained strong and the Index closed above 40,000 for the fourth consecutive month and posted a 26.8 percent increase over October 2023.
Consumer confidence and sentiment increased in October, with one Index sharply outpacing the other. The Consumer Confidence Index (CCI) got a slight upward adjustment for September, but, in October, it jumped—up 9.6 percent to mark its biggest gain since COVID vaccines became widely available in March 2021. In contrast, the Consumer Sentiment Index (CSI) was essentially unchanged—up 0.4 percent.
“The big bump in the CCI reflects consumer’s optimism about both current and short-term labor and earnings expectations, but inflation is still playing a significant role in attitudes,” explained Foley. “From the travel perspective, consumers indicated more intentions to stay in hotels and/or dine out during October which could be good news for mountain destinations once more snow arrives.”
The Unemployment Rate remained the same in October at 4.1 percent, but job creation was anemic, with just 12,000 new jobs added during the month and the weakest showing since December 2020. Figures for August and September were adjusted downward but the damage inflicted by the back-to-back hurricanes of Helene and Milton on the East Coast and the striking workers at Boeing in the Pacific Northwest were part of the reason.
Watching Closely
Booking pace, the difference between bookings made last month for arrival in the next six months compared to the same time the previous year, continued to yo-yo up and down as it has since June. Bookings for the upcoming six months did squeak out a one percent increase over last October.
Presidential elections impact bookings as consumers tend to hit the pause button as they wait to see how things turn out. But, typically, recovery from election anxiety tends to mitigate quickly.
Holiday Timing Creating Challenges This Season
Thanksgiving is four days later this year, and, as expected, it is driving stronger occupancy for the last week of the month. However, weaker occupancy the week before is pulling overall November occupancy down nearly ten percent.
School holidays over Christmas and New Year’s have also shifted, with 45 percent more students in school through December 20 this year than last, which could make pre-Christmas travel problematic for families. However, with students out of school into the first week of January, there is an opportunity for growth that week. The data still needs to show booking gains for that week in January.
A correlation between daily rates and occupancy continues into the winter months, as price sensitivity noted in the summer months remains an issue for many consumers. For the busiest months of December through March, properties asking for higher rates report lower occupancy. Properties with slightly lower rates are seeing a slight uptick in occupancy.
Luxury properties priced at $850/night or more exceed their lower-priced counterparts. They have raised winter rates by 4.2 percent compared to last year and see a 0.9 percent increase in occupancy. Moderate properties in the $401 to $850/night range have lowered rates by one percent but continue to experience a 0.4 percent decline in occupancy. Struggling the most are economy properties at $400/night or less, as they have nudged rates up 0.7 percent but are experiencing a slide in occupancy of 1.4 percent.
“Stability was the story for much of the summer for both occupancy and rates, but winter is looking less certain,” Foley acknowledged. “Uncertainties remain about the economy, the new administration, and price-sensitivity. But as always, abundant and consistent snowfall, or a lack of it, will play a considerable role in how the winter season unfolds,” he concluded.
Image courtesy Vail Resorts
