Coronavirus fears expected to impact tourism economy for Western mountain resorts
The travel business faces a “one-two punch” from the coronavirus that threatens to cool what’s been a solid winter for Western mountain resorts, according to Inntopia, a company that examines occupancy rates and bookings for clients across the High Country.
The first punch from the new virus is “travel fear” among potential consumers.
“There’s the fear of getting sick, the fear of being quarantined, the fear of making a travel commitment that’s canceled for any number of reasons, the fear of a lost investment and the fear of the unknown,” Tom Foley, Inntopia’s vice president for business intelligence, wrote in a report released Thursday.
The second punch is potential strain on consumers due to economic disruptions. The economy is expected to experience “instability” in the midterm because of the coronavirus, the report said.
Inntopia produces a monthly report on occupancy levels and future bookings in Western mountain resorts through its subsidiary, DestiMetrics. The next report, looking at booking trends for the next six months, will be out in about two weeks.
Meanwhile, preliminary data among Inntopia’s client destinations shows some consumers already are canceling their trips. The company conducted a survey of 300-plus property management companies to gauge trends.
It found 38% have seen an uptick in cancellations for future travel in the past 10 days. About two-thirds have fielded calls from future guests with concern about coronavirus, also known as COVID-19.
The first two cases in Colorado were confirmed Thursday, including a man who skied at Keystone Resort and Vail Mountain and stayed at a condo in Keystone.
At a press conference on Thursday night, Summit County officials attempted to tamp down fears about the spread of the virus.
“For people concerned about travel here, that’s an individual decision, but … we encourage our visitors to keep their trips as planned,” Summit County Commissioner Elisabeth Lawrence said.
Health officials have emphasized that the man was asymptomatic while visiting the ski resorts and that the risk to the public is low. But if the virus continues to spread nationally and the economy sputters, there will inevitably be an impact on future travel, the Inntopia report said.
“… The more elite mountain destinations in the West will likely be impacted more significantly by travel bans or fear of travel bans than those destinations that rely more heavily on a drive market,” Foley wrote.
On the other hand, U.S. residents who planned to travel abroad may be more inclined to stay put in the U.S., creating an opportunity for U.S. destinations to pick up more domestic travelers.
Cancellations are coming
Organizers have canceled the National Disabled Veterans Winter Sports Clinic, which was scheduled to be held in April in Snowmass Village. In Frisco, Saturday’s Susan G. Komen Colorado Snowshoe for the Cure event was canceled out of an “abundance of caution” for the health of those with cancer and cancer survivors.
Inntopia said resorts that rely on group business might be most vulnerable to cancellations.
“Properties or destinations that rely heavily on group, conference and corporate bookings are likely to feel the effects sooner and more strongly than those with fewer group stays,” Foley’s report said.
Vail Resorts spokeswoman Sara Lococo said the company is getting calls from concerned guests and that call takers are reiterating that the risk to the public is low.
“Guests have been asking what precautions we’re taking, and we’re assuring them that we’re following all guidance from health officials,” Lococo wrote in an email.
For those who do decide to cancel their trips to Vail or Keystone, Vail Resorts is allowing guests to rebook their lodging for the same dates at another Vail-owned resort, according to Lococo. That offer stands only for Vail-owned or operated lodging properties and is subject to availability.
Destination resorts have to gauge which action to take, if any, to offset or ease the anticipated loss of business. One option is dropping rates. Foley warned that it took several years for rates to recover after discounts were instituted to spur business after the Great Recession.
As of the end of January, mountain destination business was up 3% collectively over past year for the winter season as of the end of January.
“Three percent isn’t much to work with, but if properties were to drop rates much, they may fail to offset current flat or declining occupancy rates in many communities, pushing revenue further into negative territory,” the report said.
Inntopia’s survey of properties showed 25% of its clients are offering concessions on their cancellation policy. Another 49% are considering concessions.
“This will very likely be a long-term event, given the potential impact on global economies and consumer travel confidence,” Foley’s report concluded. “Making sure the industry is prepared, even at this early stage, to make decisions based on scientific fact rather than fiction or rumor, ensuring we don’t repeat expensive mistakes from the past, and being proactive rather than reactive are all things that we can do to minimize disruption and duration in the domestic destination travel market.”
This story is from AspenTimes.com and includes reporting from Summit Daily Editor Nicole Miller.