Mountain resorts see slight lodging bump thanks to more snow, less virus
Even with the boost, seasonal totals lag 2019-2020
Late January brought much-needed snow to many western mountain slopes along with positive news about a drop in both COVID-19 cases and hospitalizations.
The combination gave a boost to lodging properties in 18 mountain destinations across eight western states as the mid-winter results were recently distributed by DestiMetrics, the business intelligence division of Inntopia, in its monthly market briefing. While properties gained some ground, seasonal deficits remain substantial according to aggregated data regarding occupancy, daily rates and revenues through Jan. 31.
For the first time in three months, DestiMetrics is reporting positive year-over-year gains in the booking pace. Reservations taken in January 2021 for arrival in that same month are up 42.9% compared to January 2020, while bookings for February arrivals based on January-only bookings were up 23.5%. March bookings are lagging well behind with a 15.4% decrease while the subsequent three months are down dramatically. For the entire six months, bookings made in January for arrivals in January through June are down a modest 5.2% compared to last year at this time.
Actual occupancy for January was down 29.1% and the average daily rate was down 12.3% in a year-over-year comparison. The result was a loss in revenue of 37.8% for the month.
Full winter perspective
Occupancy for the full six-month season from November through April is down 27.8% compared to last year at this time but marks a moderate improvement from last month — when the season was down 33.1%. Average daily rate is down 6.2% but is still showing rate gains in three of the six months — November, April and March.
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The sluggish occupancy when coupled with lower rates is creating a 32.3% decline in winter revenues — but again, an improvement over last month when they were down 36.9%.
The briefing also noted that cancellations are beginning to gradually taper off and have reached their lowest level since the final week of October. The week before Christmas, cancellations accounted for 30% of all transactions at participating properties, but by the third week of January they had drifted down to 18.2% of all transactions. For the final week of January, it was only 14.5% of all transactions.
“It was encouraging to see that with the arrival of snow in many regions, cautious optimism about the rollout of the vaccine, and declining COVID-19 cases, occupancy clawed back some lost ground during the month,” Tom Foley, senior vice president for business operations and analytics for Inntopia said. “We are also seeing that consumers remain very focused on short-lead reservations. Bookings made one to 30 days in advance are the predominant transaction, and through some strategic rate management, many properties are achieving some incremental fill.”
Market news and the day-to-day realities for many Americans continue on contradictory paths. The Dow Jones Industrial Average dipped 1.4% during January for the first decline since October. Despite the drop, the Dow Jones is 3.9% higher than it was in January, 2020.
The Consumer Confidence Index rose a slight 2.5% in January to 89.3 points after slipping in November and December. Consumers showed mixed responses based on the Present Situation Index which showed that concern about COVID-19 cases, hospitalizations and deaths were tempered by some optimism for improved economic conditions going forward.
The national unemployment rate dropped from 6.7% in December to 6.3% in January, but the decrease was primarily driven by frustrated job seekers abandoning their job searches. An anemic 49,000 new jobs were added during January, substantially below the anticipated 105,000.
“Wall Street continues to remain consistently out of touch with the consumer marketplace and seems to be immune to the long-term concerns surrounding employment and consumer spending,” Foley said. “However, consumers with investments in the financial markets through IRAs or 401(k) accounts are likely to be buoyed by the stability and growth in their retirement accounts and that may explain why consumer confidence, though well below an acceptable level, has remained higher than expectations through both the pandemic and political volatility of the past year.”
As of Jan. 31, on-the-books occupancy is down 30.9% compared to last summer at this time and is showing declines in all three months (May through July) that data is available. In contrast, the average daily rate is up 18.9% for those months. However, revenues are down 17.6% as the higher rates are not enough to offset the lower occupancy.
“The improvement in occupancy during January, along with some promising growth in February and March fueled by the short-lead booking trend, has helped move the needle in the right direction and raise hopes for some continued modest recovery,” Foley said. “However, there is really no way to sugarcoat current conditions as the large deficits in both seasonal occupancy and revenues appear insurmountable at this time. But cancellations are declining while booking volume remains high, and the overall trend is moving upward. So, if the number of COVID-19 cases continues to fall, vaccinations continue to rise and ample snow arrives, there is optimism that visitors will continue to book a mountain vacation.”