Regional lodging dominated by short-lead bookings
August brought some relief from a summer of steep declines in occupancy
Lodging performance continued to improve during August at mountain western resorts in six states, but by many measures, the summer season is historically slow with two months of shoulder season still ahead. That assessment was delivered by DestiMetrics in its monthly Market Briefing by Inntopia and includes data collected from 18 destinations and more than 300,000 rooms.
Booking volume was the most notable story during August among participating properties with booking pace higher than anticipated, boosted by continued strength in short-lead reservations — with most arrivals in 60 days or less. Room rates also continued to move up and helped ease some of the pain of decreased occupancy.
For August, actual occupancy was down 22.3% compared to August 2019. A solid year-over-year increase in the Average Daily Rate of 6.9%for the month was encouraging, but fell far short of offsetting the steep drop in occupancy and led to a 17.3% decline in revenue for the month.
During August, bookings made for arrivals for the six months from August through January edged up a slight 2.7% compared to the same time last year. The greatest volume was for short-term arrivals, with August arrivals receiving a healthy 31.7% increase while arrivals slated for September were up an impressive 47.9%. In contrast, bookings made during August for arrivals in the months of October through January are pacing behind the same time last year — particularly for October, which is down 47.5% in a year-over-year comparison to last year and December — down a worrisome 39.3%. As far as booking pace is concerned, the consumers have moved to a much shorter-term planning schedule.
Occupancy was way down
A review of the six-month summer period from May through October shows a 40% decrease in occupancy from this same time last summer. The decrease includes four months of actual occupancy from May through August along with two months of on-the-books data for September and October. For lodging properties, the silver lining in the discouraging occupancy was a healthy 10.1% increase in daily rate, with the most significant gains in September and October. Despite the rate strength, it is not sufficient to overcome the low occupancy figures. Aggregated revenues for the summer are down 34.5% compared to summer of 2019.
“Although western mountain destinations had an essentially impossible challenge to match last summer’s record-breaking season, they were able to build on July’s strong demand and managed to record a year-over-year improvement in occupancy from last month,” said Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “Along with rate strength, one of the most encouraging trends we tracked this month was the uptick in ‘incremental fill,’ an industry term that describes the number of rooms filled in compared to what was on the books as of July 31 and what was actually achieved by Aug. 31. Incremental fill rose 14.9% during August and is also starting to show up for September and that greatly exceeded expectations based on traditional demands for this time of year.”
The Dow Jones Industrial Average increased a dramatic 8% in August to reach near-record levels and marked the fifth consecutive month of gains. However, the Consumer Confidence Index dropped again in August — another 6.9 points to bring it to its lowest level during the pandemic — and its lowest level since April 2014. In a year-over-year comparison, it is down nearly 37% from where it was in August of 2019. The national unemployment rate improved significantly during August as employers added 1.37 million new jobs to drop the rate to 8.4% during the month — down from 10.2% in July.
“It is important to recognize that financial markets are continuing to outpace the greater economy and are not necessarily reflective of the current consumer marketplace and behavior,” Foley said. “While stability or growth in markets and indexes can boost confidence in consumers if they see improvements in their investment and savings accounts, the reality is that current market indicators aren’t reflective of the financial circumstances of all consumers.”
What about fall and winter?
Although the prime booking season for winter mountain vacations is still ahead, August booking patterns continued to follow the short-lead trends of the past few months. Aggregated occupancy on the books for arrivals in November through February is down 41.7% compared to the same time in 2019. Average daily rate is showing a bit more stability and is down 4.8% in a year-over-year comparison, with November a notable bright spot. Average rate in that month is up 17.4%. However, as a result of low occupancy and generally lagging daily rates, aggregated revenues for the first four months of the winter season are down 44.5%.
“Despite results that appear devastating when compared to last year, when considering what the destination travel industry has suffered in the past five months because of the COVID-19 pandemic, lodging performance at western mountain destinations has started shifting in a more positive direction this past month,” Foley said. “Room rates are continuing to tick up, booking volume is at its strongest level since March, and we are actually starting to see a slight extension to the length of stay which helps support revenues.”
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In Eagle County, the most commonly reported dead bird has been the Wilson’s warbler, which is yellow. Dead yellow-rumped warblers have also been a common sight.