Rooms may not fill for Christmas season
By the numbers:
8 percent: decline in Vail occupancy over the 2014-2015 season.
5 percent: Increase in average room rates over the 2014-2015 season.
152: Lost hotel beds in Vail since 2011.
23 percent: Loss in value of the Canadian dollar versus the U.S. dollar since 2014.
VAIL — For just about all of Vail’s history, the Christmas season has been seen as the gold standard of holidays, the time when the town will absolutely fill up with free-spending families. That reputation may be dented somewhat this year.
Lodging reservation numbers as of Nov. 30 gathered by Destimetrics, a Denver-based market research and consulting company, show the Christmas season underperforming last year’s numbers.
At a Tuesday afternoon meeting of the Vail Town Council, Destimetrics owner Ralf Garrison said his company first noted the lag in business with lodging reservations reported at the end of October. That lag was eyebrow-raising, Garrison said, adding that company analysts then waited to see the Nov. 30 reservation numbers.
With those numbers in hand, Garrison told the council it’s unlikely Christmas will fill in.
Starting about Dec. 6, some lodges began offering Christmas-week deals, Garrison said.
“The likelihood we’ll fill in now is dubious at best,” Garrison said.
On the other hand, Vail Racquet Club General Manager Matt Ivy told the council that he expects that East Vail property to fill up by the time the holiday arrives, thanks to late-booking guests.
“Right now we’re just ahead of last year. … Two weeks ago we were down 10 percent,” Ivy said, adding that while January, February and March are lagging right now, he’s optimistic about the remainder of the winter.
The overall winter lodging scene is also lagging behind last season’s bookings. As of Nov. 30, advance bookings were down roughly 8 percent.
February is markedly down, due in large part to the boost seen during the 2015 FIS Alpine World Ski Championships. But, Garrison said, March is a bit down from last season, too.
REASONS HARD TO PINPOINT
While bookings are easy to track, it’s harder to understand the reasons for a boost or a dip that doesn’t have anything to do with special events or where Easter falls on the calendar in a given year.
Garrison said there are a number of possible explanations for the declines.
For international visitors, the current strength of the U.S. dollar has made travel to this country markedly more expensive. A family in Canada will spend 23 percent more on a Vail vacation this season than last due to exchange rates. A visitor from Europe will pay 18 percent more.
But, Garrison said, American visitors may help fill in that gap if resorts market the safety of domestic resorts.
Consumer confidence is also “wobbly” at the moment, Garrison said. The Consumer Confidence Index, a national indicator, was above 110 in 2007, the year before the slump. It dipped into the 60s during the downturn. The index has flirted with the 100 mark this year, but has shown some month-to-month spikes, Garrison said.
Another wobbling part of the national economic picture is uncertainty in the nation’s stock markets, Garrison said.
Then there are local factors.
Occupancy and rate equal supply and demand. As demand rises, so does price. Since the downturn, the resort industry’s average daily rates rose roughly equally to increases in occupancy. In Vail since 2012, rates have risen much more quickly than occupancy, Garrison said.
Since the 2007-08 winter season, and following a decline during the economic downturn, average daily rate in the 2014-15 season had risen 21.5 percent, while occupancy is still fractionally below the marks set in the previous decade.
Part of that occupancy decline comes due to a decline in available rooms since 2011. Since then, both the Lionshead Inn and the Roost Lodge have closed, marking a loss of 152 hotel rooms. The Lionshead Inn is being replaced with The Lion, a condo project. The Roost property remains vacant, although there are plans to someday build another hotel on the site.
With all those factors perhaps contributing, Garrison said one possibility to boost occupancy in the short term is refocusing marketing attention on Front Range guests.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org or @scottnmiller.