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Vail, Eagle County lodging industry moving into a different phase, with effects still unknown

Occupancy softening, but group business on the rise

Group business, from the Vail Lacrosse Shootout, pictured here, to corporate meetings and weddings, is on the rise in the local lodging industry.
Vail Daily archive
By the numbers
  • 39.9%: Aggregate increase from 2019-20 in room rates across 17 mountain resorts.
  • 2.9%: Decline in the Consumer Confidence Index from January to February.
  • 6%: National inflation rate in February.
  • 4.9%: February decline in the Dow Jones Industrial Average.
  • Source: DestiMetrics

Eagle County is winding down a successful winter, particularly in the lodging industry. But how long can that success last?

The latest data from DestiMetrics, the Business Intelligence division of Inntopia, shows a bit of a mixed bag across the 17 mountain resorts it tracks. The average daily rate remains high, but occupancy is beginning to dip a bit.

Those rate gains have been significant since the world began reopening from the COVID-19 pandemic.



The big questions are: At what point does softening demand — along with inflation and the prospect of a national recession — start to affect room rates? And, if room rates start to decline, what effect does that have on revenue, for both individual properties and communities?

Tom Foley is Inntopia’s senior vice president of business process and analytics. He said that question has been the topic of a lot of discussion by industry insiders and industry watchers.

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Foley noted that if rates come down without a corresponding bump in occupancy, the result could be troubling for lodges. The bigger question is how far rates might decline.

Backtracking on gains?

Foley said average daily rates are up by 49% since the winter of 2019-20. Losing even half of that gain would be “a big hit,” Foley said.

That kind of decline affects the business needs of property management firms, which have a responsibility to create revenue for unit owners. Hotel operators are responsible to those properties’ stakeholders.

Foley says he’s a number analyst. But, he said, property managers should view 2022 as a peak, not a plateau for further growth.

With winter winding down, Foley said it’s going to be interesting to see what happens this coming summer. Summer travelers are different, Foley said. Those guests tend to be less well-off, Foley said. They also tend to drive to destinations and book closer to their travel times.

Mark Herron is a longtime veteran of the local lodging business. He’s currently a consultant and the lodging liaison for the Vail Local Marketing District and is a member of the Vail Valley Partnership Board of Governors.

Herron noted that the current ski season has been a “really busy” one. That season started a bit slowly, with a dip in December occupancy from the previous year. Since then, though, “Man, did we made a comeback.”

The main reason is snow, of course. Most weeks saw at least a few inches per storm, sometimes with multiple storms per week.

Yes, we’re snow farmers

The snow drove some significant increases in occupancy.

DestiMetrics every week takes an informal poll of 10 Vail lodging properties. That poll showed occupancy booked for three weeks out was 78% in early February. By the weekend of Feb. 24, that number had climbed to 94%.

But even as occupancy dips in some weeks, Herron remains optimistic, largely due to the growth in group business.

Business on the books for the first two months of this year accounted for more than 5,200 room nights, which generated a bit more than $2 million. Group business in the first two months of 2022 was just 1,650 rooms, with significantly less revenue, of course.

Herron said group business started to return in 2021, largely due to weddings that had been canceled in 2020. Now, though, wedding groups are being joined by business and professional groups, along with sports tournaments and other events.

That business has “been missing for three years,” Herron said.

Perhaps more encouraging is the group business that could be coming. Group lead generation through the Vail Valley Partnership is up 43% from last year, Herron said, adding the conversion rate from prospect to confirmed booking is “over the top.”

While individual guests tend to pay higher rates, Herron said group business is money in the bank, since those groups pay in advance.

“We’re getting back to what the (group and individual) mix used to be,” Herron said. “I think we’re going to have a healthy summer.”


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