Vail lodging headed for another record summer
By the numbers
14 percent: Increase over 2015 in summer lodging reservations made by May 31.
12 percent: Increase in average daily rate for those reservations.
44.3 percent: Increase in summer lodging revenue vs. 2007.
68.4 percent: Increase in summer lodging revenue for an average of other mountain resorts.
VAIL — For years, conventional wisdom held that summer guests to mountain resorts tend to book lodging much closer to their travel dates than winter visitors. That seems to be changing, as are other elements of the resort lodging business.
Destimetrics, a Denver-based market research company, tracks lodging and other economic data for clients including more than 20 mountain resort communities. According to Destimetrics’ most recent reservation data, advance summer reservations to Vail were up 14 percent from 2015. Those reservations were made before May 31.
Vail is pacing ahead of the rest of the mountain resort industry in that regard. As a group, those resorts are showing a 10 percent increase in bookings.
Perhaps more interesting is when those reservations are coming.
At a recent joint meeting of the Vail Town Council and the Vail Economic Advisory Council, Destimetrics managing director Ralf Garrison said that reservations on the books as of May 31 represented 63 percent of the total reservation business recorded in 2015. Revenue is increasing, too. As of May 31, Vail lodges had commitments for more than 71 percent of their 2015 revenue.
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Vail is also outpacing the industry as a whole in terms of average daily rate charged by lodges.
In fact, rates have increased faster than occupancy for a couple of years now, Garrison said, adding that he doesn’t think that to continue much longer.
“It would take a lot of demand to maintain that growth,” Garrison said.
At this point, demand seems to be outstripping supply, especially with the lodge at the Arrabelle at Vail Square and Cascade Resort both closed at the moment.
Council member Jenn Bruno asked Garrison if it’s possible that rising rates will at some point drive guests away.
Garrison said the problem is that as occupancy goes up, prices rise. Given there isn’t any new supply of rooms on the horizon, price could be a problem. On the other hand, resorts can focus more on spring and fall seasons, when occupancy is low.
Still, he added, Vail’s position in the industry, both winter and summer, gives it the ability to charge more for its product and increase prices more rapidly than occupancy grows.
Evolution of Recreation
Beyond supply and demand, Destimetrics is tracking other trends, including the evolution of recreation in mountain resorts.
Skier and golfer numbers have been flat for some time, Garrison said, adding that resorts shouldn’t rely on those “legacy attractions.”
Other shifts in consumer trends include the facts that there are more leisure than business travelers for the first time this summer. There are also more Millennial-generation people alive today than Baby Boomers, which used to be the nation’s largest demographic group.
Those changes are going to affect who comes to Vail, and when.
As Baby Boomers and the slightly younger Generation X retire or no longer are tied to the school calendar, they can travel at different times. That’s helping spring and fall visits.
Then there’s the fast-growing rent-by-owner market.
“We’re challenged to understand this industry,” Garrison said. “It’s hard to quantify, but too big to ignore.”
The impacts of the rent-by-owner market are decidedly double-edged, Garrison said. The good news is that rent-by-owner units help increase the supply of short-term lodging. On the other hand, those units are usually taken out of the pool of long-term rentals, exacerbating the valley’s housing shortage.
While there are changes on the horizon for both summer and winter tourism, Vail Mayor Dave Chapin noted that Vail remains in a good position compared to the rest of the western mountain resort business.
“Everybody’s chasing us,” Chapin said. “The industry’s growth is an indicator of our success.”
And, while Garrison urged Vail officials to keep an eye on changes in the tourism business, he agreed that Vail is in a strong position in the industry.
While occupancy can rise or fall depending on weather, events and other factors, Garrison told town officials that “in periods of peak demand, you’re still pretty much full.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com or @scottnmiller.