Lodging: summer sizzles, winter’s stable | VailDaily.com

Lodging: summer sizzles, winter’s stable

By the numbers

80 percent: Increase in Vail lodging revenue since 2007.

15 percent: Increase in Vail summer occupancy over 2015.

7 percent: Increase in mountain resort region occupancy for the same period.

19,918: Dec. 23 losing price of the Dow Jones Industrial Average.

VAIL — Rooms can be tough to find on ski-season holiday weeks and weekends in Vail. Tight supply, and strong demand tend to mean higher prices.

While lodging occupancy in Vail hasn’t yet returned to levels seen in the 2007-08 ski season, lodging tax revenue has climbed. And, while summer revenues continue to lag behind winter, that season is growing, and quickly.

Those are two of the main takeaways from a recent report to the Vail Town Council by Ralf Garrison, principal partner in Destimetrics, a Denver-based research firm that tracks lodging in mountain and beach resorts.

For the mountain portion of its business, Destimetrics measures lodging data from resorts around the mountain west, including properties in Colorado, Montana, Wyoming, Utah and California.

In Vail, Destimetrics receives data from 25 properties that manage more than 1,900 units, about half the town’s total.

Throughout the past couple of years, there’s been a drop in the number of Vail units reporting to Destimetrics, due in part to a couple of hotel closings and the rise of condo owners moving their units to rent-by-owner sites such as VRBO.

The drop in condominium properties is significant, Garrison said, primarily because this is the first year there’s been a big enough drop to be significant.

That said, though, the company is still able to track occupancy and rates across a wide variety of properties. And the news from that data is mostly good.

Summer strength

The best news comes from the summer.

Vail’s lodging revenue has climbed more than 80 percent since the summer of 2007, the last summer before a nationwide economic slump.

Vail’s numbers don’t quite match the rest of the industry for summer, which has seen an average summer revenue increase of 95 percent since 2007.

But, Garrison said, that number is somewhat misleading, since most other resorts’ summer occupancy wasn’t as strong as Vail’s to begin with. In essence, Vail has grown from a higher base, he said.

And summer in Vail continues to show strong growth. In fact, the summer of 2016 posted gains in occupancy, revenue and revenue per available room. All of those gains outpaced the rest of the competitive set. Vail’s summer rates have also risen faster than its competition.

What’s helped Vail grow is that summer has essentially split into two seasons, with the growth of adult travel — as opposed to family travel — in September.

“There’s a season that ends July 31, and another that’s growing after that,” Garrison said.

While there’s still room for growth in summer, winter’s revenue growth has come primarily from higher rates.

Vail’s winter occupancy dropped following the national economic slump, and the raw numbers still haven’t recovered. But, Garrison said, Vail’s rates have increased faster than competing resorts.

The winter picture

The winter seems to be shaping up so far as roughly equivalent to last year.

The Vail Valley Partnership, the valley’s regional chamber of commerce, has a reservations division and closely tracks lodging occupancy.

The latest figures from that group show growth over the Christmas holiday season after a dip in reservations a year ago.

Destimetrics tracks advance reservations for both summer and winter. The current reservations on the books are about equivalent to those posted last season. Again, though, rates are up, with revenue per available room rising 9 percent for the season. Across the industry, rates are up 10 percent.

During Garrison’s presentation, council member Greg Moffet asked how Vail’s numbers have been affected by lower-priced hotels leaving the market. The Vail Cascade Resort & Spa is currently in the midst of an extensive renovation and move into the upper reaches of the market. The Vail Holiday Inn has also re-branded.

Garrison said even taking those large properties out of the town’s mix hasn’t really eliminated their impact on average rates.

“Everything’s higher now,” Garrison said.

Which leads back to supply and demand. Garrison said that Vail on weekends tends to run about 90 percent full.

“For all intents and purposes, you’re tapping on the ceiling of capacity,” Garrison said.

With those numbers, it’s no real surprise that January’s reservations are running about even with last season, as are reservations in February. The end of March is more quiet than last season, but that’s because Easter has moved into April.

And, of course, there are wild cards outside anyone’s control, from politics to the economy to, of course, the weather.

But, given the past few weeks, it appears that part of the economic equation is behaving — at least for the moment.

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