Vail Valley summer lodging revenue headed for new record; occupancy flat
By the numbers
0.4 percent: Increase in occupancy across a group of 20 mountain resorts.
7.7 percent: Increase in average daily rate across that group of resorts.
3.3 percent: Increase from 2016 in the town of Vail’s June sales tax collections.
21,808.4: Dow Jones Industrial Average closing price on Aug. 28, down 5.27.
EAGLE COUNTY — This summer is shaping up to set another lodging revenue record in the Vail Valley. But this time, the news is about pricing, not occupancy.
A recent report from Denver-based DestiMetrics, a division of Inntopia, of Stowe, Vermont, has tracked lodging revenue from 20 mountain resorts in eight states. Vail Valley lodges are part of that report.
Across the Rocky Mountain region — Colorado, Wyoming, Montana and Utah lodging revenue for the summer has increased by 8.3 percent from the same period in 2016. That year was also a record.
Ralf Garrison, an adviser to DestiMetrics, said the Vail Valley reflects the trends seen in the broader resort region.
“With the trends we’re experiencing this summer, we’re seeing only nominal variations between resorts,” Garrison said.
That trend shows overall occupancy flat or down slightly compared to 2016, with increased revenue coming almost entirely from higher rates.
‘matches what we had last year’
Avon Comfort Inn general manager Rich ten Braak said that’s what’s been happening at his hotel.
Occupancy, he said, “matches what we had last year,” ten Braak said. “Our growth is coming from rate.”
That growth can be seen in the town of Vail’s most recent sales tax report, covering sales in June. For that month, revenue, driven primarily by lodging taxes, grew 3.3 percent over the same month in 2016.
The Vail Valley Partnership, the valley’s chamber of commerce, tracks lodging data for Vail, Avon and Beaver Creek. Vail Valley Partnership CEO Chris Romer said the entire valley has seen the flat-occupancy, increased-rate trend.
That occupancy news comes even as two of Vail’s larger hotels — the former Cascade and former Holiday Inn — continue with renovation projects that have kept those rooms off of the market for two summers. Both are expected to reopen under new names in October.
Garrison said supply and demand are fueling the growth in rate across the region. That fall off in occupancy often occurs after economic downturns, he added. For ski season, rates grew as occupancy flattened a couple of years ago. That winter trend is now showing up in summer.
While occupancy remains stagnant — and many summer weekends are booked nearly full — Romer said opportunity remains to fill rooms.
One of the most important items is the growth of international visitors for the first time in several years. Romer said roughly 6 percent of the valley’s lodging business in July came from international travelers, including those from Mexico.
Another piece of good news is the breakdown of visits from people driving up from the Front Range.
Roughly 30 percent of visitors have stayed in the valley 10 times or more. That’s a solid base of loyal guests. But, Romer added, about 30 percent of the valley’s summer visitors are first-time guests.
“That’s an opportunity to convert someone to a repeat visitor,” Romer said.
Valley seeing new guests
That pool of potential first-time visitors is also growing. Colorado welcomes several thousand new residents every month, with most of those people settling on the Front Range between Fort Collins and Colorado Springs.
“People want to come to the mountains,” Romer said. Some of those new guests could be destination shopping or attending different events in different resorts.
But from early June through September, people want to see summer in the high country.
For those first-time visitors, Romer said the valley’s job is to create repeat visitors.
“We need to be providing a great experience, great events (and more),” Romer said. “We need to ask how we take away some of the pain points (in parking and transit) and provide a high-level experience.”
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Are we seeing more bears because there are more bears on the valley floor, or because we’re all spending more time at home? It could be a bit of both.