Vail winter lodging numbers strong, but not a record
VAIL — After years of rate increases, it looks like mountain resort lodges are easing back in order to keep people coming.
The full-season results are in from the 2018/2019 ski season, and the news is good, with some caveats.
DestiMetrics by Inntopia studies lodging trends throughout the mountain resort industry. A recent release from that firm indicates that western mountain resorts will set new records for the most recent ski season. Those records may come across the industry’s full playing field of occupany, rate and revenue.
But revenue growth has been more modest than it has in the past.
Tom Foley of DestiMetrics said while rates have increased, those increases have been modest, and are almost flat across seasons.
That comes during a season when a strong national economy and good-to-great snow throughout the Rockies would indicate even bigger gains.
In Vail, while occupancy was strong, new records won’t be set. The Vail Valley Partnership tracks lodging in the valley, through its own reservation systems and working with DestiMetrics. Partnership president Chris Romer said the reason Vail won’t set records is that room inventory has increased over the past couple of seasons. That means a higher bar has been set for new records.
Still, Romer said, Vail’s lodging occupancy did increase, adding that the resort almost certainly had as many guests as it ever has, if not a bit more, over the season.
While rates increased slightly in the region, Romer said rates contracted a bit in Vail. Occupancy increases will cover rate declines, and revenue is expected to increase.
The softening of rate increases comes after several years of increasing rates across the region.
“We’ve probably grown rate faster than occupancy for the past five or six years,” Romer said.
More questions than answers
The change seen over the most recent ski season has actually been developing since early 2018, Foley said, but the reasons aren’t clear.
It could be price points — consumers becoming unwilling to pay higher lodging rates. It could be a decline in consumer confidence nationwide. Foley said the Consumer Confidence Index, while still strong, has declined over the past few months. Part of the softening rate could be due to competition.
But perhaps the biggest unknown revolves around the on-line rent-by-owner industry.
Rent-by-owner units have had an effect on the price of professionally managed units, but it’s still unclear what that effect is.
“If a professionally managed unit has been for sale for $1, and a unit is for sale on VRBO for 80 cents, is the professionally managed inventory coming down to match?,” Foley said. The problem, he added, is that it’s still unclear whether rent-by-owner units are putting downward pressure on rate.
Despite the haziness between occupancy and rate, there’s no doubt of the strength of the winter season.
The coming question is what the summer lodging picture looks like.
In a recent presentation to the Vail Local Marketing District Advisory Council, Romer said there’s been a decline in rooms booked in March for occupancy during the summer months.
That decline is significant in some months. For instance, reservations made in March for June arrivals are down more than 63% compared to 2018.
On the other hand, summer guests tend to book closer to their arrival times. Romer said the March numbers for summer account for only about 20% of the summer total. And, he added, the trend is being seen to a lesser extent across the mountain resort region.
“It’s too soon to tell what this really means,” Foley said.
For the past several years, growth mountain resort travel has far outpaced the rest of the economy, Foley said. A slowdown may have been inevitable.
And, Foley added, summer guests are different than winter guests. Rates are lower and lead times are shorter than winter.
While rates may fluctuate a bit, the fact remains that plenty of people are coming to mountain resorts, both summer and winter. That’s a good thing for communities.
And, Romer said, a bit of easing in rate may be better news for the broader resort market.
“Retailers, restaurants, ground transportation… everyone generally benefits from more (guests),” he said.