Valley lodging revenue may set new record
By the numbers
96.4: Consumer Confidence Index as of Feb. 24 — 100 is seen as a sign of real economic strength.
18,209: Feb. 24 closing level of the Dow Jones Industrial Average.
16,207: Closing price of the Dow Feb. 24, 2014.
269,000: Average U.S. monthly job creation since January, 2014.
EAGLE COUNTY — It’s been nearly a decade since the Vail Valley’s last boom went bust. But this winter may be the season the valley’s lodging industry sets a new high-water mark.
According to the latest report from Destimetrics, a Denver-area consulting firm that tracks resort lodging data, the 2014-15 ski season may end up as the best yet for the lodging business, finally surpassing records set in the 2007-08 ski season.
According to the report — which tracks lodging data from resorts around the Mountain West and California — lodging revenue as of Jan. 31 was already at 97 percent of the total for the entire 2013-14 ski season. That figure includes “in the bank” lodging (people who have already come) and “on the books” (rooms that have been reserved).
Given that there are weeks left in the ski season, and not all rooms are reserved, Destimetrics director Ralf Garrison said it’s almost certain that the resort business measured by his company will set a new revenue record this season.
The Destimetrics report didn’t include Vail-specific numbers, but the company has done research for the town of Vail for a decade. Garrison’s report to the Vail Town Council several weeks ago indicated that Vail’s lodging trends were running slightly ahead of the regional industry.
Garrison said there are several reasons for the increasing strength in the resort lodging business, including a strengthening national economy and, of course, snow.
TYPES OF GUESTS
The Vail Valley has a few kinds of guests, broken down mainly between “destination” visitors, those who fly in and stay for several days, and in-state visitors.
Destination guests are the most valuable, since they stay longer and spend more money while they’re here. Garrison said those guests tend to book their vacations months ahead, so they are less attracted by snow. In fact, Garrison said, less-than-ideal snow often leads to more shopping.
In-state visitors are usually more snow-driven, and will come when the powder is more fresh.
Snow affects destination visitors, but often it’s last year’s snow that draws advance bookings.
Robert Purdy, general manager of the Park Hyatt Beaver Creek, said the “snow equity” from the past couple of seasons has helped bookings at that property.
Purdy said the Hyatt is right on track with the overall Destimetrics prediction.
“We expect (2015) to be the best year this hotel has ever seen,” Purdy said.
Purdy said the Hyatt has done well with both destination and shorter-stay guests. This season has also marked something of a return from groups, both in and out of ski season. The 2015 FIS Alpine World Ski Championships actually helped group business, since the hotel was able to shift many groups from the first half of February to either earlier or later dates.
In an interview for another story, Mark Herron, general manager of the Four Seasons in Vail, said that hotel had also moved groups into January or March to accommodate the World Championships. Herron, too, said the hotel he runs is on track for a successful season.
At the Sitzmark Lodge, one of Vail’s older, smaller hotels, general manager Jeanne Fritch said that property was also on pace for a good season, despite a slower start to December.
The Sitzmark, along with the town’s other older hotels, once depended on seven-night ski season bookings. Those days are long gone, replaced by four- or five-night stays from destination guests.
Those days may be coming back, the result of what Garrison called increasing demand for a static number of rooms in Vail. But that hasn’t happened yet.
Fritch said the hotel has a few weeks in its season in which minimum stays are imposed, but nothing like the past. But, she added, the hotel this season has raised its prices for the first time in several years.
That’s called “pricing power,” when demand allows suppliers to increase prices. That’s working in Vail, so far.
Fritch said she’s a bit concerned about participation levels in both skiing and golf, but Garrison said trends at the moment favor resorts such as Vail and Beaver Creek.
“The only segment of the population increasing its participation (in skiing) is the affluent segment,” Garrison said. “That bodes well for luxury resorts.”
For the moment, the solid trends are holding. But some disaster — most likely somewhere besides the valley — could easily throw a wrench into the machine that’s running smoothly right now.
“The discretionary consumer is very fragile,” Garrison said. “But the economy looks favorable right now.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com or @scottnmiller.