Winter reservations dip represents small sample
By the numbers
14.9 percent: Increase in September occupancy in mountain resorts.
22.7 percent: Increase in revenue for the same period
1.1 percent: Decline in long-range winter bookings as of Sept. 30.
2.1 percent: Increase in revenue for the same period.
EAGLE COUNTY — A record-setting summer in the area’s lodging industry isn’t yet carrying over to winter bookings.
A recent report from Destimetrics, a Denver-based consulting and analysis firm, shows a slight dip in winter bookings reported as of Sept. 30. That dip is just 1.1 percent from the same booking period in 2014. It also represents a very small portion of the ski season’s overall business.
That relatively small number is why the news from the latest report is being greeted more with raised eyebrows than a sense of alarm.
There’s also the fact that reservations for the coming ski season are being measured against the 2014-15 season.
“That was a very strong season, almost anomalously strong,” Destimetrics Director of Operations Tom Foley said. “We need to keep that in mind.”
DATA SKEWED BY CHAMPIONSHIPS
The dip in Vail Valley reservations from people who book months in advance looks particularly acute for February. The 2015 numbers — again, for rooms booked by the end of September — were skewed dramatically because of advance reservations for the 2015 FIS Alpine World Ski Championships. That two-week event required advance bookings of hundreds of rooms for athletes, coaches, media and others.
On the other hand, the dip in well-in-advance reservations is being seen across the mountain resort market.
“I’d be more concerned if it was just us,” Vail Valley Partnership CEO Chris Romer said. “In this case, we’re special, but not unique.”
Despite the dip in winter reservations at the moment, two of the valley’s bigger hotels are reporting solid early-season business.
“It seems like we’re a little ahead of last year, especially in December,” The Westin Riverfront Resort & Spa Director of Rooms Mark Hughes said. “As of the end of October, we’re in slightly better shape than last October.”
And, Hughes said, the hotel is expecting to see a boost in revenue in the coming season since guests who aren’t part of ski racing’s traveling circus and who don’t travel with their own chefs and trainers are more likely to use The Westin’s spa and restaurants.
Scott Gubrud, director of sales and marketing at the Four Seasons Resort in Vail, told a similar story. Decent business in November and December, but, early on, a dip in reservations later in the season.
Still, Gubrud said, winter revenue so far at the Four Seasons is about even with the same period in 2014, based on slightly higher rates.
In fact, the average daily rates reported to Destimetrics have grown by 2.1 percent even as occupancy has dipped.
Again, the current numbers represent a small slice of winter business. But, Romer said, lodges making up for lower occupancy with higher rates can’t be sustained.
“The healthy growth model is growing both occupancy and rate,” Romer said. “That’s a sustainable way to increase visitors and the bottom line.”
THEORIES ON THE DIP
While the current dip in reservations isn’t creating a lot of concern. It is prompting people in the travel industry to try to analyze just what’s happening.
Romer speculated that the dollar’s strength against most foreign currencies could be affecting reservations. And, as of the end of September, other economic factors were at play.
Foley noted that U.S. stock markets had back-to-back down months in August and September. In addition, there was political uncertainty due to continued wrangling over the federal budget — along with renewed worries that some sort of government shutdown could be on the horizon. Speaker of the House John Boehner also announced in September he would step down, creating questions about the leadership of the U.S. House of Representatives.
The governmental questions have been largely answered in just the last week, with the likely selection of a new speaker and reports of a likely deal on the federal budget, Foley said.
On the other hand, a Tuesday report showed a five-point drop in the U.S. Consumer Confidence Index.
As ski season draws closer, people in the industry will be paying close attention to economic conditions, politics and, of course, snowfall.
“We need to remember the lessons we learned in 2009 (a national recession) and pro-act accordingly,” Foley said.
At the Vail Valley level, Romer said work will have to include a couple of big items.
First, when a broad market is flat, growth in one area has to come at the expense of another resort. Then, when people do call or go online for reservations, resorts have to make sure they’re converting vacation shoppers into buyers.
“At the end of the day, our community operates better with more people — it’s everything from lodges to shuttle companies to rental shops to restaurants,” Romer said.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org and @scottnmiller.