Romer: How summer business is shaping up
On the heels of a wildly successful winter season, ski-centric mountain properties across the Western United States may be seeing a steep slowdown come summer. This is the lead in a recent Travel Weekly article and it sure sounds like the sky is falling and we’re in deep trouble.
While the summer months are showing slowdowns from both the winter season and previous summers, and economic challenges are exerting considerable influence on summer tourism, there is no need for Chicken Little prognostications. Let’s be clear: the sky is not falling, although we should expect a return to pre-pandemic demand levels rather than the growth we saw during the past two years.
So, what should we expect for the summer season?
In layman’s terms: macroeconomic trends show a mixed bag that impacts local trends. Some good, some bad, and lots of unknowns. Leisure travel faces a murky outlook as demand softens and inflation will continue to impact spending decisions.
Starting at a macro level, people like to travel. Eighty-five percent of Americans plan to travel this summer, according to the “Summer Travel Survey & Trends 2023” report by The Vacationer. Nearly half of them (42 percent of all Americans) are planning to travel more this summer compared to last. The 85 percent who intend to travel this summer represent a 5 percent increase over 2022.
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The team at Inntopia tracks mountain travel and macroeconomic trends. They recently reported key indicators including the Dow Jones Industrial Average, which rose during April to close 824 points or 2.5 percent higher than in March. This marks only the second time since November that the Index has managed monthly back-to-back increases while recording the highest monthly close since then.
The Consumer Confidence Index and the Consumer Sentiment Index had mixed results as they flip-flopped and changed directions from last month — and each other. The Consumer Confidence Index dipped down 2.6 percent during April to 101.3 points from the 104 points posted in March and marking the fourth decline since the beginning of the winter season. In contrast to the Consumer Confidence Index, the Consumer Sentiment Index tabulated by the University of Michigan, moved in the opposite direction and rose a modest 2.4 percent to 63.5 points following a sharp decline in March.
The National Inflation Rate edged down from 5 percent in March to 4.9 percent in April, which is slightly better than predicted. This is the 10th consecutive decline in annual inflation and its lowest level since April 2021. But importantly, prices were up 0.4 percent from last month as the Consumer Price Index increased during April, putting some pressure on consumers despite a lower annualized inflation rate.
Eagle County has quite a few things working in our favor. Increasing consumer awareness of environmental issues has led to a rise in eco-conscious travel. Travelers are increasingly opting for sustainable accommodations, choosing eco-friendly transportation options, and participating in responsible tourism activities to minimize their impact on the environment. Vail’s certification as a sustainable destination provides a unique positioning and point of differentiation.
Summer travel is often seen as a birthright. We are seeing a to-be-expected return to pre-pandemic occupancy levels and summer demand; our events calendar remains robust; our brand positioning remains strong; air travel to the Eagle County Regional Airport remains accessible from key markets; and group business provides a solid foundation.
What does it all mean for summer tourism? We’re going to be just fine and can expect a return to pre-pandemic trends, despite the unknowns and uncertainty.
Chris Romer is president and CEO of Vail Valley Partnership, the regional chamber of commerce. Learn more at VailValleyPartnership.com.