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DestiMetrics: HOME STRETCH—OCCUPANCY FLAT BUT REVENUES UP IN WESTERN MOUNTAIN DESTINATIONS
Notable decline in February booking pace
Denver — Although there is plenty of skiing and snowboarding yet to come, there is less than a month remaining in the 2016-17 booking season, and as of Feb. 28, overall aggregated occupancy for 19 western mountain resorts remains essentially flat, up 0.3 percent, compared to the same time last year. In contrast, overall aggregated revenue is up 7.3 percent for the same time period. The updated results were provided by Denver-based DestiMetrics* in their monthly Mountain Market Briefing. The data also revealed that 90 percent of all of last season’s business has already been booked or “banked” for this season.
The pace of bookings during February—bookings made during the month for arrivals in February through July-- declined 12.1 percent when compared to bookings made in February 2016. Five of the next six months show significant declines with the exception of April which had a 19.8 percent gain in bookings for that month compared to last year.
“Snowfall and economic/geo-political forces have been inconsistent this season and we’re seeing inconsistent results as well,” reported Ralf Garrison, director of DestiMetrics. “As resorts approach capacity during the height of the season, growth in occupancy has been miniscule while aggregated revenue continues to climb. Revenue in the Far West resorts are up a slight 1.6 percent while Rocky Mountain resorts are up a strong 7.2 percent,” he added.
Economic indicators remained positive during February with a strong 4.8 percent increase in the Dow Jones Industrial Average and the Consumer Confidence Index (CCI) rebounding from the January dip up to 114.8 points to reach its highest benchmark since July 2001. Employment news was also upbeat with the unemployment rate dipping slightly to 4.7 percent based on the creation of 235,000 new jobs while wages increased 2.8 percent compared to last year and finally outpacing inflation.
“Wall Street, employers, and consumers are showing confidence in anticipation of the proposed easing of restrictions that were put in place after the failure of several major financial institutions in 2008 that led to the multi-year recession,” reported Tom Foley, director of Business Intelligence for DestiMetrics. “Although we expect the Federal Reserve to raise interest rates in March which could cause a temporary pause in consumer spending, if wages continue to grow at or above the inflation rate and confidence remains high, consumers will continue to make discretionary purchases including travel.”
The monthly Briefing also provided updated information on business on the books at mountain destinations for the upcoming summer. As of Feb. 28, occupancy rates are following the winter pattern with May, June and July each declining while August is up sharply. Strong room rates are driving revenue and overall aggregated occupancy for May through October is up a slight 1.8 percent and revenues are up a healthy 12.1 percent.
“Combined market forces, political shifts and weather anomalies have all had an impact on this season’s performance resulting in a slow start, strong mid-season growth, and signs that the end of the season is slowing considerably as resorts focus on March visits, school breaks, and a late Easter,” continued Garrison. “While the destination lodging business is largely set, local and regional skier visits can still have a considerable impact during these upcoming weeks,” he concluded.
*DestiMetrics tracks resort performance in mountain destinations, compiling forward-looking reservation data on a monthly basis and aggregating and reporting the results to subscribers at participating resorts. Data for western resorts is derived from a sample of approximately 290 property management companies in 19 mountain destination communities, representing approximately 30,000 rooms across Colorado, Utah, California, Nevada, Oregon, Wyoming, and Montana and may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.