March lodging bookings cap strong winter, but summer alarm bells are sounding now
Just as morning follows night, ski-resort bookings follow generous snowfall, and the month of March was no exception as widespread and sometimes dramatic snowstorms had skiers and riders eagerly booking end-of-season mountain vacations.
In the process of a bullish booking month for winter reservations, notable deficits that were on-the-books last fall for the full winter season have now been practically erased.
But while lodging properties from 17 mountain communities across seven Western states cheer about a winter that will end with strong revenues and reasonable occupancy — with another month still ahead — the summer season is headed in an entirely different direction.
Data collected through March 31 by DestiMetrics, part of the Business Intelligence Division of Inntopia, revealed some stark declines in on-the-books lodging for the upcoming summer.
Lodging performance in March
Compared to last year at this time, occupancy for March was down 3.3%, while the Average Daily Rate (ADR) was up 2.7%. That minor shift in both variables led aggregated revenues that were down 0.6% compared to March 2022.
Skipping comparisons to the previous two seasons, a look back at March results in 2019 and the last full pre-pandemic season of 2018-19, occupancy was down 2.8% compared to that March while ADR was up 44.8% — much higher than the rate of inflation on many, if not most, other purchases. That huge gain in rates, despite the dip in occupancy, delivered a 41% increase in March revenues compared to March 2019.
Excellent winter gets better
The full winter season from November through April got stronger with the surge in short-lead bookings as snow-chasers booked late season ski trips. As of March 31, actual and on-the-books occupancy for November through April remains down 0.3%, although January is still the only month in the 2022-23 season with increased occupancy.
In contrast to the slower occupancy, ADR is up 6.2% from last winter with increases in every month except November. The higher rates are offsetting the slight dip in occupancy to provide a 5.9% increase in revenues over last year.
“Great snow has offset and even hidden some strong economic headwinds, but as that extra lure melts away with the season — even though it will be extended in some destinations — those headwinds are becoming more apparent, even dire in some situations,” cautioned Tom Foley, senior vice president of business intelligence for Inntopia.
“Beginning in May, occupancy is down sharply, and those declines are extending through September at this point,” he continued. “So, although pent-up demand and abundant snow has been protecting the industry from those economic pressures, those factors are no longer a consideration. Some significant consequences are showing up in the data and we’re seeing the deepest declines since early 2020.”
Summer bookings lag
Bookings for the early summer compared to those made last March for arrival in the same months were dismal with May down 7.4%, June down 11.4%, and July down 17.2% compared to last year at this time.
As of March 31, on-the-books occupancy for the upcoming summer from May through October is down 13.5% compared to last year at this time, ADR is up 6.8%, and revenues, for the first time in many months, are down 7.8%.
Compared to four years ago at this time and looking back at the summer of 2018, on-the-books occupancy is down 9.9% with double-digit declines in the four months from May through August. Despite the decline in occupancy, ADR is up 45.3% compared to that summer and revenues are up 30.7%.
Summer is struggling as a clear and profound downward shift in performance has appeared in most Western mountain destinations. Five of the six months that summer data is available are showing declines in occupancy — starting with a 10% drop for May but as much as 15.5% for on-the books arrivals in August compared to last year at this time.
Length of stay continues to shrink compared to the significantly longer stays booked in 2021 and 2022 and is down 0.13% from a year ago and 0.15 nights from February 2020 just before the pandemic was declared. The drop has been attributed to slackening in pent-up demand, employees returning to their workplaces, and rates remaining historically high. The three elements have combined to shorten the longer stays that surged in the midst of the pandemic.
“A winter season that started with some uncertainty and tepid bookings is wrapping up as one of the best in many years, courtesy of the deep and widespread snow that assures mountain lodging will achieve its second-best revenue season ever and come close to last year’s record,” Foley said. “But the celebration is going to be pretty short-lived as persistent inflation and rising interest rates are keeping the economy fluctuating and consumers edgy about destination mountain travel this summer.”
DestiMetrics, part of the business intelligence platform for Stowe-based Inntopia, tracks lodging performance in resort destinations. Approximately 28,000 lodging units in 17 mountain destination communities across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho contribute to the data pool and represent an aggregated 55% of all available rental units in those regions. Results may vary significantly among/between resorts and participating properties.
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