Summer lodging rates up slightly this year
August 16, 2011
ASPEN – Doom-and-gloom economic news pouring out of Washington, D.C., Wall Street and elsewhere this summer have yet to affect Aspen-area visitor bookings adversely, according to tourism industry observers and their data.
A recent report from reservations firm Stay Aspen Snowmass shows that May-to-July occupancy rates in Aspen are slightly ahead of last year’s three-month pace, rising from 47.4 percent to 48.9 percent. Average daily rates of $265 for overnight stays are the same as they were during the same period last year, the data suggests.
Meanwhile, figures from Snowmass Village indicate a mix of good and bad news, with summer’s May-to-July occupancy climbing from 22 percent in 2010 to 26.5 percent this year but rates for overnight stays falling from $115 to $109.
July occupancy was down slightly in the Aspen market – a result of earlier dates for the Aspen Ideas Festival – but significantly higher in Snowmass. Still, 71.2 percent of Aspen’s rooms were booked last month, a number that Stay Aspen Snowmass President Bill Tomcich calls healthy.
“The Ideas Festival started at the end of June. That actually helped to propel June, made it look a little better than it would have been, but kind of let the air out of July,” he said.
Based on reservations through July 31, August is shaping up to be a solid month, with bookings of at least 50 percent occupancy in Aspen and 26 percent in Snowmass. Those numbers are likely to climb as the month continues, given the expected throngs of visitors coming to the area for the second stage of the inaugural USA Pro Cycling Challenge. The professional men’s bike race drops into town from Independence Pass on Aug. 24, and should put a lot of heads in beds in the days surrounding it – although a lot of those rooms are expected to be secured at the last minute.
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Tomcich said the downbeat economic forecasts and political wrangling in Washington have yet to impact local tourism.
“Surprisingly, there is no evidence of that yet,” he said. “I have to admit I am surprised, because there’s a lot of bad news out there. I can tell you on behalf of Stay Aspen Snowmass, our future bookings [for later this year] are holding their own. But it’s too early to track a trend as it relates to this.”
Winter bookings for lodging don’t pick up until after Labor Day, Tomcich said. By late September, officials will have a clearer picture of what’s in store for the 2011-12 ski season.
“The numbers we’re seeing are certainly encouraging, but it’s too early to get excited,” he said.
Hoteliers have been lowering rates since the recession began in earnest in fall 2008. Tomcich said he doesn’t see any relief in sight that would allow lodging companies to raise its rates.
“It’s a lot harder to bring the rates back than it is to drop them,” he said. “I can tell you there are some properties that have tempted to strengthen the rates, and they haven’t been successful in doing so and they’ve lost volume because of it. It’s a real challenging environment where the properties don’t have a great deal of pricing power, as they would wish.”
Should occupancy rates rise in a more consistent manner, Tomcich added, higher prices for rooms likely would follow.
But the national and worldwide economic uncertainty, which has intensified in recent months, threatens to stall the local progress of the last year.
Ralf Garrison is director of the Denver-based Mountain Travel Research Program (MTRiP), which analyzes data from a sample of 265 property management companies in 15 mountain destination communities across Colorado, Utah, California and Oregon. He said he advises tourism-based businesses to “keep their hands on the tiller” without panicking over economic conditions.
He also suggests that they continue to use creative marketing methods to bring in extra business.
“Reservations on the books for the balance of the summer and well into the winter look just fine,” Garrison said. “Of course this most recent economic news only surfaced in its most intimidating way within the last 10 days or so.” He was referring to wild stock market fluctuations in the wake of the political debate over raising the federal government’s debt ceiling.
Garrison said it’s impossible to predict what will occur within mountain destination economies over the next few months and into the winter ski season. “There are so many economic variables in the global economy, but what we do know is that consumers don’t like uncertainty,” he said.
“There’s a significant amount of uncertainty that finds its way into hesitancy, especially when consumers are facing discretionary spending decisions,” such as whether to spend money on vacations, Garrison said.
He said the recent Wall Street volatility might remind consumers of fall 2008. But if market conditions settle down before the winter booking season is fully under way, the impact on resort destinations won’t be so bad.
“The reality is that the economic situation is much different than it was in October 2008,” said MTRiP research analyst Tom Foley. “The recent market losses pale in comparison to the fallout from the [Lehman Brothers investment bank collapse] and while the instability may continue for a while, most experts agree that the Dow dropping to 6,000 as it did three years ago is unlikely to occur.
“The picture is different this time around and experience is on our side, particularly after the ski industry has weathered the last two years of tough times and uncertainty with relative success,” Foley added.