Destimetrics - February Snowfall Boosts Bookings But Occupancy Not Likely to Recover
Desperately needed snowfall at many western ski resorts during February gave mountain destinations a healthy boost to their bookings for the remainder of the ski season but not enough to deliver a year-over-year increase in occupancy compared to the winter of 2016-17. According to Inntopia in their monthly DestiMetrics* Market Briefing released yesterday, as of Feb. 28, bookings made in February for arrivals in February surged up 15.6 percent compared to last year at the same time. Aggregated occupancy for the month among participating destinations was down 2.9 percent—a marked improvement from the beginning of the month when occupancy was down 4.4 percent. Additionally a 5.2 percent increase in the Average Daily Rate (ADR) yielded a 2.1 percent uptick in revenues for the month.
“The booking pace during February was a complete 180-degree turnaround from the beginning of the month,” explained Tom Foley, vice president of Business Intelligence for Inntopia. “Although the significant snowfall clearly drove considerably more bookings and occupancy during the month, a few weeks of strong snowfall does not make a season. And, while the fresh snow was great for February, it isn’t having much impact on the remainder of the season.”
For the full winter season from November through April, aggregated occupancy as of Feb. 28 is down 2.6 percent compared to last season, a slight improvement from one month ago when the occupancy was down 3.3 percent. Occupancy was down in four of the six months and most notably in December and January. For lodging properties, the decrease in occupancy is being offset by a 3.3 percent increase in the ADR—enough to deliver a minute 0.7 percent increase in revenues in a year-over-year comparison to last winter.
Strong and steady economic indicators are getting credit for lending stability to lodging revenues in this low snowfall season. Although the Dow Jones Industrial Average experienced some volatility during the month and posted a 4.3 percent drop during February, it remains 20.3 percent higher than February 2017. Despite the swings in some of the market indexes, the Consumer Confidence Index (CCI) rose a sharp 5.2 percent to 130.8 points and its highest level since the end of the Clinton Administration in November 2000. Employers added a dramatic 313,000 new jobs that was well above the 200,000 jobs projected and for the fifth consecutive month, the Unemployment Rate remained unchanged at 4.1 percent. However, wage growth stalled in February after posting some gains in January.
“Consumers appear confident that the economy will sustain its strong expansion in the months ahead,” reported Foley. “Increases in interest rates are expected to keep inflation in check but with such strong economic fundamentals, discretionary spending on travel is likely to be unaffected by market fluctuations,” he continued.
A Brief Look Forward
The monthly Briefing also revealed an early look at the upcoming summer for mountain destinations. Bookings made in February for arrivals in February through July are up six percent driven largely by the much-needed snow that arrived in time to boost February occupancy but there was also positive news for upcoming warm weather months. May bookings are up 8.5 percent while July is up 8.7 percent as of Feb. 28. However, April bookings have dwindled in recent weeks from a positive 6.9 percent gain as of Jan. 31 to a mere 1.4 percent gain at the end of February.
“Different segments of the mountain destination market will have varying degrees of success in these conditions and although low snowfall is hardest on slope operations such as lift tickets, rentals, and lessons, other businesses may be less negatively impacted from the low snow,” clarified Foley. “Retailers, bars, restaurants, and non-ski activities may remain flat or in some cases, post some gains,” Foley concluded.
DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks lodging performance in resort destinations. They compile forward-looking reservation data each month and provide individualized and aggregated results to subscribers at participating resorts. Data for western resorts is derived from a sample of approximately 290 property management companies in 20 mountain destination communities, representing approximately 30,000 rooms across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho an may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.
