Inntopia - Destimetrics: Only Subtle Shifts Happening At Western Mountain Lodging For Holidays & Remaining Season

Daily rates nudged up a bit, occupancy edged down a bit, and despite good snow conditions across much of the western U.S., results among the participating properties in DestiMetrics* 17 regions looked a lot like last year at this time, as of Dec. 31. The latest report released by the Business Intelligence division of Inntopia discussed how November’s lively booking paced slowed down in December as consumer confidence wavered even though widespread snowfall in most regions offered a more enticing on-slope product than last December.

December rates moved up; occupancy slipped

As rates crept up 2.9 percent for the month compared to December 2023, occupancy slipped down 2.3 percent with awkward holiday timing pegged for causing the downturn although lingering price-sensitivity could have played a role according the DestiMetrics analysis. The slight shift led to aggregated revenues that were up 0.5 percent compared to last December.

Remaining months of winter season holding steady

Winter lodging data that included both in-the-bank actuals for November and December and on-the-book reservations for January through April revealed that the full winter occupancy is up a slight 1.2 percent compared to last year with occupancy declining for the first three months of the season while February, March, and April are all posting increases ranging from 3.5 percent for April to a healthy 6.5 percent increase for February.

The Average Daily Rate (ADR) for the winter continues to show little variation from last year with the seasonal average up 1.6 percent with minor gains in five of the six months—and only March showing slightly softening rates.

“Internally, we are describing this month as ‘ho-hum’ but in a good way,” offered Tom Foley, senior vice president of Business Intelligence for Inntopia. “While snowfall has been appreciably better than last year which almost always helps trigger more bookings, there was definitely some wobbling in the economic indicators last month, particularly in consumer confidence, and that can have an impact on the decision to book and at what rate and for the length of stay. So, given that bit of economic uncertainty, we consider the month a ‘win’ for properties as they continue to strategically manage rates to keep revenue positive.”

The economy: some notable backsliding in December

*The Dow Jones Industrial Average (DJIA) dropped a dramatic 5.3 percent in December to nearly erase all of November’s gains while posting only the third monthly loss of 2024– and the largest one since September 2022. Markets were rattled by proposed changes to international trade policy from the new presidential administration; specifically tariffs on imports that may lead to higher consumer prices. Slowing in interest rate reductions also triggered concerns. “Declines on Wall Street can have a significant impact on consumers when they see savings and retirement accounts lose money when market indices are down–and that shakes confidence,” observed Foley.

*The Consumer Confidence Index (CCI) took a sharp dive down in December for a 7.2 percent drop and the largest decline since August 2021 when COVID-19 cases were surging—even with the widespread distribution of vaccines. Consumers cited employment, earnings, and anticipated higher inflation in 2025 as primary reasons for their lower confidence. Participants over 35 experienced sharper declines than respondents under age 35. In contrast, the Consumer Sentiment Index (CSI) from the University of Michigan, edged up 2.2 points although respondents indicated concern over the same issues cited in the CCI. “Declines or gains in confidence have historically been shown to have a significant impact on room rates and travel prices—when confidence slips, so does tolerance for rising rates,” noted Foley.

*The Unemployment Rate finished the year on a high note as it dropped from 4.2 to 4.1 percent with employers adding an unexpectedly strong 256,000 new jobs during December.

By the numbers

Looking at small percentages, the minor upticks and slips seem relatively insignificant. But the actual numbers reveal a more compelling snapshot. Higher rates offset lower occupancy for seasonal bookings made in December. There were 1,610 fewer rooms booked in December for the season but the higher rates translated to an additional $3.8 million in aggregated revenue.

Revenue for the season is also up substantially. There is currently $738.7 million in revenue booked for Winter 2024-25 among participating properties and that represents a $16.8 million increase over last year at this time.

“December was a fairly unremarkable month as rates and occupancy continued to be mostly stable,” Foley explained. “But with widespread and abundant snowfall, we had hoped to see more bookings and occupancy in December, despite the challenges of awkward school holidays which were expected,” he continued. “Great snowfall is always essential for a successful ski and snowboard season and we’re seeing that, but economic indicators and consumer uncertainty are causing a bit of hesitation about bookings as financial markets—and consequently consumers—rethink the short-term outcomes of new economic and political policies,” he concluded.