Occupancy flat, revenues up in western mountain destinations
Home stretch of 2016-17 ski season impacted by snowfall, economy and geopolitics
According to Denver-based DestiMetrics’ monthly Mountain Market Briefing, snow remains in springtime forecasts, however, less than a month remains of the 2016-17 booking season. As of February 28, overall aggregated occupancy for 19 western mountain resorts remains essentially flat, up 0.3 percent, compared to the same time last year.
Alternatively, overall aggregated revenue is up 7.3 percent for the same time period.
“Snowfall and economic/geopolitical forces have been inconsistent this season and we’re seeing inconsistent results as well,” said 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. Revenues in far west resorts are up a slight 1.6 percent while Rocky Mountain resorts are up a strong 7.2 percent."
Data also revealed that 90 percent of all of last season’s business had already been booked or “banked” for this season.
The pace of bookings in February made during the month for arrivals in February through July declined 12.1 percent 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.
Economic indicators remained positive throughout February, with a strong 4.8 percent increase in the Dow Jones Industrial Average and the Consumer Confidence Index (CCI) rebounding from its January dip up to 114.8 points, to reach its peak benchmark since July 2001.
As per Colorado Ski Country USA (CSCUSA), total skier visits at its 22 member resorts for the first period (October 21-December 31) were down compared to the same time frame last year, but still 3 percent over the five-year average.
Employment news was also upbeat with unemployment falling to 4.7 percent based on the creation of 235,000 new jobs while wages increased 2.8 percent compared to last year and 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 2007 that led to the multi-year recession,” reported Tom Foley, director of business intelligence for DestiMetrics.
Indeed, the Federal Reserve raised interest rates March 15. Foley warned it could “cause a temporary pause in consumer spending...” however, “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 summer to come.
As of February 28, occupancy rates followed the winter pattern with May, June and July declining, though August was up significantly.
Strong room rates are expected to drive revenue and overall aggregated occupancy for May through October.
“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,” Garrison said. “While the destination lodging business is largely set, local and regional skier visits can still have a considerable impact during these upcoming weeks.