Summer Occupancy and Revenues Remain Consistent
Tourism remains on pace for record numbers
As of June 30, occupancy for the summer months – May through October – is up 2.6 percent compared to the same time last year with increases in four of the six months – only July and September posting modest declines. Although subtle shifts in economic metrics suggest the potential of a slow-down in bookings at western mountain destinations in the months ahead, aggregated data indicates no change from the strong pattern over the past few months.
"June was a busy month across most of the western region with strong increases in both booking pace for arrivals in June – up 13.2 percent – and increases in daily rates and revenues," reported Tom Foley, vice president of Business Intelligence for Innotopia. "That said, we are starting to detect some subtle shifts in consumer behavior as the economy is poised to react to the reality of international trade tariffs that are just starting to be felt."
The higher Average Daily Rate combined with the bump up in occupancy is delivering a notable 5.3 percent increase in total summer revenues. The latest monthly results were reported July 16 by Stowe-based Innotopia in their monthly DestiMetrics* Market Briefing to participating lodging properties and mountain communities across seven western states.
Strengthening overall summer figures were specific results for June. Actual occupancy for the month was up by 7.9 percent, compared to June 2017. Bolstered by 3.3 percent increase in the ADR, revenues for the month posted an 11.4 gain over last June.
The Monthly Market Briefing also emphasized the potential of economic indicators and geopolitical news on bookings for the coming months. The Dow Jones Industrial Average declined 1.2 percent in June, and marked the third decline in 2018. The Briefing pointed out sharp gains in the first two weeks of June, followed by dramatic declines in the second half of the month and suggested the erratic pattern could have a negative influence on investors, employers and consumers.
The Consumer Confidence Index (CCI) also dipped 1.9 percent in June for the third decline in four months. However, it remains 7.9 percent higher than June 2017 and while consumers may be feeling more cautious, for mountain destinations, there is no evidence that the dip will cause a significant slowing of current steady booking patters. An additional 213,000 new jobs were added in June to sustain the strong job creation trend of the past year. However, the Unemployment Rate rose from 3.8 percent to four percent as an estimated 601,000 prospective workers entered the hiring-friendly job market during June.
"Although unemployment remains 40 basis points below where it was one year ago, there are growing concerns that international trade disputes could have a negative impact on job creation and hiring," cautioned Foley.
A slight cooling in the booking pace was detected in June – possibly sparked by an ongoing drought and high temperatures in much of the West, coupled with more than 60 wildfires creating smoky air quality in some mountain resort regions. While bookings made in June for same-month arrivals was up by 13.2 percent year-over-year, bookings made during the month declined for arrivals in July through September with August down 5.1 percent and September down a troubling 24.5 percent compared to last year.
"While many things remained relatively stable during June, a couple of wild cards still have the potential to change the outcome of the summer season," Foley said. "Indicators through June 30 are pointing to another record-breaking summer is terms of both occupancy and revenues, but concerns are rising rapidly about the impact of international trade wars and their impact on hiring, job creation, consumer prices, financial market stability and consumer confidence.: