The slumps and surges at western mountain resorts

Occupancy flat but revenue continues to outpace last season

In what is being described as a roller coaster season that started slow, was strong mid-season, and then lost momentum in its final weeks, the 2016-17 ski season will likely record some year-over-year declines by the final tally, recorded through April 30 among participating western mountain destinations.

According to Denver-based DestiMetrics in its Monthly Market Briefing, as of the end of March, aggregated occupancy for the past winter season ­— November through April — is down 0.3 percent, while overall revenue is up 6.8 percent, compared to the same time last year. Four of the six winter months showed increases in occupancy, while November and April were down.

“It has been an unpredictable and erratic season as both the weather and geopolitical forces created some interesting dynamics that shaped destination visitors mountain travel behavior,” observes Ralf Garrison, director of DestiMetrics.

He adds that this season marked the first time in a decade there have been declines in year-over-year occupancy and yet gains in revenue for both the Rocky Mountains and Far West in different months and patterns.

“While occupancy increases have been slowing as resorts approach practical capacity in high demand periods, the increase in rates suggests that demand remains high and skiers continue to demonstrate passion for mountain vacations with their tolerance for increased rates,” Garrison says.

Although some resort communities will continue to host destination guests in April, many areas are closing and ramping down operations so that lodging performance for the month will only have a modest impact on the final season tally. As of March 31, overall revenue has already reached an aggregated 102.7 percent of last year’s total revenue while room nights were at 98.3 percent.

Looking to summer, aggregated overall occupancy is up 1.6 percent as of March 31 compared to the same time last year with revenue up a strong 11.2 percent — a comparable pattern to winter. May and June are currently showing slight slumps while July, August and September are posting strong surges.

In Colorado consolidation news, Aspen Skiing Company and KSL Capital Partners had two major announcements in April: they will acquire Intrawest Resorts for $1.5 billion, meaning Winter Park Resort and Steamboat Ski Resort will have new management starting in the 2017-18 ski season. 

The local companies also announced they will acquire Mammoth Resorts, which owns four resorts in California. The transition should come to a close by the end of September. 

A brief review of key economic indicators revealed a slight dip in the Dow Jones Industrial average of 149 points and the first monthly decline since October 2016. However, the Consumer Confidence Index (CCI) jumped to its highest level since December 2000, swelling 8.2 percent to reach 125.6 points. Employers added an anemic 98,000 jobs in March and the unemployment rate dipped to 4.5 percent although much of that drop was attributed to the unemployed discontinuing their job hunt.

Wall Street is reacting cautiously in the wake of recent national legislative and executive challenges and geopolitical turmoil that may impact the domestic economy,” explains Tom Foley, director of business intelligence for DestiMetrics. “While the market currently remains robust, instability and uncertainty in the Middle East and North Korea along with rising interest rates at home could impact the consumer travel market as events unfold,” he cautioned.

Categories: Real Estate