Western mountain resorts are rockin' it this summer
Colorado destinations are enjoying a 19 percent revenue boost over last summer
Boosted by an expanding roster of events, activities and attractions, aggregated summer occupancy for all Western destinations is up 10.5 percent compared with the same time last year, according to the Monthly Market Briefing released by Denver-based DestiMetrics.
In addition to increases in on-the-books reservations for the six-month period from May through October, as of May 31, revenues are up 17.9 percent compared with summer 2015.
Regionally, the Rocky Mountain resorts in Colorado, Utah and Wyoming continue to strengthen their position as summer destinations and are up 11.1 percent in occupancy and 19.1 percent in revenue for the season. The Far West mountain destinations with a well-established summer product at resorts in California, Nevada and Oregon were showing a 4.8 percent increase in occupancy and an 8.9 percent increase in revenues for the summer as of May 31.
“These robust figures are particularly impressive right now because they fly in the face of a softening in key economic indicators including the Dow Jones, consumer confidence and unemployment figures,” DestiMetrics Director Ralf Garrison says. “We’re seeing notable growth in all six months and double-digit revenue growth in May, August and September, which is being driven by increases in both occupancy and daily rates.”
The month of May kicked off what is shaping up to be a strong summer season with a 14.2 percent increase in actual occupancy and a 20.7 percent increase in revenues. The booking pace (bookings made in May for arrivals from May through October) also remained brisk with increases being posted in five of the six months and up 5.8 percent overall.
“While bookings are still going gangbusters and showing impressive strength from now through the fall, we’re feeling a bit cautious as we monitor the softening of the economy and recommend keeping a close eye on some of those indicators that may shift consumer behavior and discretionary dollars over the summer,” Garrison says.
The analysis of key economic indicators in the monthly Briefing reported that the Consumer Confidence Index dropped 1.7 percent from April to May and marked the third monthly decline in the past four months and the sixth in the past year.
“Along with the month-to-month declines, when compared to last year, confidence has been down in every month of 2016 with the last uptick in year-over-year gains posted in December,” says Tom Foley, director of operations for DestiMetrics. “This up and down pattern suggests a possible plateau in confidence and we aren’t sure if that will eventually affect summer bookings or even the more lucrative winter bookings if this vacillating pattern continues,” he added.
The Dow Jones Industrial Average was described as lackluster with few dramatic swings on a day-to-day basis and only a tiny increase of .08 percent for the month, finishing only one percent higher than May 2015. And while the National Unemployment Rate dropped 30 basis points to 4.7 percent during May, the Briefing pointed out that the precipitous decline had everything to do with potential employees dropping out of the job search and therefore were not included in the monthly workforce count. Of further concern was the modest job creation during the month of only 38,000 new positions, which is well below the previous six-month average of 200,000 new jobs/month.
“Although presidential election years typically lead to gains in the financial markets, this year’s unconventional campaign may result in unconventional market performance which could, in turn, impact discretionary spending,” Foley says. “Anemic job growth is becoming the third leg of an increasingly wobbly economic stool and that could soon become unsettling and destabilizing for consumers and investors when combined with flagging consumer confidence and mostly flat markets,” he warned.
“This month’s data is revealing two related stories; very strong mountain summer momentum that is overpowering an otherwise lackluster economy,” Garrison says. “Mountain communities are already seeing significant growth and strength as summer activities get ramped up but the overall economic trends are clearly showing a more pronounced slow down than expected. The election theatrics could also become a potential wild card.
“It looks like the convergence of economic head winds and the undeniable growing popularity of mountain resorts as summer vacation spots is going to make for another ‘interesting’ season for Western lodging properties,” he added.
DestiMetrics tracks resort performance in mountain destinations, compiling forward-looking reservation data on a monthly basis and aggregating and reporting the results to subscribers at participating resorts. Data for western resorts is derived from a sample of approximately 290 property management companies in 19 mountain destination communities, representing approximately 27,500 rooms across Colorado, Utah, California, Nevada, Oregon and Wyoming and may not reflect the entire mountain destination travel industry. Results may vary significantly among/between resorts and participating properties.