Mountain resorts on pace for record summer revenue
Participating resorts with Western Mountain Destinations are closing in on another record summer season — defined as May through October — even though, according to the most recent figures available, it’s only halfway over.
Few resorts, if any, will ever publicly release their hotel-occupancy rates. Rather, they guard that information about as closely as they do lift-ticket sales, which are largely treated like a trade secret.
However, Inntopia Business Intelligence is a Denver-based market-research company that’s been hired by a number of resorts, mountain communities and chambers of commerce, just to name a few groups that contract with the firm, to collect lodging information.
Inntopia compiles the data it collects in confidence and, once bundled and indistinguishable on an individual basis, uses it to report back on the industry as a whole.
According to the most recent report available from the market-research firm, aggregated revenues at participating mountain resorts had, by the end of July, already reached 90 percent of the total that was collected throughout all of summer 2016.
The report includes all monies collected through July, in addition to early reservations made through December.
The participating resorts include 20 mountain destinations across eight states with all Vail Resorts’ properties, Aspen, Copper Mountain Resort and Winter Park in Colorado in the mix.
With that, there’s little doubt summer revenue will be at an all-time high when the season comes to an end in October, but that’s only half the story, said Ralf Garrison, an advisor with Inntopia.
“We can talk to you now about how summer is going and where it went,” he said, “but we can also look up to six months in the future.”
And projections suggest the trend of rising revenues will continue, at least, through Christmas. That’s because, in addition to the occupancy rates, the firm also collects bookings made up to six months in advance.
While reservations made at resorts in July for August arrivals were down almost 2 percent compared to the same time last year, August showed promise with a 3 percent increase. Additionally, October is looking like a banner month with a 71 percent increase, and reservations for November (27 percent) and December (0.4 percent) were both up, too.
Spikes in revenue aren’t always tied to increases in occupancy, said Garrison, who explained the increases in summer revenue as simple supply-and-demand.
When the recession hit about a decade ago, he said, resorts saw declines in both occupancy rates and in their average daily rates, or the price of a room.
As the economy rebounded, Garrison continued, both of those figures shot back up, and that’s been true for about the last five years.
“But this summer is markedly different,” he said, adding that “occupancy figures have remained essentially flat while revenue figures continue to climb.”
For Garrison, this likely means the supply of lodging accommodations — the actual number of rooms and beds — at these resorts over the summer months is just now starting to approach capacity and, as a result, prices are rising.
He explained that in terms of a recovery, what typically happens is first occupancy rates rise and later so do prices.
He added that the numbers suggest many resorts are starting to see a “second summer season,” which comes after schools get back in session but before the snow really starts to fall.
While demand seems to be causing prices to rise throughout the summer, both occupancy and prices are showing growth during this second summer season, as evidenced by the dramatic increases in October.
A strong U.S. economy gets much of the credit for the upward trend in resorts this summer, and spikes in the Dow Jones Industrial Average, the Consumer Confidence Index and employment were all referenced as signs of overall economic strength.
“Even though wages and earnings continue to remain mostly stagnant,” said Tom Foley, vice president of Business Intelligence for Inntopia, in a prepared statement, “mountain visitors this summer have shown remarkable tolerance for steadily increasing rates.”
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