Destimetrics - Tepid But Solid Finish To Winter Season For Western Mountain Lodging; Summer Looking Cautiously Optimistic
It may have been a bit of a slog across the finish line for some lodging properties at western mountain destinations—although there was considerable variability between regions and properties—but aggregated results among the 17 participating destinations spread across seven states were described as a ‘win’ at the end of a sometimes-challenging season. The conclusion was released yesterday by Inntopia in its DestiMetrics* monthly Market Briefing. Although seasonal occupancy dipped a slight 0.3 percent, the Average Daily Rate (ADR) edged up 1.9 percent and that minor increase offset the lower visitation and delivered a modest 1.6 percent gain in revenues. A similar pattern has emerged for the coming summer as the booking pace dropped for the fifth consecutive month, occupancy for the summer season from May through October is essentially flat compared to last year at this time, but ADR is up 3.1 percent for the season.
“In contrast to the past few years marked by stronger growth, we went into this season with declines in occupancy and only slight rate increases. And then some good snowfall in November coupled with strong consumer optimism following the election and we saw bookings pick up,” recalled Tom Foley, senior vice president of Business Intelligence for Inntopia. “But when December rolled around, unusual holiday timing and some pushback from visitors on rates slowed things down. Through the next few months, uneven snow conditions, decaying consumer confidence, and tariff anxiety slowed things down even more,” he continued. “And in the end, we had a variety of outcomes—from great results at destinations that had strong and consistent snow, to mediocre at others. So, for the industry as a whole to eke out even a small gain in revenues was an impressive accomplishment in this rather challenging season.”
Summer occupancy is flat as daily rates tick up
As of April 30, summer occupancy for the full season from May through October has squeaked out a 0.1 percent increase—essentially identical to last year at this time as the booking pace during April for arrivals for the upcoming months dipped for the fifth consecutive month—down 3.2 percent. Daily rates for the summer months are up 3.1 percent with increases in all six months. Of the three pricing tiers—Economy up to $250/night, Moderate at $251 to $400/night, and Luxury at $401+/night—both the Moderate and Luxury categories are performing well while the Economy-priced sector is faltering.
“It isn’t clear yet whether the weakness in the more affordably priced lodging is because those customers are shifting into a higher-end property or if those customers are staying on the sidelines right now as financial uncertainty persists and confidence continues to shrink,” observed Foley. “But for people who want to take a summer vacation, mountain destinations offer much more attractive pricing during the summer months compared to the winter season except for the peak holiday weekends like Memorial Day, 4th of July, and Labor Day.”
Economic impacts
Financial turbulence sparked by concerns about tariffs and geopolitical dynamics continued during April. After one of its most volatile months ever, the Dow Jones Industrial Average (DJIA) dropped significantly for the third consecutive month and closed down another 3.2 percent by losing 1,332.4 points—on top of the 1,839-point plunge in March. Implementation of stiff tariffs against 75 countries in addition to the blanket 10 percent tariffs on all imported goods earlier in March was cited as the primary reason for the dramatic decline. Counter-tariffs from foreign trading partners, particularly Canada and China also had an impact.
“These steep losses in both the DJIA and the S&P where many consumers have their 401k and IRA accounts is having a profound impact on consumers as these indices are down more than nine percent since the highs in early December,” Foley explained. “The result has brought sentiment to near-record lows and consumers’ expectations for the future to its lowest point since the height of the pandemic. In these conditions booking hesitancy and rate resistance become apparent,” he added.
Once again, both the Consumer Confidence Index (CCI) released by the Conference Board and the Consumer Sentiment Index (CSI) from the University of Michigan declined significantly in April to reach some notable lows. The CCI dropped for the fifth consecutive months, losing 7.9 percent to reach its lowest point since May 2020 with 86 points—just a few weeks after the onset of the pandemic. And for the fourth consecutive month, the CSI plunged eight percent to close at 52.8 and its lowest point since July 2022. Respondents in both surveys across all age, income, geographical, and political segments listed inflation and trade wars as the primary cause for their growing pessimism.
Reports about the Unemployment Rate and jobs were positive in April as 177,000 new jobs were added to payrolls while unemployment remained steady at 4.2 percent. Wages also continued to outpace inflation and were up 3.8 percent in a year-over-year comparison to April 2024. “These figures reinforce the position of many analysts that the core fundamentals of the US economy are strong, but the activities of the Department of Government Efficiency (DOGE) have had a negative impact with an additional 9,000 federal positions being cut in April for a total of 26,000 federal jobs lost since January,” commented Foley.
Keeping an eye on
Bookings from Canada and Western Europe continued to drop sharply for the summer but Mexico is looking strong. According to Inntopia’s booking data, the declines are deepening on a weekly basis and as of May 6, summer arrivals from Canada are down 45.5 percent compared to this time last year as Canadians have had a strong negative response to US trade policy and political commentary. Travelers from Western Europe are also pulling back with summer bookings down 30.3 percent. “European visitors typically go to larger, pure destination markets so declines from this group are more widespread but perhaps less locally concerning than the negative impact of the Canadian downturn,” observed Foley.
In sharp contrast, travel from Mexico is up a dramatic 33.3 percent for the summer due to a combination of easing trade policy for that country and a weakening of the US dollar, making travel to the US more affordable.
Length-of-Stay for upcoming stays by summer visitors is 16 percent longer than the average winter booking this past season with the average summer stay 3.12 nights—appreciably higher than the 2.69 nights for the typical winter stay. Daily rates that are as much as 55 percent less than winter rates, greater flexibility for families with school-age children, and longer lead-times for bookings which correlates with longer stays are all factors for the longer stays. Advance bookings tend to be longer and Foley notes that this gain in length-of-stay could decline somewhat when last-minute bookings are factored into the analysis.
“Despite a wide variety of conditions ranging from epic to difficult across the industry, along with some pretty significant headwinds this winter including financial turmoil, and quirky holiday schedules, mountain lodging properties still managed a narrow increase in seasonal revenues, even with a slight dip in occupancy,” summarized Foley. “But the economic drama that launched in January and looks to continue for the foreseeable future is definitely impacting summer travel plans. As Canadians and Europeans step back in a big way, there is an opportunity to capture more domestic visitors who have indicated they are scaling back international travel plans—but until financial stability returns and consumer confidence rises, it is likely to be an interesting, and potentially challenging summer for mountain destinations,” he concluded.
