Summer accommodation is ending on a high note, but there is still a healthy dose of uncertainty as customers start to book their winter trips.
Latest figures from the hill station region of Destimetrics, part of Inntopia’s Business Intelligence division, show a strong August part of a decline in hotel occupancy throughout the summer from 2021. August bookings vs. 2021 were actually down about 5%, but rate increases of a similar amount resulted in roughly flat revenue.
According to information from Destimetrics, a more appropriate comparison is 2019, the summer before the 2020 COVID-19 pandemic and the 2021 explosion of pent-up demand.
Compared to 2019, the region-wide occupancy rate decreased by 9.7%. But rates have risen more than 36%, good news for accommodation industry revenue.
Destimetrics now measures bookings for the November to February portion of the ski season. The occupancy rate in the region as a whole is down by less than 1% compared to the same period last year.
Jonathan Reap, director of sales and marketing for the Four Seasons Resort and Residences in Vail, said the winter there so far is “going well,” for the first quarter of 2023.
“We feel optimistic,” Reap said.
But there is still a fair amount of uncertainty. The key to this uncertainty is snow, of course. But Destimetrics’ Tom Foley said the success of winter also depends on factors such as hotel rates, consumer inflation and the state of financial markets.
Rates have risen faster than inflation over the past two years. “We’re seeing rate increases of 10-15% over last year,” Foley said, adding that so far consumers seem to be tolerating these rates.
Mark Herron is the local vice president of Guest Home, a luxury home rental company. He is also a member of the Vail Local Marketing District Advisory Board.
Herron said the board recently approved spending more than $100,000 this coming season to promote Vail’s lodging industry. These expenditures are aimed particularly at stimulating occupancy at the start of winter.
Herron said data so far shows Vail’s accommodations are behind last season and occupancy is starting to drop.
Economic uncertainty is playing a role in that decline, Herron said, adding that he wonders if the ski industry isn’t becoming more elite.
With skiing and snowboarding already a middle-to-upper class sport, Herron wonders how much the pricing drives people away. Another complication is the opening up of international travel.
“There are more opportunities for everyone,” Reap said. “We just have to show the value…and why Vail is the best.”
Of course, the price of the pass is excellent
While Vail Resorts’ Epic Pass — currently priced at $879 for an all-access pass — has done a lot to democratize the sport, Herron noted prices are rising for just about everything else.
Additionally, the Epic Pass also created a category of guests that Herron calls the “Snow Hunter,” who check conditions at various resorts before booking accommodation and travel. It’s essentially a reversal of the old model, in which customers booked accommodations, then flights, then lift tickets.
“High net worth” guests and dedicated snow chasers will come, Herron said. And, Reap noted, groups have once again become an important part of the local lodging image.
“The group for next year is looking good,” Reap said, adding that this is how the Four Seasons builds its foundation for a year.
Ultimately, however, the valley’s winter season depends, as always, on the weather.
“Regardless of economic forces, snow is the main driver,” Foley said.