SAM Magazine—Winter Park, Colo., July 18, 2022—The booking pace for lodging at Western mountain destinations improved slightly during June, but occupancy is still down compared to both last summer and the pre-pandemic summer of 2019—and bookings remain below the pace of 2021—according to DestiMetrics, the business intelligence division of Inntopia. The DestiMetrics data are based on lodging performance in 17 mountain destinations across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho.

The data show that high inflation, rising interest rates, and declining financial markets are dampening consumer’s appetite for travel, particularly in July and August. Travelers seeking affordability are shifting their bookings to the shoulder season months of September and October, when daily rates are typically lower. Nonetheless, room rates remain strong, and aggregated revenue for the summer season is likely to set an all-time record high.

As of June 30, on-the-books occupancy and reservations for the six months from May through October were down nine percent compared to last year. July and August are showing the most notable drops—12.3 and 17.7 percent, respectively. In contrast, average daily rate (ADR) is up 6.9 percent. The combination of these data points puts aggregated revenue down 2.8 percent compared to last year.

When comparing this summer to summer 2019—before the pandemic threw all comparisons out of whack—overall occupancy and reservations are down 3.5 percent, with declines in May through August but with on-the-books increases for September and October. Daily rates, however, are up 38.7 percent, and summer revenue is up 34 percent from three years ago.

While that sounds encouraging, the booking pace is a warning sign. Bookings made in June 2022 compared to June 2021 for arrivals in June through November were down 27.6 percent. And that was an improvement from the 40.1 percent decline recorded during May. This was the fifth consecutive month of decreased year-over-year bookings. Occupancy is unlikely to match the summer of 2021 if the declines in July and August hold, even if occupancy for September and October is as strong as expected. 

The long-term declines in booking pace clearly show that consumers are pushing back against high rates. However, lodging properties have been maintaining the historically high ADR and are therefore likely to achieve bottom line revenue goals. With less staff available to manage properties at full capacity, this high-rate, lower-booking approach has been successful in the short-term. But economic pressures may exert more pressure on ADR—and on most prices across resorts—in the upcoming months.

Chief among those pressures: The Dow Jones Industrial Average (DJIA) just posted its lowest monthly close since February 2021 and is down 10 percent from June 2021; consumer confidence has hit an 18-month low; and the highest inflation in 40 years is fueling fears of a recession in the next 18 months. Not surprisingly, intention to travel has been declining since January as consumers are redirecting discretionary dollars to food, gas, and household items.

“Declining room nights aren’t a reason to reduce room rates at this point,” said Tom Foley, senior vice president of business intelligence for Inntopia, as overall revenues remain strong. “That said, with current economic conditions and the likelihood of a recession approaching, lodging properties may be forced to lower rates in the coming months. But mountain travel has weathered economic downturns before and performed better than other economic segments in the past, so we’re not being too pessimistic yet.”

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