SAM Magazine—Winter Park, Colo., Sept. 17, 2024—Lodging properties in Western mountain destinations eased back on daily rate increases over the summer and successfully boosted summer occupancy. The same strategy has sparked a significant boost in early bookings for the upcoming winter. That's the latest news from the monthly Market Briefing from DestiMetrics, the business intelligence division of Inntopia.

Even though the average daily rate (ADR) during August was up 4.8 percent over rates last August, visitors were not discouraged, and August occupancy also rose 4.8 percent. That delivered a healthy 9.8 percent increase in revenues for the month in a year-over-year comparison.

Full summer occupancy was up 3.5 percent over last summer through Aug. 31, while daily rates rose 2.4 percent. September was showing a dip in occupancy—down 1.8 percent—but rates were up. The growth in both rate and occupancy through October projects to a 6 percent increase in aggregated summer revenues over summer 2023.

DestiMetrics data encompass 28,000 lodging units in 17 Western mountain destinations across Colorado, Utah, California, Nevada, Wyoming, Montana, and Idaho. 

“Lodging properties were very strategic in managing rates this summer, with increases staying just below the national inflation rate,” said Tom Foley, senior vice president for business intelligence at Inntopia. “That has been critical to success this year, with consumers continuing to be cautious with their pocketbooks.”

This trend is also holding for winter visits. August’s booking pace jumped 6.7 percent to boost occupancy for visitors arriving from November through February, bringing winter reservations up to a 0.9 percent gain compared to last year—and well ahead of where it was last month, when it was down 12 percent. Large improvements were posted in all four months.

Daily rates are now up a scant 0.5 percent compared to last year for the November-February period; notably, the winter ADR has dropped appreciably since July, when rates were up 6.9 percent. In short: lower rates are attracting increased bookings—particularly in February. As a result, revenue on the books is up 1.4 percent; a month ago, it was down 7.6 percent. 

“This month illustrates a marked shift in strategy from one month ago when cautious consumers were not booking at the same pace as the past few years,” said Foley. “Properties recognized that reticence to book, and have lowered rates slightly—and that has been enough to generate an appreciable uptick in bookings.”

The exception to all this good news regards December bookings, down 8.9 percent in a year-over-year comparison.  An ADR that exceeds $810 per night (up 2.5 percent from a year ago) and an awkward calendar for school breaks this season appear to be responsible for the slower pace.

“The story this month has been all about rate management for both the remainder of summer as well as the upcoming winter,” observed Foley. Managing rates and occupancy has been a delicate balance all summer and is likely to remain so in the coming months.