IMPACT OF "THE CRASH" ON MOUNTAIN TRAVEL - Rocky Mountain Resort Management™

IMPACT OF “THE CRASH” ON MOUNTAIN TRAVEL

Posted in: Summit County Colorado, Travel News- Sep 16, 2009 2 Comments

IMPACT OF “THE CRASH” ON MOUNTAIN TRAVEL

(A Statistical “Apples to Oranges” Comparison, August Occupancy Down; First Positive Future Reservations Data For Coming Ski Season)

Denver, Colo., Sept 17, 2009—The August summary of the Mountain Travel Research Program (MTRiP) coincides with the one year anniversary of the economic meltdown that impacted nearly every sector of the U.S. economy. A comparison of this year’s data to last year at this time has created an “apples to oranges” comparison that makes meaningful analysis somewhat challenging as the travel industry adjusts, like the rest of the economy to a “new normal.”

“Most economic and statistical tools, including those used by MTRIP, compare the current year to last year and then calculate the percentage change between the two,” explained Ralf Garrison, president of MTRiP and author of the report. “Last August, consumers were unaffected by the financial crisis and were shopping and spending in historically normal patterns but this year, shopping and spending patterns have changed, particularly on discretionary purchases such as leisure travel including mountain resorts.”

Business in August continued the pattern of recent months with low volume and less strength than last year with August occupancy down 21 percent compared to August 08 and was down 13.2 percent from July 09. Lodging rates were down 12.6 percent compared to August 08 and 11.1 percent from July. Overall, summer business (May–October) continued to show significant declines from last summer.

However, reservations taken in August for arrivals in August-January were up 2.1 percent—the first increase in year-to-year comparisons since May 2009 and only the third increase in the past 12 months. There were noticeable increases for September (28 percent), November (26 percent), and December (six percent) and while actual numbers are small, is the first indicator that consumers may be returning to mountain vacations.

The increase is in sharp contrast to recent trends for short-term bookings. Last- minute bookings which were strong in July, were noticeably absent in August, with in month/for-month bookings down 11 percent compared to August 2008.

During the reporting period, several economic indicators were trending up led by the Dow Jones Industrial Average which continued its steady climb since last February (from 7062.93 to 9496.28 on.Aug. 31) with a 3.5 percent for August alone and the Consumer Confidence Index, up to 54.1 compared to 25 back in February—and almost to the same level as last August when it was 56.9.

“While national indicators continue to move in a direction that fosters cautious optimism for the coming season, these indicators point to a future that has yet to materialize in advanced bookings,” Garrison warned.

The report also noted that lodging rates continue to be significantly lower than a year ago as mountain destinations engage in pricing incentives to attract visitors to their destinations. According to MTRiP, discounts range from 4-18 percent with deeper discounts offered during lower demand months. Overall rates for the next six months are down 13.8 percent from 2008-09.

“Last year’s apples were more positive than this year’s oranges and that makes this year’s data look more negative, especially considering that 07-08 was record breaking for most mountain resorts,”

observed Garrison. “But once we get past this “crash anniversary,” last year’s recessed market conditions will be more comparable to this year, and the resulting statistics more valid as a year-over-year indicator– the first real ‘apples to apples’ look at the upcoming season,” he concluded.

*Data is derived from a sample of 216 property management companies in 15 mountain destination communities across Colorado, Utah, California, and British Columbia. Data is representative of a comprehensive cross-section of the community and may not reflect the entire mountain destination travel industry.

© 2009 MTRiP LLC, All Rights Reserved

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