Financial roller coaster has yet to impact resort market
America's mountain resorts have yet to feel the impact of the ongoing turmoil in the financial markets. But with plenty of questions remaining concerning the long-term health of the U.S. economy, analysts are cautious as to how winter reservations might look.
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According to the most recent data released by the Mountain Travel Research Program (MTRiP), reservation activity through July 31, 2011, continued to show a solid performance in both summer-to-date reservations and for the upcoming ski season for participating mountain destinations.
July occupancy was up 8.2 percent compared to July 2010 with some of the credit given to the Fourth of July holiday falling on a Monday creating a three-day weekend. The strong results continued the trend of the past six months with occupancy from last February through July up 5.1 percent. The report also noted that average daily rates remained essentially flat for both July and the past six months.
Looking forward, August reservations are up 7.4 percent compared to last August, and reservations for the upcoming six-month period, August through January 2012, are up 4.7 percent.
Although the data is measured and tabulated through July 31, MTRiP analysts conceded that the turbulent markets and economic news had to be factored into this month’s report.
“Our broader market intelligence summary has been usurped by the recent market conditions and the duration and impact of economic fluctuations that can’t be predicted,” explained Ralf Garrison, MTRiP director. “The recent volatility of the market may feel reminiscent of fall 2008 to some consumers, but if market conditions settle down before the winter booking season is fully underway, the impact may be less dramatic.”
Economic markers outlined in the report were moderately positive with the Consumer Confidence Index up 3.3 percent and the unemployment rate only slightly down at 9.1 percent — although considered positive since employers added 115,000 jobs during the month. The negative indicators cited included the Dow Jones experiencing its third consecutive decline — mostly in the last 10 days of July trading — before plummeting dramatically and fluctuating wildly during the first two weeks of August.
“The reality is that the economic situation is much different than it was in October 2008,” said Tom Foley, MTRiP research analyst. “The recent losses pale in comparison to the fallout from the Lehman collapse and while the instability may continue for a while, most experts agree that the Dow dropping to 6,000 as it did three years ago is unlikely to occur. The picture is different this time around and experience is on our side, particularly after the ski industry has weathered the last two years of tough times and uncertainty with relative success.”
The report also noted that on-the-books occupancy is currently up in four of the next six months (August ‘11-January ‘12) and the average daily rate has edged up 2.1 percent for the month of August, marking the fourth consecutive month that mountain lodging properties have experienced an increase in both occupancy and rate.
“Some of the best news is that some mountain destinations are now approaching summer business that matches pre-recession levels,” observed Garrison. “The mountain destinations have proved to be resilient in the past three years so with summer business mostly behind us and the active winter booking season not yet in full swing, we’re encouraging steadiness and patience and not to succumb to panic.”
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