Are mountain reservations at a tipping point? | SkyHiNews.com

Are mountain reservations at a tipping point?

Ralf Garrison
Special to the Summit Daily News

Although overall reservations for the upcoming season lag behind last season, the monthly report issued by the Mountain Travel Research Program reported a dramatic 25 percent increase in reservations taken among participating mountain resort communities during October for arrivals between October 2009 and March 2010.

Despite the increase, overall occupancy remains down 11 percent compared to the same period last year. The monthly report, the Mountain Travel Monitor, was released last week and also delivered updates on market trends likely to influence destination skier/rider visits this season.

Reservations are currently down 20 percent in November, 9 percent in December, 6 percent in January, 13 percent in February, 12 percent in March, and 23 percent in April.

The October booking pace reflects a significant increase from 2008 and a modest return to more familiar lead times – but with new patterns. However, consumers continue to show price sensitivity and gains were most notable in the more deeply discounted months of January and February.

The report also provided a retrospective view of the past summer with overall summer lodging (May-October) down 17 percent compared to last year and room rates down an average of percent from the previous summer. During October, lodging occupancy was down 25 percent compared to October 2008 and down 14 percent from September 2009.

A variety of economic indicators are cited in the report as potential influences on the travel plans of destination skiers and riders. An increase in the Gross Domestic Product of 3.5 percent during the third quarter with continued growth expected was one of the most positive pieces of news for the mountain travel industry. The fifth consecutive month of gains in the Dow Jones Industrial Average was also good news, with a 2.1 percent increase during the month of October as well as reaching a new 12-month high.

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On a less optimistic note, the report noted that the Consumer Confidence Index declined sharply in October, decreasing 10.2 percent from September, the fourth decline in the past six months.

The index indicates that consumers are uneasy about jobs and spending and a continued lack of confidence may divert holiday spending away from discretionary travel and into retail purchasing.

The Travel Price Index, an index of costs associated with consumer and business travel, declined 1.7 percent in September led by motor fuel, airline prices, and lodging rates. Our analysis is that prices are stabilizing at lower levels than previous years and providing an incentive for consumers to travel immediately prior to the peak holiday travel season.

News from the economy is definitely a mixed bag this month and many are describing it as better than feared, but worse than hoped for.

Reservations for the coming season are still behind last year and well behind the 2007-08 season so the 25 percent increase in reservations taken in October was very heartening and is the most positive indicator we’ve seen in 12 months.

Despite better overall market fundamentals and a positive upswing in reservations taken in October, it is premature to announce a positive tipping point. A definitive upward trend has yet to be established and it is too soon to assess the role that short-lead bookings will have on the industry’s hoped for recovery.

Ralf Garrison is a co-founder and director of the Mountain Travel Research Project. Data is derived from a sample of 230 property management companies in 17 mountain destination communities across Colorado, Utah, California, and British Columbia.

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