Western Mountain Destinations Down 16.3 Percent to Date

Press Release

• March 18 2009
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Denver, Colo., March 18, 2009—In the latest data released by the Mountain Travel Research Program (MTRiP)* record-breaking low levels of consumer confidence, increasing unemployment figures, slow consumer reaction to the recent stimulus package legislation passed by the U.S. Congress, and continued declines on Wall Street have been felt in all spending categories including the mountain travel industry.  “Overall demand is down, damaged by the long-term negative market forces,” said Ralf Garrison, who directs the research.

The Consumer Confidence Index dropped 33.7 percent in February to 25.0—its lowest level since it was introduced in 1967. Unemployment figures rose for the third consecutive month with more than 650,000 jobs lost in February for a total of 12.2 million unemployed nationally. The Consumer Price Index was up slightly, 0.4 percent, and the Travel Price Index was down for the fifth consecutive month, a slight drop of 1.6 percent.  Consumers have reacted by changing their spending habits and their reluctance to make purchases has been described as a “destruction of demand.”

These broad economic indicators are having a significant impact on the ski industry and mountain travel destinations. Cumulative occupancy for February 2009 among participating MTRiP resorts* was 54.5 percent compared to 63.9 percent last year; down -14.9 percent.  The average daily rate for the same time period was down -8.6 percent.

Reservations taken in February for the upcoming six months improved slightly, up 3.0 percent over last year’s pace and showing strength for short-term February arrivals.

“At this time of year, booking momentum slows dramatically,” reports Garrison.  “While MTRiP data does not forecast future bookings, we’re not anticipating any significant changes for March or April business despite a recent shift to last minute bookings.”

Looking forward, lodging reservations for March as of Feb. 28 were running significantly behind last year. Occupancy is down -25 percent and daily room rates are down -12 percent.  The combination of lower occupancy and reduced room rates is resulting in less overall revenue to resort communities.  “This reduction in revenue for community coffers is likely to pose a challenge for local government entities in resort communities as tax revenues will be less than budget expectations and there are probably going to be a variety of consequences for local programs and services in the coming months when the shortfalls become apparent,” observed Garrison.

April is currently holding steady with reservations flat (0%) and room rates up 7 percent, primarily because of the Easter holiday falling in April this year instead of March as it did in 2008. This holiday timing partially explains reservation weakness in March and improvements for April this year.

The current tally for the ‘08-‘09 ski season from November through April shows total occupancy down -16.3 percent from last year and the average daily rate down -7.6 percent. Both indicators varied only slightly from last month.  According to Garrison, in direct contrast to occupancy rates, “lift ticket sales are showing surprising resilience, especially at eastern resorts where skiers are staying closer to home and those resorts are pacing close to previous years based on anecdotal reports.”

“The potential for last minute bookings from ‘short-haul’ overnight guests still offers some positive prospects for resorts and lodging properties, but this trend, first observed in December, does not appear to have the same momentum as the season winds down,” reports Garrison. “The good news is that for skiers and snowboarders who love spring skiing, the next four weeks will provide some of the best deals on mountain lodging in more than a decade and those that can take advantage of both the snow conditions and pricing, definitely should,” he concluded.