Wednesday, September 23, 2009

Green Sprouts?

While destination resort business in August continued the recent pattern of steep year-to-year declines in visits, future reservations for the fall and early winter increased for only the third month of the past 12, signaling a possible turning point for destination travel, according to data compiled by the Mountain Travel Research Program (MTRiP). Data in the next few months will provide more insight into how the travel industry, like the rest of the economy, is adjusting to a "new normal". Year-to-year comparisons are particularly difficult and perhaps misleading at the moment, said Ralf Garrison, president of MTRiP, which tracks destination visits at 216 properties in 15 resort markets in the Western U.S. and Canada. Last August, consumers were less affected by the financial crisis and "were shopping and spending in historically normal patterns", Garrison said. This year, though, in response to the recession and heightened concerns over the economy and job security, "shopping and spending patterns have changed, particularly on discretionary purchases such as leisure travel, including mountain resorts", he pointed out. August occupancy was down 21 percent compared to August 2008 and down 13.2 percent from July 2009. Lodging rates were down 12.6 percent compared to August 2008 and 11.1 percent from July. Overall, summer business (May through October) continued to show significant declines from last summer.On a more positive note, reservations taken in August for arrivals from August through 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); while actual numbers are small, these are the first indications that consumers may be returning to mountain vacations.
What fueled the uptick in advance bookings? During the reporting period, several economic indicators were trending up, led by the stock market 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. However, vacation travel appears to be a lagging indicator. Garrison noted that the reported rise took place at a time when the numbers are low to begin with. The percentage gains seem impressive, but the actual numbers remain small. "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. In addition, these monthly increases are in sharp contrast to recent trends for short-term bookings. Last-minute bookings were strong in July but down in August; they declined 11 percent compared to August 2008.