Lodging industry agrees improvement underway
April 30, 2010
"No pain, no gain" appears to have been the dominating philosophy this last ski season.
Park City lodging experts report experiencing many of the same trends this spring as those outlined in the Park City Area Board of Realtors’ first quarter report.
Realtors said sales were up but prices were down. Hoteliers and property managers said they had success with occupancy, but brought those people in with discounted rates.
Realtors expressed uncertainty about "shadow inventory" entering the market once growth occurs. When those condos are sold and enter the rental pool they’ll likely compete for guests, giving existing lodging businesses cause for worry.
Still, these are all signs of economic recovery following a terrible year for resort communities.
In fact, Ralf Garrison’s Mountain Travel Research Program reported this month that most regional mountain towns saw three consecutive months of improvements over last year.
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Final tabulations are not complete, but for Western ski communities the 2009-2010 ski season ended up 1.3 percent over the previous season. Occupancy in March was up 9.6 percent alone. The increase was likely due to the significant rate cuts, he said in the report.
Advanced summer bookings appear strong as well, the report said.
Park City Municipal’s budget officer Brett Howser said January sales receipts were up 5.8 percent a piece of good news that’s been well reported by Utah media. The city had been down three percent for the fiscal year preceding January.
Even though lower rates are not good for lodging owners, those healthy occupancy levels brought people to town who ate meals, rented skis and bought T-shirts, Howser said.
"The visitor that we’re seeing is more willing to spend money," he said. "People who are coming are not the bargain travelers anymore. They’re more like our old visitor we’re used to getting willing to spend a little more."
Besides, higher occupancy translates to greater demand, which will lead to better rates, he said. Numbers from Garrison specific to Park City suggest every month is improving and July and August are predicted to be 40 percent better than summer 2009.
Because Park City has a wide variety of lodging properties and other businesses serving visitors, the impact of these decreased rates and increased visitation differs greatly.
Alexandra Hynes, spokesperson for the St. Regis Deer Crest Resort, said predictions for summer are very positive.
Like other properties, Hynes said the St. Regis is "maintaining a strong occupancy level in the summer due to its lower rates." Being a wedding destination is attracting guests as well, she added.
Lower rates are not just a compromise; they’re a necessity, explained All Seasons Resort Lodging marketing director Jason Linder.
"It’s a first step," he said.
He believes occupancy levels for Park City will be up 25 percent this summer; but rates will be flat. The market is stabilizing, and that’s positive, he added.
A problem many in the business complained about was snowfall, Linder said. Another shared concern is The Montage opening next winter. It will create a challenge as any gains in occupancy will be split between more competitors.
Budget reductions last year made this season profitable, but it came at a price, Linder explained.
In line with Linder’s prediction, Hotel Park City general manager Guy Morris is predicting summer to be up 20 percent from the previous year. He also plans to report first-quarter profits but cost-saving measures were necessary.
Major lay-offs in 2009 contributed to the current seven percent seasonally-adjusted unemployment rate in Summit County, but allowed lodging companies to have a better season this year.
That’s making it possible for Morris and others in his profession to strategize better for the coming season. Hotel Park City will be looking at improving amenities, he said. Anyone can offer a bed, a shower and a restaurant.
"It’s all about enhancing the experience with amenities," he explained.
He plans to market this summer regionally to people planning shorter vacations. The hotel has also focused heavily on repeat guests.
"We’re turning over new stones to see where else we can attract new customers or remind people to come again," he said.
Morris said he, too, is worried about additional inventory being made available in time for next winter.
"That factor alone isn’t going to help in the short-term. In the long-term it’s great for the destination," he said.
Cindy Galli, director of marketing, for the Best Western Landmark Inn at Kimball Junction, said her property experiences completely different trends than the luxury options.
For example, as travelers demanded lower rates in 2009, the Best Western had a fine year.
But as all other properties slashed rates this last season to comply, her employer had the kind of year all others had 12 months ago.
"We run highest occupancy in Park City," she said. "During the ski season, everyone was vying for the same market we’re back with the rest of the bunch."
Even the St. Regis offered low rates at times, contributing to already stiff competition.
But unlike the St. Regis and other luxury properties, the Best Western will enjoy summer business from the Triple Crown softball tournament as well as a youth soccer tournament coming to town, Galli said.
She also said poor snowfall hurt business and predicts the next ski season to be better if nothing else changes other than more snow.