Lodging industry struggling to predict season
October 28, 2008
It’s been described as a "crap shoot."
This year’s ski season lodging predictions are non-existent. People have stopped predicting. Too many factors are up in the air.
Right now everyone says advanced reservations are down, but does that suggest a slow year? Will it change after the election is over? Will a good early snowfall cure all ails?
John Duvivier, director of sales and marketing with Park City Lodging Inc., said the ski tourism industry is used to dealing with these unknowns. After all, this is a business that relies on the weather for its existence.
The solution may be in figuring out what potential visitors are thinking.
"Believe it or not, vacationing is very psychological," said Thea Leonard, owner of Treasure Mountain Inn.
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For example, a good early snowfall before the resorts even open usually injects consumer confidence in skiers, she said.
As of now, the problem lies in the advanced reservations.
Sarah Myers, marketing and public relations manager for Stein Eriksen Lodge, said reservations made in excess of 90 days are down from last year.
"Early numbers for December through February are definitely off for everyone I talk to," Duvivier said.
Even reservations for the week of the Sundance Film Festival are down, said Kathleen McKenna of Intermountain Lodging and Resort Realty.
A bright spot is the holidays. Some people make coming to Park City an annual tradition and they are reserving early to make sure they get their favorite room or condo.
Leonard said she’s doing great for the premium dates and Thomas Cook, Deer Valley Lodging marketing director, said his bookings from repeat visitors are "solid." He’s seen very few cancellations so his company is feeling good about what they have on the books.
But these kinds of repeat customers usually have enough money to be minimally affected by swings in the economy.
People whose vacation money is more "ephemeral" seem to be sitting on it, Leonard said. Those are the people lodging experts are watching.
Evidence of that, she said, is that her "in-month" bookings are very strong. That means people are booking in October to come in October.
There should be a lot of "pent up" demand for Park City’s product right now, Duvivier said.
People holding off on making reservations isn’t necessarily a bad thing, McKenna said. In-month reservations can be "fun." If profit forecasts ignore them, and plans are made for a slow year, when they come in they’re like a bonus, she explained.
The presidential election is definitely a factor in the psychology of potential visitors.
While not everyone in Park City believes a new president will change the economy to affect this season, many believe tourists are waiting until the election is over to make financial decisions.
"They’re hoping it will be a silver bullet," Leonard said. "We’re kind of screwed right now, and people are hoping we get ‘unscrewed’ and whoever they’re backing has the plan to do it."
Cook pointed out that the economic situation is not going to resolve itself right after the election, but he believes it will still boost peoples’ confidence.
Another factor is airfare and scheduled flights. Park City still has the best proximity to an international airport over any of its competitors, but fewer and more expensive flights will affect tourism, Cook said.
Competitors are also a factor.
McKenna said that Colorado resorts are known for being willing to "cut any deal."
As they’re looking at the same trends Park City is, she predicts they will begin packaging services and amenities. They will respond to this situation by offering discounts. In her opinion, they aren’t as concerned about the "service to value ratio" as Park City.
She says that response can be seen across the board in the tourism industry from sand to snow.
"The vacation business is trickle down. Our competitors already see the problem and have started to move in," she said.
She thinks Park City will need to follow suit, and is already seeing the signs, such as the development of payment cards accepted at numerous locations in the area.
"We’ll have to turn this town into a giant cruise ship," she said.
Snow could be the saving grace. If more lands on Utah than Colorado, Park City could take a larger share of the market. It’s not common, but it’s happened, Duvivier said.
One last silver lining is hiring. Some years resorts struggle to have the necessary staff to guarantee guests a good experience. With a shortage of H2B visas, fewer international workers were allowed this year, Cook explained.
If this season does end up being a little slower, there will be no problem of over-stretched staffs.