Lodging: Up, Down or Breaking Even?
March 20, 2012
Two trends have defined what Park City will remember about this winter season: weak snow and weak tourism. Even with the late snowfall, industry members believe a full recovery of lost visitor numbers is unlikely.
Lodging numbers, a key indicator of the number of visitors in town, have been consistently down since the ski season began in December, with several weeks falling as much as two percentage points below last year’s numbers. But some in the industry are asking whether it’s fair to compare one of Utah’s record snowfall years to one of its driest.
"This is one of the driest seasons I have ever seen," said Teri Whitney, Park City Area Lodging Association Treasurer and manager of the Snow Flower Condominiums. "I’ve been here for over 30 years and I have never seen a season like this one."
But it wasn’t just Park City that fell prey to a weak start to the season and diminishing reservations. East and West Coast resort towns saw some of the driest weather on record. According to the National Weather Service, Utah’s current season had the lowest snowfall since 1992.
From week to week, this year’s ski season has managed to either break even or fall below lodging numbers from last year, with December 2011 pulling in more than 10,000 fewer visitor nights than the year before.
Tom Folley, an analyst for the resort communities’ market research organization, Mountain Travel Research Program, called the current ski season an anomaly.
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"We have been on the road to recovery and had very good year for the 2010-11 season," Folley said. "The industry held together. Then a snow drought hit."
"What we need to know is how to compare this year against prerecession winter seasons and how far back of a step was taken this year."
Even with last year’s record snowfall, total lodging numbers for the 2010-11 season fell short of one of Park City’s best years in 2007 by more than 190,000 visitor nights. According to pre-recession numbers on lodging collected by the Park City Chamber and Visitors Bureau, lodging hit bottom in 2009 but has been slowly recovering in bed occupancy and average daily rates for rooms.
Folley’s anomaly is simply that recovery was stalled because of an abnormally dry winter season.
"If you look at it in total perspective, it comes down to the economy," said Park City Chamber/Bureau President Bill Malone. "Granted snowfall will have an impact in terms of destination skiing, but when I look at the big picture numbers it’s very clear."
"We’re coming back from our go-go years," he added, "but we’re not quite there yet."
An added strain for lodging is the increasing number of beds to fill as more hotels open their doors in town. Since 2006, 2,000 beds have been added for incoming guests, a fact Malone was not convinced hurt already existing hotels in the area.
"I think we have more people coming as a result of these new properties," Malone said. "Granted you might be slicing the pie into thinner slices for some existing properties and there is more competition in marketplace, but you have more people out there marketing Park City."
Lodging numbers have been up and down this season from hotel to hotel, Whitney said, with certain properties reporting up to 20 percent drops in occupancy.
"That’s tough," Whitney said.
"The snow conditions the lack of them has definitely hindered booking," she added. "People just wait and wait and wait for positive snow reports, and then they end up never booking. They’ll just wait till next year at this point."
While it’s too soon to know with certainty, a handful of factors could be helping incoming revenues from lodging. Occupancy has been slower to recover to pre-recession levels, but the daily average rate has shown healthy growth. Even though numbers are down, overall costs for rooms are on the rise, Folley said.
"Declines in occupancy can be offset by gains in average daily rate," Folley added, "resulting in a counterintuitive net quote up for the town. It’s worth noting that the opposite is true. Increased occupancy at decreased rates can have the opposite effect."