Destimetrics - Inntopia: Summer Rates Hold Near Records; Fall Bookings Are Strong But Early Winter Currently Sluggish

Aggregated daily rates for the full summer remained near their highest levels ever but occupancy wobbled during August but lower shoulder season rates for September and October prompted a lively booking pace during August for the remaining two months of the season. The DestiMetrics* monthly Market Briefing released by Inntopia last week reported that occupancy for the month of September is now on track to surpass the month of June for the first time ever. Bookings made in August for arrivals in August and the first few months of the upcoming winter retreated as rate pressure for those months became increasingly apparent. Overall occupancy, rates, and revenue gains all retreated slightly during the month, but all remain ahead of last summer. Economic indicators, consumer caution, continued rate sensitivity, and memories of last season’s poor snowfall are all contributing to a slower booking pace for the upcoming winter.

As rates move up, occupancy slips in August

Compared to last August, occupancy for the month was down 2.9 percent, but with the Average Daily Rate (ADR) for the month up a strong six percent, aggregated revenues were up three percent—despite the dip in occupancy.

Overall summer continues to climb

Summer occupancy as of Aug. 31 for May through October stays is now up 2.7 percent with gains in all months except August. ADR for the summer is up a solid 5.5 percent and the strength in both categories is delivering a 7.9 percent gain in summer revenue. The months of May and September showed the greatest improvements in a year-over-year comparison with revenue gains of 12.5 percent for May and a robust 16.5 percent for September.

First glimpse of early winter

Data that are now available for the first four months of the winter season reveal that occupancy for November through February as of Aug. 31 is down 5.6 percent compared to the same time last year with declines in all four months, most notably in December—down nine percent. On-the-books ADR for the four months is up a slight one percent, but a monthly analysis shows that only December is posting a decline in rates—down two percent. The overall slight uptick in rates is currently not enough to offset the drop in occupancy and as a result there is a 4.7 percent decline in early winter revenue.

Even though this is still early in the season, bookings made for winter arrivals during August compared to bookings made last August for the same time, showed sharp declines. The booking pace for November arrivals is down 20.8 percent and for December arrivals are down 28.3 percent.

“With airfares up more than 23 percent and gas up 27 percent, inflation is outpacing wages for the fifth straight month, and that is making getting to the slopes a significantly more expensive proposition than one year ago—before we even factor in the cost of lodging, food, and lift tickets,” reported Tom Foley, director of Business Intelligence for Inntopia.“Throw in a likely interest rate hike this month and it is no surprise that we’re seeing evidence of cautious spending and a focus on value options like fall travel,” he continued. “It is still very early in the booking season but the declines we are seeing at the moment are notable with occupancy declines in all winter months despite daily rates that are practically flat after several consecutive years of very strong growth.”

Mixed economic news

The Dow Jones Industrial Average (DJIA) edged up 1.3 percent in August percent to record its fifth consecutive gain and another all-time high monthly close with a huge spike Aug. 3-6 when tensions eased briefly in the Middle East before losing more than 964 points in the remainder of the month. “Investors turned sour as the month progressed with the likelihood of an interest rate hike in September and renewed fighting in the Middle East contributing to the three-week decline at the end of the month,” noted Foley.

There was good news for both Job Creation and the National Unemployment Rate in August as new job creation was well above estimates with 162,000 new positions rather than the projected 55,000–while also reporting upward adjustments for June (up 11,000) and July (up from a loss of 23,000 to a modest gain of 21,000). With the adjustments, this is the sixth consecutive month of positive job growth. Leisure and Hospitality added 62,000 positions with the majority in the Food & Beverage sub-sector.

Foley clarified that there were some caveats to the positive data. “First, wage growth slowed last month to its lowest level since February 2020 and at 3.1 percent, is below the national inflation rate for the fifth time in the last six months. That puts price pressure on consumers—essentially giving them a wage cut.” He further cautioned that “paradoxically, this strong report could be bad for price sensitive consumers as it could lead to an interest rate hike in September and higher interest rates put further pressure on consumers.”

The Consumer Confidence Index (CCI) tracked by the Conference Board and the Consumer Sentiment Index (CSI)from the University of Michigan both declined by varying degrees in August. The CCI dipped a slight 0.8 percent to 89.4 points and is now a sharp 8.6 percent lower than August. And after increases in June and July, the CSI fell 3.5 points. Respondents in both surveys cited concerns about inflation, pessimism about the ongoing Iran War, and job security. Older generations expressed the lowest scores in both studies but unlike previous months when most the negativity came from Democrats and Independents; those voter groups were largely unchanged while Republican voters were more pessimistic.

The national Inflation Rate and the Consumer Price Index (CPI) were mixed with consumer prices increasing 0.4 points from July while inflation remained unchanged at 3.4 percent–marking the sixth consecutive month that inflation has been above three percent. The high price of fuel is driving higher prices in the wider economy as the cost of getting goods to markets increases, daily commutes get more expensive with gas prices up 27.6 percent, and destination travel is pricier with airfares up 23.4 percent.

Keeping an eye on

• Occupancy booking pace retreated significantly during August and finished the month down 9.4 percent compared to last year. This is the weakest booking pace since the snow drought last March. Overall booking pace for 2026 is down three percent with declines in five of the eight months—due mostly to grim snow conditions last winter. “While snow played a big part in the early booking pace losses this year, rate pressure is the most common explanation for the August numbers with increases in daily rates closely correlated to a slowdown in bookings while lower rates can spark an increase in bookings,” Foley observed.

• August occupancy slumped but fall picked up with the shift to September and October occupancy helping to balance the August decline. August slipped from a 1.5 percent occupancy increase in July to a 2.9 percent loss by Aug. 31. In contrast, September occupancy rose from a 7.6 percent to an 8.3 percent gain while October improved even more and is now up 5.6 percent compared to last October. “The decrease for the typically high-volume month of August was a setback for lodging properties but the strong occupancy growth for the autumn is taking some of the sting out of that loss,” commented Foley. He also pointed out that, “it is clear that consumers are showing signs of value hunting and taking advantage of the less expensive months—also seen in a slight uptick in the length-of-stay for those two months.”

• Late August rainfall eased the fire threat somewhat across wide areas of the West although much of the region remains 25-70 percent below normal rainfall. Wetter conditions can hinder bookings but “also alleviates concerns about traveling to risky fire zones and in fact can boost bookings for visitors pursuing water recreation such as fishing and paddling while setting the tone for improved precipitation patterns for the upcoming winter,” offered Foley.

• International visits nudge up due to an uptick in bookings for summer arrivals from Western European visitors. Bookings from Western Europe are down just 1.8 percent for the summer which is a substantial improvement from the end of July when they were down 9.3 percent. This momentum offset a downturn from other regions. However, Canada is the only one of the four leading inbound markets that is up compared to last summer—gaining 15 percent—a softening from the end of July and about 40 percent below 2024 levels. Tariffs are the leading the cause for the downturn as Canadian consumers (the vast majority of international visitors) actively expand their boycott to US destinations. Recovery of the international market to 2024 levels is unlikely to materialize for at least several years.

• Luxury properties at $401/night and above continue to lead summer lodging performance with gains in both occupancy and daily rates leading to an 11.8 percent gain in summer revenues. Moderate properties at $251 to $400/night are posting smaller gains in occupancy and rates but still recording a 3.5 percent increase in revenues. However, the economy-priced category with rates up to $250/night are struggling with declines in both occupancy and ADR, resulting in a 2.5 percent loss in summer revenue. And for the first time in five months, luxury property customers that had been down-shifting to the Moderate category–strengthening that category–halted that trend, with the share of bookings between Luxury and Moderate properties essentially unchanged from last month.

Early winter bookings are trending down as of Aug. 31. Occupancy for November is down two percent, December is down nine percent, January is down 7.2 percent, and February is down 5.6 percent. “Although still early, concerns about snowfall, the economy, and rate resistance are clearly having an impact on early winter bookings,” Foley confirmed.

“With two strong months still ahead, we’re confident that western mountain resorts will finish the summer with strong revenue, but part of that strength can be attributed to the deferral of mountain vacations from last winter to the early part of this summer,” acknowledged Foley. “We’re happy about the summer’s success but we have concerns going forward about whether that rate strength can be sustained into winter and whether the heavy reliance on the Luxury property consumer is viable going into the more expensive winter months,” he added. “Those concerns don’t detract from an excellent summer, but they are a strategic consideration going into the colder months when rates are an average of 35 percent higher, abundant snowfall is crucial, and the economy is likely to be even more challenging in the months ahead,” he concluded.