Participating properties in nine Southeast destinations across five states comprising South Carolina, Alabama, Georgia, Florida, and Virginia are already off to a strong start for the winter season.
In the most recent report released by Inntopia in their DestiMetrics* Monthly Market Briefing, aggregated data revealed that as of Oct. 31, aggregated occupancy for the winter season (September through February) is up 9.1 percent compared to the same time last year.
The Average Daily Rate (ADR) edged up 3.2 percent for the same year-over-year comparison and is showing rate increases in four of the six winter months. Only November and December are showing rate slippage with a 3.9 percent dip for November and a scant 0.2 percent slip in December. The combination of higher occupancy and rates is delivering a strong 12.6 percent gain in revenue for the six-month winter season.
Bookings made during the month of October for arrivals in October through March were also up appreciably compared to October 2017. Bookings made in October for arrival in that month (short-term booking pattern) are up 32.6 percent, while November arrivals are up an impressive 36 percent. These spikes are due in large part to a slower booking pace last year following the Fall 2017 storms. However, October bookings for arrival in the remainder of the winter months were down with January off by 39.7 percent and February down 8.1 percent.
The Briefing noted that there were some anomalies in the occupancy figures and rates following the hurricanes in regions that were most affected. These variations are most likely due to units being used temporarily to house people in the region that have been affected by the storm or are part of the recovery process. Other units were unavailable for rental as they were damaged and undergoing repairs. Although this atypical usage of lodging units skewed the results somewhat, the numbers were not significant enough to substantially change the report and its monthly findings.
“With a total of 15 named storms and eight hurricanes, two of them major, the season has been fraught with challenges for the lodging community in the Southeast,” reported Tom Foley, senior vice president for Business Intelligence of Inntopia. “While many destinations felt they dodged some bullets this year, the impact of the two major storms, particularly Michael in the first half of October, have been locally significant. The extreme damage in parts of the Florida Panhandle will require years to recover in some cases,” cautioned Foley.
While calm weather and pleasant temperatures play a crucial role in the success of the season, a strong economy is also vital. So, DestiMetrics tracks and assesses key market indicators to assist properties in adapting to changing economic circumstances.
Employment and job creation recovered in October from a somewhat sluggish September with 250,000 new jobs compared to an adjusted figure of 118,000 in September. Job growth was bolstered by strong pre-holiday hiring that reflects retailer confidence in market conditions. The Unemployment Rate remained at a 48-year low of 3.7 percent while wages were up 3.2 percent—their largest increase since 2009.
Despite the strong jobs and wages report, financial markets were on a roller coaster ride in October with dramatic swings in the Dow Jones Industrial Average (DJIA) which plunged 5.3 percent by the end of the month. Although there were only 10 days of declines, Oct. 10 and 11 posted losses too deep for the market to recover by the end of the month. However, as of Oct. 31, the Index was still 845 points above where it closed on May 1.
Consumers were focused on jobs and wages, leading to the fourth increase in the Consumer Confidence Index (CCI) in the past six months. It gained 2.6 percent over September and reached its highest level since September 2000.
“Consumers are feeling very good about both current conditions and expectations for the months ahead,” noted Foley. “That high level of confidence is essential if lodging properties are to continue with their current rate levels.”
The Briefing also reported that although economic indicators are positive, financial markets are starting to show a few cracks in response to domestic and international concerns about regulations, inflation, interest rates, and escalating trade wars.
“Economic conditions heading into the holiday portion of the winter season are very strong from the consumer point of view, though there are a few signs of change in the financial marketplace that we’ll be monitoring closely,” continued Foley. Overall, the Southeast, like much of the broader travel industry, is benefitting from positive consumer confidence and seeing strong revenue growth through the winter and into the early part of the upcoming summer season. While storms have had a localized impact on travel and tourism in the Florida Panhandle, the majority of the region has not been severely impacted and is actually now in a better bargaining position with consumers than last year at this time,” Foley summarized.
Originall posted by Inntopia; written by Pascale Savard.