Although the latest release from the Federal Reserve reported that the "economy is leveling off," data gathered and analyzed by the Mountain Travel Research Program (MTRiP), revealed a slightly different picture in its most recent Monitor. "Neither MTRiP's national economic indicators or the mountain travel indicators currently support the Feds claim," said Ralf Garrison, author of the monthly report. "At best, signals are mixed and positive indicators remain an exception to the rule."
As evidence of Garrison's assessment, the report pointed out that the Dow Jones Index rose 7.8 percent in July while the Consumer Confidence Index experienced a second consecutive monthly decline in July, down 5.5 percent. Another significant travel industry indicator is the Travel Price Index, which tracks costs associated with consumer and business travel and includes fuel prices, room rates, insurance costs, and activity and ticket purchases. It rose two percent in June for the fifth consecutive monthly increase and resulted in an 0.7 percent decline in consumer spending in July.
"Travel prices are 9.5 percent below 2008 levels according to MTRiP comparisons for the past several years, but consumers are showing little regard for year to year variance in price," observed Garrison. "It appears that if demand isn't there, price alone won't motivate travelers, regardless of the discount."
Looking back July's lodging business followed the winter pattern with low volume and occupancy down 13.3 percent compared to July 08 but was slightly better than June 09—down 14 percent. Room rates in July 09 were down 11.3 percent compared to last July. Reservations taken in July for arrivals in July-December were flat compared to reservations on the books last year for the same time period. Short lead bookings in July were very strong with bookings in July/for July up 30 percent compared to July 2008.
However, a downward trend was being experienced for long-lead advance bookings in November and December—those declines were offset by the last minute reservations in July/for July.
MTRiP's analysts noted that the local and regional business continued to fill-in for the weaker national and international business as it did last winter but "the market-driven shift became a self-fulfilling prophecy as destinations moved marketing dollars and promotional efforts to closer, short-term, and more responsive markets."
"Overall, summer business (May–October) continues to show significant declines from last summer with only an incremental boost in July's short lead bookings to signal an improving market or more optimistic consumers," reported Garrison. "To combat the decline in visitors and to provide incentives to prospective guests, destinations continue to decrease rates from last year– up to 21 percent for next December," he added.
The MTRiP Monitor further notes that special events and occasions such as reunions and weddings are the most consistent travel segments, while business group and conference business is down the most. Bargain lodging, campgrounds, and roadside motels were relatively busy while destination condos, especially luxury units, were weakest.
However, Garrison is quick to point out that MTRiP data is an aggregation of a variety of western mountain destinations and does not include the significant differences in reservations among and between mountain resort communities. "The variances are considerable and noteworthy," he emphasizes. The report also cautioned individual destinations, and their businesses, to track their own results carefully since following overall market trends may be counterproductive in some communities.
"The leveling off suggested by the Federal Reserve would be welcome news," concluded Garrison. "From this point, getting reservations up to a flat comparison with last year is an important first step to recovery in time for the all important winter booking season."