Winter Occupancy Gaining Ground
by Karen James
Dec 17, 2009 | 1622 views | 0 0 comments | 23 23 recommendations | email to a friend | print
Room Rate Remains a Challenge

TELLURIDE – Lodging reservations in Telluride and Mountain Village booked during the month of November for the remainder of this ski season increased by 75 percent over last year, opening the door to hope for the possibility of some local economic improvement, according to a consultant who spoke at the Telluride Tourism Board’s annual meeting last week.

“You’re gaining,” said Ralf Garrison, a destination tourism “supply-side expert” and president of the Advisory Group of Denver, Inc., which provides data on mountain destination guests and advance reservation patterns to the TTB, which is also known as Marketing Telluride Inc., and other resorts.

“This is an important indicator of how your season is going,” he continued.

“It appears to be a bigger increase than any other destination, I think,” he said referring to other destination ski resorts.

The swift pace of November bookings means that overall winter occupancy is running about two percent behind last year – a dramatic improvement over the prior month, when occupancy was down 10 percent.

“We’re still behind, but in November a lot of ground was made up,” said Garrison.

“I have no reason to believe that December won’t continue to improve.”

“The numbers are starting to look a little more positive,” agreed TTB Chief Executive Officer Scott McQuade.

“We are clearly going forward and there’s a good chance that we will surpass last winter.”

Still, as the country grappled with the realities of economic recession last winter, destination resorts like Telluride, which saw a 22 percent decline in occupancy compared to its banner 2007/2008 ski season, were particularly hard hit.

“You underperformed the industry,” said Garrison, noting that occupancy was off by about 15 percent industry-wide last year. But, he said: “Your performance with your competitive set was roughly on par.”

While occupancy is showing improvement, room rates have not been so quick to follow, noted Garrison.

“Volume always returns before price,” he said. “Pricing power is not back yet.”

The result, said Garrison, is that “marketeers are having to buy occupancy.”

“The people that are getting occupancy are those that are being very competitive with rate,” concurred McQuade, who put the average daily room rate of $285 per night at 12 percent below last year.

“It’s showing that we’ve found a way to put a compelling offer in front of guests,” said Garrison.

Until demand is such that lodgers can command higher rates, recovery will remain elusive, however.

“Until the teeter totters…we’re in this for the long haul,” said Garrison. “You’d better pack your lunch.”

Lower room rates mean that lodging revenue and associated taxes will likely be down this winter from last, Garrison predicted, but that is not bad news for everyone.

“It bodes well for tourism-dependant businesses,” he explained. Higher occupancy still means there are more people in town spending money, after all.

Asked whether Telluride’s early snowfall and the industry maxim that “snow trumps everything” could explain the fast-paced reservation activity last month, Garrison thought otherwise.

“It’s not so relevant when it comes to the destination traveler,” he said, explaining that destination travelers tend to book early, based upon factors such as a resort’s reputation or a previous visit.

“It’s the perception of snow, not the reality,” he continued. “Snow has a bigger impact on the local and regional market.”

No, Garrison sees a more fundamental shift occurring.

“It shows that the destination guest is beginning to reemerge,” he said. “They are shaking off the most severe impacts of last year’s recession and are feeling more comfortable spending again.”

After coming to Telluride for the past 30 years and speaking at the TTB annual meeting for the past five Garrison, a former marketing vice president at this resort, said he noticed a new kind of atmosphere that could suggest a second major shift may also be taking place.

“I was intrigued by what didn’t happen at this year’s meeting,” he said.

“There was no controversy, no dissident speeches from the floor,” he continued. “It felt like a love fest.”

In the wake of the formation of new Regional Economic Futures Task Force, and its goal to develop an action plan to help stimulate a sustainable, visitor-based regional economy, the “love-fest” reaction could suggest the community is coming to a consensus that the future of the region lies in tourism.

“That sounds reasonable,” said Garrison.

“I don’t think we’re going to get 100 percent of agreement, but I think a majority understands that visitors sustain the economy,” said McQuade, agreeing that community support for tourism seems to be gaining momentum.

“I am hopeful that we will find ways to collaborate, coordinate and have more collective efforts moving forward,” he said.
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