by Taylor Damonte, Ph.D., director of the Clay Brittain Jr. Center for Resort Tourism, and Gary Loftus, director of the Grant Center for Real Estate and Economic Development, E. Craig Wall Sr. College of Business Administration, Coastal Carolina University
Along the Grand Strand, tourism forecasters often look to the relative strength of lodging industry performance during the spring season as a potential leading indicator of the relative strength of the summer tourism season.
“However, the relationship between spring travel demand and summer travel demand may not be that simple. ”
Transient lodging occupancy and pricing for the period between Presidents Day and the motorcycle events of May for each of the most recent six years are recapped in the table below.
During the early spring season of 2018, average occupancy for the centers’ voluntary sample of nightly rented hotel, condo-hotel and campground units declined by 4.2 occupancy points,
or 7.1 percent, compared with the early spring tourist season of 2017. During the same time, the average daily rate declined by 2.2 percent, driving revenue per available room down by
9.3 percent. Based on the scientific random samples that center researchers observe of weekly rented vacation rental properties advertised on the internet, the level of reservations in the
VRP segment this year increased by 1.4 occupancy points, or 2.6 percent, compared with the early spring season of 2017. Average advertised price per bedroom decreased by 6.5 percent compared with the equivalent period last year, which would drive revenue per available unit down by 3.9 percent.
“ So, forecasters may want to reference their average occupancy rates for the spring season of 2013 and 2016, and for comparison, reference the relative strength of their summer seasons during those years. They may find that the summer season during those years turned out to be solid after all.”
Again, some researchers use the relative strength of the early spring tourist season as a leading indicator of the strength of the future summer season. The logic is that if families have sufficient disposable income to travel, and confidence in their future spending ability, then they are also likely to travel during the summer. However, the relationship between spring travel demand and summer travel demand may not be that simple. This is partially because where the Easter and Passover religious holidays fall on the calendar can also have an impact on the strength of the spring travel season overall. Consequently, it may be important for readers to note that during 2016, and especially during 2013, the Easter and Passover religious observance calendar was very similar to the 2018 religious calendar. If average occupancy during spring is weak, but that weakness is simply due to the religious holidays falling earlier on the calendar, rather than weakness in consumer confidence or travelers’ disposable income, then weak spring occupancy may not be a reliable leading indicator of weak summer travel demand. In fact, pent-up demand for family travel during spring might lead to a stronger-than-expected summer travel season.
So, forecasters may want to reference their average occupancy rates for the spring season of 2013 and 2016, and for comparison, reference the relative strength of their summer seasons during those years. They may find that the summer season during those years turned out to be solid after all. Readers can also find these researchers’ analysis of the peak weeks of the summer season along the Grand Strand during those years in the September 2017 issue of the Grand Strander. The year-to-date results for the most recent five years can also be found in the October 2017 issue.
If you represent a hotel or condo-hotel management company and would like to become a participant in the Brittain Center’s or the Grant Center’s research and receive segment-level results and six-week occupancy forecasts, please contact Taylor Damonte, tdamonte@coastal.edu, or Gary Loftus, gloftus@coastal.edu, at Coastal Carolina University.