Colorado Resorts Face Deep Revenue Hole as Summer Spending Slows

A 21.9% drop in April revenue. That’s the hole Colorado resorts are digging out of, and it’s not a pretty one.

Travelers are making up for a slow winter season, sure. But don’t let the headline “promising growth” fool you into thinking the wallet is wide open. The data from Inntopia tells a different story: visitors are booking more rooms, but they’re holding on tighter to their dollars.

The winter wasn’t just bad; it was a disaster for occupancy. Rates ticked up a modest 1.2%, but occupancy plummeted 7%. That combination resulted in a 5.9% drop in overall revenue compared to last winter. April alone saw aggregated monthly revenues crash by nearly a quarter across the region.

Now, the pent-up demand is hitting the summer books. Bookings made in April for arrivals through September are up 2.9% in Colorado. Compare that to the western region as a whole, which saw a 9.6% increase. Colorado is lagging. And yes, that’s partially suppressed by a 56.6% drop in April arrivals due to early closures and bad snow.

But here’s the kicker. Average daily rates for summer are up 2%. That sounds good until you look at the broader economic context. The national wage growth rate is 3.6%. Inflation is sitting at 3.8%. A 2% rate increase means summer lodging is actually feeling cheaper than in past years, not more expensive. People are coming because they can afford it, not because they’re splurging.

Tom Foley, director of business intelligence for Inntopia, put it bluntly: “It’s a tough hole to dig out of.”

The math on breaking even is brutal. An average daily rate in summer is only about 60-65% of what it is during the winter. To make up for the winter losses, resorts need 35-40% more bookings. Just to break even.

So, we’re looking at a 10% increase in seasonal lodging revenue for Colorado destinations. May and July are strong, up 17% and 19% respectively. August, the so-called “anti-peak,” is down 1%. It’s a mixed bag.

“The nuance is that summer revenue and winter revenue have to be thought about quite differently,” Foley said. “An average daily rate in summer is only about 60-65% of what it is during the winter, and so the winter losses require, theoretically, 35-40% more bookings to break even for the losses on the negative side.”

Colorado’s gains are slightly soft compared to the rest of the west. The 2.9% booking increase is a far cry from the 9.6% regional average. Locals watching the hospitality sector might see a bump in occupancy, but the revenue per room isn’t keeping pace with inflation.

This isn’t a boom. It’s a recovery from a deficit. And the deficit is deep.

For the folks running the hotels and lodges, a 10% revenue bump is better than the alternative. “Anybody you know who’s keeping the books is going to be happy with 10%,” Foley noted. But it’s not the windfall many predicted. It’s damage control.

The bottom line? You’ll see more cars in the parking lots this summer. You’ll see higher occupancy numbers. But you won’t necessarily see the same level of spending per person. The economy is squeezing the consumer, and that squeeze is showing up in the rate sheets. Resorts are selling more rooms, but they’re selling them cheaper.