July occupancy rates were down, but that’s not necessarily a bad thing | SteamboatToday.com

July occupancy rates were down, but that’s not necessarily a bad thing

The Rabbit Ears Motel on Lincoln Avenue, July 24, 2022. Occupancy rates in July are down in Steamboat compared to last year amid surging gas and other costs.
Spencer Powell/Steamboat Pilot & Today

At the beginning of summer, the Steamboat Springs Chamber anticipated less tourist traffic coming through town — especially from the Front Range — predicting high gas prices and the return of international travel would divert people elsewhere. 

That prediction was accurate.

July, typically one of the busiest months of the year, had unusually low occupancy rates — the percentage of rooms booked in hotels and other forms of lodging.

The adjusted paid occupancy rate for July 2022 was 29%, far less than the 43% rate observed in July 2021. This year’s numbers were better than July of 2020, which saw a 25% adjusted paid occupancy rate, but not by much.

The adjusted paid occupancy rate factors in the number of nights booked compared to the number of nights available, as opposed to the total number of nights in a month. 

“Lodging numbers are falling fast, and the effects of a recession and record inflation are likely reducing demand for Steamboat Springs as a vacation destination,” wrote Robin Craigen, the vice president of the Steamboat Springs Community Preservation Alliance, a nonprofit group who advocates on behalf of short-term rentals, in a press release.

July 2019, the most recent summer not affected by the pandemic, had an occupancy rate of 42% which was almost equal to the mark set in 2021.

The bold line represents occupancy rates in 2022, and the dotted line represents 2021 rates. While occupancy rates in June and August are close to last year, July had a large gap.
Steamboat Springs Chamber/Courtesy photo

The summer of 2021 was busy. International travel was still limited and the demand for outdoor recreation spiked in the aftermath of COVID-era lockdowns and gathering restrictions.

According to the U.S. Energy Information Administration, during July 2021 in Colorado, the average price for mid-grade gasoline was around $3.80 per gallon, while gas prices in July 2022 fluctuated around $5.10 per gallon.

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And according to Laura Soard, the marketing director for the Steamboat Chamber, some of July’s low numbers are by design. 

This summer the Steamboat Chamber unveiled its “Kindness Floats the Boat” slogan, which can be seen on a banner above Lincoln Avenue and many other places. The slogan signals a change in strategy for the chamber in the post-pandemic era: divert resources away from marketing and toward destination management. 

“We saw a lot of people who are new to Steamboat or new to the outdoors,” Soard said regarding the surge of post-pandemic visitors. “We wanted to have a big push on education and being stewards of our destination.”

Soard said the chamber plans to ramp up marketing in the future and believes the emphasis on stewardship will help tourism in Steamboat in the long term by maintaining a large number of what she calls “brand loyalists.”  

Despite such a drastic drop in occupancy, sales tax revenue in June 2022 from lodging and amenities was nearly even compared to last June, showing an increase of about 0.2%. Though fewer rooms are being booked, people are paying more. 

Tom Foley, the senior vice president of Business Intelligence for Inntopia, was quoted in an article by DestiMetrics — a platform which compiles and aggregates data from 17 resort towns including Steamboat Springs.

In the article Foley said decreases in occupancy are always a concern, but the current trend provides reasons for optimism.

“Many lodging properties are still struggling with adequate staffing issues,” Foley was quoted. “So having fewer guests while still maintaining impressive bottom-line revenue makes it possible for lodging properties to do a better job servicing their facilities with fewer employees.”

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