The Town report for February TOT contained the following statement from Finance Director Celia King & Kyle Batista, Financial Analyst, “It is important to view this fiscal year’s collections as abnormal due to the current climate of the travel industry, and the Town will most likely not continue to see TOT collections of this magnitude year over year.” While I agree with the statement, I believe we might be approaching it from two different angles. While the Town is looking at overall collections, I am looking at occupancy and average daily rate (ADR).
TOT revenue for February 2022 was $483,268, the largest revenue for February on record. A 9.7% increase over February 2020. Townwide occupancy was 37%, with an ADR of $854. The ADR for large hotels (over 50 rooms) jumped back up to $1,012 while their occupancy tumbled to 32%. Granted, this is better than the 24% of January, but it is still well behind the industry average, which is well over 50%. Occupancy for the smaller hotels was at 70%, with an ADR of $403.
As everyone continues to get back to travel, more opportunities to travel are again becoming available. Do those who can afford $1,000+ a night get back on a plane to other destinations? Do travelers continue to look for more “different” experiences when they travel? I understand that the owners of hotel properties have seen significant gains in ADR, and once you drop those rates down, it takes time and effort to get them back up. But with these low occupancy numbers, there is still room for revenue growth with some ADR adjustments.
Yountville looks like a Ghost Town on many Tuesdays and Wednesdays, with businesses continuing to adjust to employment issues. Gas, inflation, price increases. Nobody has a crystal ball, but it looks like the smaller hotels in Town might be finding a sweet spot. It will be interesting to watch this play out.