The Municipality of Anchorage's Q1 room tax receipts report published in April. Gross room revenue was down 3 percent for the first three months of 2017, compared with the same time last year. Supply was down almost 1 percent during the same time, partially due to the conversion of the Super 8 into the new La Quinta Inn & Suites.
According to STR, Average Daily Rate (ADR) was the largest impact to RevPAR, down 2.5 percent, with Q1 demand down 1.5 percent. The STR report has been slightly more pessimistic than the actual results reported to the MOA.
Measuring Holidays, Weekends and Events
Visit Anchorage can monitor the impacts of holidays, meetings/conventions, and large scale local events through the daily STR report data. We estimate the expected results for each day based on how the same days of the week performed two weeks before and after.
For instance, we can estimate May 15 norm based on this year’s May 1, 8, 22 and 29 results. Looking for variances between the STR actual and our estimated norm, we are able to attribute even relatively small changes in hotel performance. We see some notable variances with holidays, meetings/conventions, and large scale local events.
Here’s an example for May 6, 2017:
In this example, selling 1,088 rooms more than the surrounding four Saturdays was a success. Looking at our records, we attributed this positive variance to 200 rooms used by conferences we booked (Boiler Manufacturers and Mechanical Engineers), but mostly to the 900 rooms used by the military during their biannual Northern Edge training exercise.
We can also apply this to key events in Anchorage, and mark their effects (or lack of effects). Iditarod and ASAA March Madness both appear to have a positive effect on key benchmarks.
Observed holidays are another story. In Q1, New Year’s Day, Valentine’s Day, and President’s Day actually have negative effects. We continue to observe weaker demand in the weeks that surround major official or cultural holidays. This multi-year trend is caused by reduced transient business travel and minimal demand for meetings and conventions over these periods. We expect this trend to continue for Memorial Day, Independence Day, Labor Day, Halloween, Thanksgiving and Christmas. Read on for more.
Summer Observations
Northern Edge: The military’s annual Northern Edge positively influenced Anchorage hotels. Media reports 900 rooms per night, and though the exercise ran May 1 to 12, it appears to have a pre-exercise component on April 25.
Gulf cruise capacity forecast: While cruisetour patterns and Anchorage hotel availability may impact the number of cruise visitors who overnight inside the municipality, we believe the more important data to monitor is ship capacity along this route. Gulf cruise capacity is measured by the number of potential passengers who either begin or end their cruise in Seward or Whittier. We exclude calls where passengers do not join or conclude their sailing, such as calls to Anchorage. We anticipate a -2.3 percent change in Southcentral cruise capacity in 2017.
Holidays
As mentioned above, official holidays exert downward pressure on hotel occupancy, demand, and ADR. A look at historic data for upcoming Independence Day and Labor Day holidays:
New Anchorage Visitor Profiles
The Alaska Visitor Statistics Program Anchorage and Girdwood visitor profiles are now available. The research looks at 2016 out of state visitors, May to September.
It may be tempting to skim the executive summary and call it good, but focus on local and regional data contained in the regional “summary profiles.” It’s the portion with the most actionable and comprehensive information for Anchorage. Here’s the AVSP data for Southcentral communities.
