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After explosive growth during the first years of the COVID-19 pandemic, occupancy and revenue for vacation rentals in Colorado’s resort towns is dropping. 

The downturn has been , when numbers began to plateau, and industry experts say 2024 could end with even softer figures for lodging properties. But compared to pre-pandemic years, trends are still charting a healthy course, said Tom Foley, a senior vice president for the lodging software company Inntopia. 

Rather than the extreme swings of the past few years — when travel and spending initially plummeted at the beginning of the pandemic before roaring back — the lodging industry now finds itself in calmer waters. For Foley, it’s a chance to breathe. 

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“It is the best and most confident feeling that I’ve had about the state of the industry since March of 2020,” said Foley, who tracks data for tens of thousands of lodging properties in resort communities across the western U.S. That includes top destinations in Colorado like Breckenridge, Vail and Aspen, with Foley’s data representing anywhere from 55% to 70% of total properties in those areas. 

Across practically all resort communities, bookings for lodging properties surged in 2021 and 2022 leading to average revenue gains of around 20% compared to 2019, Foley said. 

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But since 2023, revenue has flattened and, in some cases, so has occupancy. 

Part of that could be attributed to the natural comedown from the pandemic, when vacationers flocked to rural resort areas. The pandemic’s economic fallout — inflation and high interest rates — may also be undercutting travel as consumers become more reserved in their spending. 

“Starting last year, we really saw an extreme pushback against higher (nightly) rates and things have normalized,” Foley said. “And that’s different from a return to normal. The result is stable transactions, predictability, proactive opportunities for properties instead of having to react.”

Whether that signals a healthy landscape for the industry depends on who you ask. 

“If people think that a 20% revenue gain … is healthy, then they’re going to disagree with my assessment,” Foley said. “Healthy is sustainable.” 

While Colorado reached record levels of tourism last year, with 93.3 million visitors who spent $28.3 billion, the jump in spending on lodging was significantly less than in previous years. 

In the Rocky Mountain region, accommodation spending increased by 14% from 2019 to 2022, going from $1.4 billion to $1.6 billion, . Spending was flat, however, in 2023 compared to the prior year. 

“We’ve been on a slight downturn in the mountain communities,” Colorado Tourism Office Executive Director Tim Wolfe said. “It may bounce back, but I don’t think it will be as aggressive. It may even stay down because, for the first time ever, more people are traveling out and overseas than coming into the United States.” 

International travel to the U.S. has yet to recover to its pre-COVID levels, resulting in more day travel from domestic consumers and fewer long-term stays from out-of-country visitors. Colorado ski areas also — down 5% to 7% — during the 2023-24 season for the first time since 2019. 

It hasn’t just affected winter months. Breckenridge, for example, saw a for overnight bookings by Colorado residents this summer compared to last — with a 14% decrease for out-of-state travelers. Steamboat Springs saw a nearly 16% decrease in the total number of booked nights this summer compared to last, according to a comparison by the Breckenridge Tourism Office. 

“Overall occupancy for hotels and short-term rentals for 2024 will most likely finish lower than 2023,” Wolfe said. “We got out of the gate slow. Summer has been basically flat … and there’s not enough upside at the end of the year to overcome” occupancy from the beginning of the year. 

“Occupancy is what drives retail, restaurants, outdoor recreation,” Wolfe added. “So if you don’t have people here for extended stays, they’re not spending on those other things that fuel those communities.” 

COVID-19 exacerbated friction between tourism and quality of life in rural resort areas, with a recent survey of mountain town communities showing a desire for rather than on tourism.

Another survey commissioned by the Northwest Colorado ߣÏÈÉú of Governments and Colorado Association of ߣÏÈÉú Towns showed there was a sense of . The survey also highlighted differing perspectives held by year-round residents and those who own short-term rentals and/or second homes — with the former advocating for more focus on locals. 

“Each community has to define how (tourism) works for them,” Wolfe said, adding that he hopes to see more diversification of travelers — including overseas visitors — to bring balance and long-term stability to local economies. 

What next year will bring for the industry is mostly unknown. Experts say trends will be dependent on a number of factors, including the economy and the impacts of recently implemented in various communities. 

“It really is too soon to really know the impact of these rules,” said Foley, the Inntopia executive. “These are things, like any economic force, (that) are huge and take a long time to trickle through.”

But any of that could be turned upside down by a great snow year. 

“The wild card in mountain communities will always be snow,” Foley said.