Data show local prices correlate with supply, demand imbalances

Recent data suggest that changes set in motion by Moab and Grand County in 2019 are set to further increase the cost of hotel stays in what is currently the state’s most expensive tourism destination.

Hotel prices, hotel stays, and interest in vacationing in Moab all increased in the years leading up to the COVID-19 pandemic. At the same time, tax revenue and government spending on tourism marketing also increased.

To try to stem the growth, the city and county both implemented hotel development moratoria in 2019, later releasing the cap on the condition that new hotels must meet certain design standards, such as being smaller.

Data from 2013 to 2021 show that hotel prices in Moab have increased when demand for rooms has overwhelmed supply. With further interest in visiting Moab set to increase, and with the number of new hotels set to stagnate, hotel prices are likely to climb even higher in coming years.

That’s all on top of recent findings that Moab’s hotel rooms are currently the most expensive in the state.

The pandemic slowed tourism for only six months

When the city and county halted new hotel developments in 2019, some lodgings already slated for construction continued breaking ground. The construction continued during the pandemic on the bet that tourists would eventually return to Moab.

Within months, visitors began flocking back. October saw the highest number of visitors to Arches National Park out of all Octobers on record. The same has held true every month since then.

Interest in Moab hotel rooms is at an all-time high, according to Google search data. At the same time, more people are buying hotel rooms than they were last year, according to data collected by CoStar Realty Information.

Since 2013, CoStar has surveyed 30 to 40 local hotels each month about their prices, visitors, and rooms to track trends in visitation and prices. The Moab Travel Council publishes the data on its website.

When hotels started going up years ago, prices started going down

Hotel prices were already rising in 2013, when a room cost $115 on average throughout the year. By 2017, prices were up to $154. The next year, the city reached an inflection point.

In 2018, growth in hotel room availability outpaced growth in visitation. In other words, developers built rooms faster than new visitors were coming to the area.

At the same time, prices in Moab stayed basically the same. The average price of a room in 2018 was a few cents less than the year before.

The trend kept up until the pandemic reached the United States. By February 2020, the seasonally adjusted cost of a room was down to $152.

Then, when visitation and occupancy reached unprecedented lows in April, so did room prices.

Moab has tried to slow visitation. More people are coming than ever before.

Utah’s Mighty Five campaign, advertising the five national parks in the state, coincided with a considerable increase in visitation when it began in 2013, but the power to lessen marketing of the area now seems to be out of the hands of the government.

In 1970, Grand County opted into the state’s Transient Room Tax, a tax designed to drive cycles of growth in the state’s many tourism destinations. It did this by adding a tax on hotel room stays, which it then fed back into marketing the area for tourism.

While difficult to say exactly how much the marketing drove subsequent growth in tourism across the state, organic exposure to Moab in particular has seemingly overtaken government’s efforts to stem the growth.

The primary example of this is Mill Creek. Not only have Moab officials avoided marketing the area, but they have taken active steps to eliminate advertisements of it. Despite their efforts, approximately 140,000 people visited in 2020, far overshadowing Grand County’s permanent population of around 10,000.

Mill Creek is not the only example of Moab seeking to reduce tourism impacts by ramping down marketing.

In November, Grand County formalized a policy the Moab Area Travel Council had been implementing internally for months: All marketing material produced by the travel council had to contain messaging about staying on trail, slowing down in town, or otherwise reducing impacts on the area.

In other words, the message could not just be, “Come see Moab!” Instead, the message was, “If you come see Moab, please be respectful.” In 2019, that manifested as the county’s Do It Like a Local marketing campaign. Today, it manifests in the common mantra of “recreate responsibly.”

Not only has Grand County changed its messaging, but this year, it successfully lobbied the state for a reform that allows it to spend less money on advertising and more money on economic diversification.

What have been the effects of these changes? Whatever they are, they have not been enough to stop people from coming to Moab.

Attraction to Moab drives hotel prices. It is still growing.

Since 2013, the CoStar data show hotel prices correlate somewhat loosely with hotel occupancy, which is the number of rooms rented out at any given time. As more people filled rooms, prices increased — for the most part.

Combining that data with data from Google shows that, as more people googled “hotels in moab” and similar searches, prices increased — almost all the time.

So far, 2021 has yielded more searches for Moab hotel rooms than any year since 2004. On top of that, the area currently has the most expensive hotel rooms anywhere in Utah, according to price aggregator Cheap Hotels.

Cheap Hotels compared prices in the 20 most visited locations across Utah. They looked specifically at “centrally located hotels or inns rated at least three stars” and used “the cheapest available double room” for the period spanning Aug. 1 to 31.

A room in Moab will cost at least $173 in August if booked now, according to Cheap Hotels. In Springdale, the figure is $170; Park City is at $126; Salt Lake City is at $110; and St. George is at $75.

Cheap Hotels and CoStar have different methodologies for calculating hotel prices, so the two firms’ figures are difficult to directly compare. However, early data from CoStar shows that Moab set a monthly hotel price record in October, suggesting costs might be back to pre-pandemic levels.

Grand County and Moab have taken multiple steps to tamp down on visitation by reducing and changing its marketing, yet people are coming in droves. If visitation continues to increase, the lesson of 2018 is that costs might only go down if hotels go up faster than visitation. It’s supply and demand.