Gas Prices Are Climbing Again. Your Spa Revenue Will Feel It Before Your Occupancy Does.
Consumer confidence just slipped back under pressure from rising gas prices, and the historical pattern says leisure spending compresses within weeks... but it doesn't hit where most GMs are watching first.
I worked with a resort GM once who had a rule. Every Monday morning he'd pull three numbers before he looked at anything else: spa revenue per occupied room, average F&B check, and gift shop transactions. Not occupancy. Not ADR. He called them his "wallet numbers" because they told him how open the guest's wallet was when they got there. "Heads in beds tells me if they showed up," he used to say. "Wallet numbers tell me if they're worried about something."
That GM would be pulling those numbers right now.
Gas prices crossed $3.80 nationally this week, up 5 cents since Monday. The Conference Board's consumer confidence reading came in at 98.5 in June... which was already soft... and the July read is going to reflect a consumer watching pump prices climb right after they thought things were getting better. Here's the pattern I've seen play out multiple times across four decades of running leisure-heavy properties: people don't cancel the trip. They still drive. The July 4th numbers proved it... 68.5 million travelers, 88% of them behind the wheel. What they do is tighten up once they arrive. That extra spa treatment gets skipped. The family does the breakfast buffet instead of the sit-down restaurant. The poolside cocktails go from four rounds to two. Your rooms revenue looks fine on the daily report. Your ancillary revenue starts bleeding quietly underneath it, and if you're not watching the right lines, you won't notice until August when your GOP tells a different story than your topline.
The timing here matters more than the magnitude. We're sitting at July 11th. Your August booking window is four to six weeks out for drive-to leisure... which means the guests deciding right now whether to book that beach week or mountain getaway are making that decision while they're staring at $3.88 on the gas station sign. They'll probably still come. But they're coming with a budget that just got $40-60 tighter on the fuel line alone for a round-trip drive. That money comes out of something. It comes out of your F&B, your spa, your retail, your experiences. And here's the part that really matters for resort operators: those ancillary lines often carry better margins than your rooms. When a guest skips a $180 spa treatment, you didn't just lose $180 in revenue... you lost maybe $140 in contribution margin because your therapist is salaried whether they're booked or not.
There's a second story underneath this one that the group sales directors need to hear. Corporate meeting planners are consumers too. They watch the same news, feel the same macro anxiety, and they have bosses above them who are already starting to sharpen pencils for 2027 budget season. Discretionary meetings and incentive trips are always the first thing cut when the mood turns. If you've got Q4 group leads sitting in tentative status, this is the week to push for signed contracts. Not next month. Not "after they finalize their budget." Now. Because the longer those decisions sit, the more likely they get made in an environment where the answer is "let's push it to next year." I've watched millions of dollars in group revenue evaporate because a sales team waited for the prospect to call back instead of creating urgency when the window was open.
One more thing, and this one's actually a tailwind if you know where to stand. Select-service and limited-service properties in drive-to markets... you might be the beneficiary here. When confidence dips, leisure travelers don't stop traveling. They trade down. The family that was looking at a $349-a-night resort starts searching for the $159 Courtyard that's an hour closer. If you're running a 120-key branded property within three hours of a major metro, your forward pace might actually improve over the next six weeks while the higher-end resorts soften. Pull your comp set data. If you see the luxury and upper-upscale properties in your market starting to flex rate downward, that's your signal that the trade-down is happening. Position for it. Don't be afraid to hold your rate while they chase.
Here's what I'd do this week if I'm running a leisure property. Pull your ancillary revenue per occupied room for the last 30 days and compare it to the same period last year. If spa revenue per occupied room is down more than 5%, you're already seeing the compression and you need to get your F&B and spa teams building value-bundled packages now... not discounting, bundling. Second thing: if you've got group leads for Q4 or Q1 sitting unsigned, pick up the phone Monday morning and create a reason to sign this week. A small concession now is worth more than a lost booking in September when the planner's budget gets cut. Third... and this is what I call the Three-Mile Radius principle... if you're a select-service property in a drive-to market, go look at what the upper-upscale properties within your three-mile radius are doing with rate. If they're starting to soften, the trade-down demand is coming your way. Hold your rate. Let them chase occupancy while you capture the traveler who just decided $349 a night isn't happening this summer.