Smoky Mountain Slow Down?

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Smoky Mountain Slow Down?

John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes

The last 3 weekends the traffic on the parkway from Sevierville through gatlinburg has been pretty much a ghost town on weekend evenings which ordinarily are jammed traffic. The last few years it was wall to wall this time of year. Went to the Alamo steakhouse last night and walked right in. It’s starting to look and feel ominous, I know summer will pick back up around here but this is starting to seem like it might be a 7 month season here now. 

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Nathan W.
Austin, TX · Member since 2013 · 153 posts · 104 votes
3y
Quote from @John Carbone:

My general rule of thumb is if you have any vested interest in telling me to do something I generally filter your advice out. When you filter out all the Realtors / Property Managers / Lenders the picture starts to look a little clearer. 

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  • Matt Mertz
    Leander TX · Member since 2020 · 179 posts · 150 votes
    3y

    @John Carbone @Collin Hays I just wanted to thank you guys for the expertise you share in the Smokies market.  I find value in your posts.  Thank you.

    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y
    Quote from @Matt Mertz:

    @John Carbone @Collin Hays I just wanted to thank you guys for the expertise you share in the Smokies market.  I find value in your posts.  Thank you.

    My “expertise” is worth about what you’re paying for it on BP. 😂

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  • Matt Mertz
    Leander TX · Member since 2020 · 179 posts · 150 votes
    3y

    LOL that response only reinforces my belief in your expertise.  ;)

    3Reply
  • Mark S.
    Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
    3y

    @Collin H. Well, you seem to be the exception in that you have a vested interest in promoting the area since you are a PM but you are realistic in your posts. Few others are.

    0Reply
  • Wilson Hunter
    Investor · Greenville, SC · Member since 2020 · 210 posts · 302 votes
    3y

    I'm curious what y'all think is the price point investors will start buying at in the Smokies. The deals on the MLS all look terrible, but if you cut ~$100k off everything I'd imagine you'd have investors scooping up those cabins. That's something like 15-20% lower than current average market list.

    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y
    Quote from @Wilson Hunter:

    I'm curious what y'all think is the price point investors will start buying at in the Smokies. The deals on the MLS all look terrible, but if you cut ~$100k off everything I'd imagine you'd have investors scooping up those cabins. That's something like 15-20% lower than current average market list.

    The next buyers will lose money, too.  It will be the buyers after them that have a chance.  

    Personal experience here:

    I used to manage a hotel in the late 1980s/early 1990s.  The hotel was built for around $5 million in 1985. But the hotel market in the area became overbuilt, and rates/occupancy wouldn't support a $5 million build price.  Deep in the red most months.

    Chapter 2.  The FIRST owners of the hotel sold it at a "fire sale" price of $3.8 million.  But by that time, a deep recession had begun, and it was the same story:  Rates/occupancy wouldn't support a $3.8 million price tag.  The SECOND owners filed bankruptcy, and the hotel went back to the bank.  

    Chapter 3.  The THIRD owner of the hotel bought it from the bank for $2 million.  This is when I started managing it.  At that price, the hotel was wildly successful, throwing off about $500K per year in profit.  

    Chapter 4.  The THIRD owner of the hotel, with massive profits, successfully sold the hotel for $4 million.  You guessed it:  The hotel never made a dime for owner number four.  I lost track of what happened to the hotel after owner number four.  

    Here is a picture of the actual hotel:

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  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Collin Hays:
    Quote from @Wilson Hunter:

    I'm curious what y'all think is the price point investors will start buying at in the Smokies. The deals on the MLS all look terrible, but if you cut ~$100k off everything I'd imagine you'd have investors scooping up those cabins. That's something like 15-20% lower than current average market list.

    The next buyers will lose money, too.  It will be the buyers after them that have a chance.  

    Personal experience here:

    I used to manage a hotel in the late 1980s/early 1990s.  The hotel was built for around $5 million in 1985. But the hotel market in the area became overbuilt, and rates/occupancy wouldn't support a $5 million build price.  Deep in the red most months.

    Chapter 2.  The FIRST owners of the hotel sold it at a "fire sale" price of $3.8 million.  But by that time, a deep recession had begun, and it was the same story:  Rates/occupancy wouldn't support a $3.8 million price tag.  The SECOND owners filed bankruptcy, and the hotel went back to the bank.  

    Chapter 3.  The THIRD owner of the hotel bought it from the bank for $2 million.  This is when I started managing it.  At that price, the hotel was wildly successful, throwing off about $500K per year in profit.  

    Chapter 4.  The THIRD owner of the hotel, with massive profits, successfully sold the hotel for $4 million.  You guessed it:  The hotel never made a dime for owner number four.  I lost track of what happened to the hotel after owner number four.  

    Here is a picture of the actual hotel:


     This is how I imagined it would play out, but seeing an example of it actually playing out like this in practice, is stuff you just don’t see on the internet. Thanks for sharing Collin. 

    1Reply
  • Ken Boone
    Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
    3y

    @Collin Hays Yea I think you are right about that.  I just don't see a 20% drop with these interest rates making much of a difference on the profitability, especially if someone uses leverage.

    0Reply
  • Mack Lengel
    Smokies / Greenville, SC · Member since 2021 · 130 posts · 146 votes
    3y
    Quote from @Wilson Hunter:

    I'm curious what y'all think is the price point investors will start buying at in the Smokies. The deals on the MLS all look terrible, but if you cut ~$100k off everything I'd imagine you'd have investors scooping up those cabins. That's something like 15-20% lower than current average market list.


     The people still buying now are either getting a mediocre deal on the market with the hopes of refi-ing whenever the rates drop or they have a decent off-market deal that makes sense now

    OR

    They need to buy real estate to offset their taxes. I have a client now that is building a new primary residence there because the amount he will be saving by not having to pay state income tax by moving there, will more than pay for anything he buys. You can do the math on that lol. He is not afraid to buy anything right now but he pays more in taxes than most people make in a year so take it how you will.

    1Reply
  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Mack Lengel:
    Quote from @Wilson Hunter:

    I'm curious what y'all think is the price point investors will start buying at in the Smokies. The deals on the MLS all look terrible, but if you cut ~$100k off everything I'd imagine you'd have investors scooping up those cabins. That's something like 15-20% lower than current average market list.


     The people still buying now are either getting a mediocre deal on the market with the hopes of refi-ing whenever the rates drop or they have a decent off-market deal that makes sense now

    OR

    They need to buy real estate to offset their taxes. I have a client now that is building a new primary residence there because the amount he will be saving by not having to pay state income tax by moving there, will more than pay for anything he buys. You can do the math on that lol. He is not afraid to buy anything right now but he pays more in taxes than most people make in a year so take it how you will.

    It makes you wonder if the smokies will get that status of the Rocky Mountains where cash flow isn’t that great but people just want to have a property that pays the bills. It’s great having no state income tax here as a resident. 

    0Reply
  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y

    here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.


    I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)

    0Reply
  • Ricardo Hidalgo
    Real Estate Agent · Member since 2019 · 569 posts · 257 votes
    3y
    Quote from @John Carbone:

    here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.


    I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)


     I live on 30A and own and build rentals on 30A. Would love to connect and send you actual numbers from owners we sold too and current builds!

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    3y
    Quote from @John Carbone:

    here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.


    I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)


     I have a house very close to Disney and it has been ridiculously slow. I asked my PM how her other properties look and she said all of them have slowed down significantly (we do our own booking through the 3 major sites and our own site). I'm not willing to lower my prices significantly so I expect I'm going to have to accept a lot of vacancy for the time being, unless things pick up soon. 

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  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @JD Martin:
    Quote from @John Carbone:

    here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.


    I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)


     I have a house very close to Disney and it has been ridiculously slow. I asked my PM how her other properties look and she said all of them have slowed down significantly (we do our own booking through the 3 major sites and our own site). I'm not willing to lower my prices significantly so I expect I'm going to have to accept a lot of vacancy for the time being, unless things pick up soon. 

    It’s good to hear some feedback on Disney area. Since I made this post, I spoke with a PM down in destin/pcb and they are seeing 30 percent decline in revenues. Also, I’m hearing from some sources at the casinos in Las Vegas that it’s pretty dead for this time of year, apart from foot traffic from conventions. 

    It makes sense it’s happening in the tourist spots as opposed to just one location. It happened way too quickly. All of last year and this March was phenomenal and ever since around Easter is when it became noticeable both in terms of occupancy and future bookings. 

    there is a lot of concern around here that the market is saturated with rentals in the smokies, but I think this is showing we are finally seeing a slow down across the whole economy. 

    Traffic this weekend has picked up a little, but it was may more crowded everywhere during March spring break weeks than it is now. 

    It’s pretty crazy how almost on que, we start seeing it in the economy almost exactly 12 months since the fed began the rate hikes. 

    2Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    3y
    Quote from @John Carbone:
    Quote from @JD Martin:
    Quote from @John Carbone:

    here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.


    I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)


     I have a house very close to Disney and it has been ridiculously slow. I asked my PM how her other properties look and she said all of them have slowed down significantly (we do our own booking through the 3 major sites and our own site). I'm not willing to lower my prices significantly so I expect I'm going to have to accept a lot of vacancy for the time being, unless things pick up soon. 

    It’s good to hear some feedback on Disney area. Since I made this post, I spoke with a PM down in destin/pcb and they are seeing 30 percent decline in revenues. Also, I’m hearing from some sources at the casinos in Las Vegas that it’s pretty dead for this time of year, apart from foot traffic from conventions. 

    It makes sense it’s happening in the tourist spots as opposed to just one location. It happened way too quickly. All of last year and this March was phenomenal and ever since around Easter is when it became noticeable both in terms of occupancy and future bookings. 

    there is a lot of concern around here that the market is saturated with rentals in the smokies, but I think this is showing we are finally seeing a slow down across the whole economy. 

    Traffic this weekend has picked up a little, but it was may more crowded everywhere during March spring break weeks than it is now. 

    It’s pretty crazy how almost on que, we start seeing it in the economy almost exactly 12 months since the fed began the rate hikes. 


     My brother just spent the weekend down in Pigeon Forge/Gatlinburg in a cabin he rented for the weekend (he lives 10 minutes from me and I live about an hour and 15 from Gatlinburg), so I'll have to ask him what his impressions were of crowds, etc. I know that he was literally able to rent the cabin last minute about a week ago but I don't know how big, where it was or what he got. After I get debriefed I'll report back here - I don't know what going rates are, so this info might be useful. 

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  • Nathan W.
    Austin, TX · Member since 2013 · 153 posts · 104 votes
    3y

    The May data just posted and the GSMNP is currently on trend to have the second highest annual visitor count ever. 

    https://irma.nps.gov/Stats/SSR...

    That doesn't mean those visitors are staying in cabins though. It could just mean that more people are taking day trips or staying 2 nights vs 4. The vacation rental market is being affected, I'm just pointing out the data. 

    1Reply
  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Nathan W.:

    The May data just posted and the GSMNP is currently on trend to have the second highest annual visitor count ever. 

    https://irma.nps.gov/Stats/SSR...

    That doesn't mean those visitors are staying in cabins though. It could just mean that more people are taking day trips or staying 2 nights vs 4. The vacation rental market is being affected, I'm just pointing out the data. 

    Thanks for the data. I do look and track this. I have a hard time believing that there were 50 percent more visitors in may than in March. Hotels in may were empty, with offerings below $50 a night and March was the total opposite except for the first week. I also go to the park 3-4 times a week for a few hours, and in March it was unbearable with crowds. In may, it was a virtual ghost town. 

    we need to get dollywood visits where we can see a much better representation of visitors (paid visitors) @Leslie Anne Morris  any luck on that?

    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y

    I'm not really surprised a the "through May" numbers at the GSMNP.  We didn't see a significant slowdown until June.  

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  • Nathan W.
    Austin, TX · Member since 2013 · 153 posts · 104 votes
    3y

    I wonder if the new parking pass system could be throwing off some of their numbers.  

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    3y

    My mother went down there with my brother this past weekend and anecdotally reported that there were "for rent" signs everywhere. This means nothing without context, I realize, but just another "eyes on the ground" report for anyone to digest. They went to Soaky Mountain and even though it was a beautiful weekend they rarely waited for any of the rides. They also managed to walk in to the marina and rent a big pontoon for the day on Saturday without a reservation on Douglas Lake, which actually says more to me because those usually fill out completely on weekends for months in advance. 

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  • Leslie Anne Morris
    Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    3y
    Quote from @John Carbone:
    Quote from @Nathan W.:

    The May data just posted and the GSMNP is currently on trend to have the second highest annual visitor count ever. 

    https://irma.nps.gov/Stats/SSR...

    That doesn't mean those visitors are staying in cabins though. It could just mean that more people are taking day trips or staying 2 nights vs 4. The vacation rental market is being affected, I'm just pointing out the data. 

    Thanks for the data. I do look and track this. I have a hard time believing that there were 50 percent more visitors in may than in March. Hotels in may were empty, with offerings below $50 a night and March was the total opposite except for the first week. I also go to the park 3-4 times a week for a few hours, and in March it was unbearable with crowds. In may, it was a virtual ghost town. 

    we need to get dollywood visits where we can see a much better representation of visitors (paid visitors) @Leslie Anne Morris  any luck on that?

    Sorry no. I don’t have any connections there. It was a great idea but it hasn’t converted. I’ll second March being busy and May being slow. June started to book in June. July is almost fully booked now. I’ve had to drop rates 5-15% depending on location. In a strange turn of events I’ve had 5+ inquiries for 2024. Our calendar isn’t open yet. 
    0Reply
  • Richard Elvin
    Investor · Cleveland, TN · Member since 2016 · 280 posts · 187 votes
    3y

    In PF for the weekend. It's slower than I'm used to. I saw people jaywalking on the strip and crossing against the light, without getting run over. Not something you would normally see on a Fri afternoon. This pic is 615pm in front of Mad Dog's.

    2Reply
  • John Carbone
    OP
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Richard Elvin:

    In PF for the weekend. It's slower than I'm used to. I saw people jaywalking on the strip and crossing against the light, without getting run over. Not something you would normally see on a Fri afternoon. This pic is 615pm in front of Mad Dog's.

    It was extremely crowded for July 4th weekend, but that seems to have faded quickly. 
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