The future of tourism and STRs

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The future of tourism and STRs

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

There is a lot of talk about the future of tourism during and post-COVID and how it will affect the behaviors and choices of vacationers.  This is a great article.  It make the case the "drive to" spots are going to become increasingly popular due to the perception of greater safety.  The theory is that vacationers will increasingly want their space and breathing room.  That is bullish for places like national and state parks, bearish for urban and crowded areas.  It seems also to be bullish for STRs, and bearish for high-rise hotels.

https://www.yahoo.com/news/coronavirus-create-kind-tourist-130039607.html

Of course, there is another driver not in this piece that will be bullish for drive-to STRs: Budget constraints. COVID-19 is going to hit most families financially. So for a typical family of four people, there will probably be a lot fewer willing to spend $5-10,000 on a vacation with flights and car rentals. A drive-to vacation, where the biggest expense is the STR rental, is going to be preferred by many.

All of this is very bullish for those who own STRs in the "drive to" destinations across the U.S. and Canada.

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Michael Greenberg
Investor · Denver, CO · Member since 2016 · 533 posts · 433 votes
6y
Originally posted by @Collin Hays:

There is a lot of talk about the future of tourism during and post-COVID and how it will affect the behaviors and choices of vacationers.  This is a great article.  It make the case the "drive to" spots are going to become increasingly popular due to the perception of greater safety.  The theory is that vacationers will increasingly want their space and breathing room.  That is bullish for places like national and state parks, bearish for urban and crowded areas.  It seems also to be bullish for STRs, and bearish for high-rise hotels.

https://www.yahoo.com/news/coronavirus-create-kind-tourist-130039607.html

Of course, there is another driver not in this piece that will be bullish for drive-to STRs: Budget constraints. COVID-19 is going to hit most families financially. So for a typical family of four people, there will probably be a lot fewer willing to spend $5-10,000 on a vacation with flights and car rentals. A drive-to vacation, where the biggest expense is the STR rental, is going to be preferred by many.

All of this is very bullish for those who own STRs in the "drive to" destinations across the U.S. and Canada.

"Post Pandemic", which at this point I do not believe "Post" can be identified, I agree with this article. However, we are a nomadic society (as are some other countries) and travel will resume. I have painfully learned the "drive to" lesson and are looking to diversify STR assets from a fly to destination to more flex-travel destinations.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    It will not be good for areas that depend on say Disney World being open. It also depends how bad any second or third waves of the virus are.

    Yes if you have a place that is remote say in the mountains or on the beach where you are not dependent on restaurants or attractions being open then you should be fine. 

    The metro rentals are going to be in trouble short term.

    I am listening to a Live Brandon Turner webinar and they are talking about this very thing right now. They are saying they are not booking travel to places like Disney because the park opening is uncertain. Then what will an open Disney World look like?

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    6y

    Even before the Coronavirus, a paid short term rental analysis sites is showing my County went from 400 to 600 short-term rentals in one year. But the guests are not going up particularly much.

    to me the 800- pound gorilla in the room is still too many people piling in thinking short-term rentals are the answer.

    except for a few markets, and I'm not even sure about them, I am expecting a mega collapse in short term rental markets, and it's just a matter of when.

    0Reply
  • Collin HaysBusiness Member
    OP
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Ken Latchers:

    Even before the Coronavirus, a paid short term rental analysis sites is showing my County went from 400 to 600 short-term rentals in one year. But the guests are not going up particularly much.

    to me the 800- pound gorilla in the room is still too many people piling in thinking short-term rentals are the answer.

    except for a few markets, and I'm not even sure about them, I am expecting a mega collapse in short term rental markets, and it's just a matter of when.

     Good points, Ken. I think the other big question is the long-term viability of the Airbnb and Homeaway platforms.  I see indicators that both of these companies are teetering.  Certainly STRs would survive them, but I am not certain that we don't see some major shifting in this industry straight ahead.

    [email protected]806-672-7102
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    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    6y

    they plus booking.com are the gorillas. perhaps google, amazon and even others ebay? decide one day to directly compete as STR platforms...

    0Reply
  • Jim Nettles
    Rental Property Investor · Ormond Beach, FL · Member since 2020 · 15 posts · 4 votes
    6y

    @Collin H. What would take the place say Airbnb and other rental platforms ? We are new to STRs. Thanks.

    0Reply
  • Collin HaysBusiness Member
    OP
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Jim Nettles:

    @Collin H. What would take the place say Airbnb and other rental platforms ? We are new to STRs. Thanks.

    Honestly that's my question.  We have marketed through VRBO since 2005.  There is a lot of value with VRBO, but in the last few years there have been a number of changes that have caused me to question their fundamental business integrity.  The tea leaves suggest they have a major cash crunch.  If they haven't held rents in escrow, which is supposed to be standard practice in our industry, that explains a great deal, and it has thus likely denigrated into a Ponzi scheme.  If regulators get wind of that and shut the company down, there is going to be a lot of financial pain to go around. 

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    2Reply
  • Michael Greenberg
    Investor · Denver, CO · Member since 2016 · 533 posts · 433 votes
    6y
    Originally posted by @Collin Hays:

    There is a lot of talk about the future of tourism during and post-COVID and how it will affect the behaviors and choices of vacationers.  This is a great article.  It make the case the "drive to" spots are going to become increasingly popular due to the perception of greater safety.  The theory is that vacationers will increasingly want their space and breathing room.  That is bullish for places like national and state parks, bearish for urban and crowded areas.  It seems also to be bullish for STRs, and bearish for high-rise hotels.

    https://www.yahoo.com/news/coronavirus-create-kind-tourist-130039607.html

    Of course, there is another driver not in this piece that will be bullish for drive-to STRs: Budget constraints. COVID-19 is going to hit most families financially. So for a typical family of four people, there will probably be a lot fewer willing to spend $5-10,000 on a vacation with flights and car rentals. A drive-to vacation, where the biggest expense is the STR rental, is going to be preferred by many.

    All of this is very bullish for those who own STRs in the "drive to" destinations across the U.S. and Canada.

    "Post Pandemic", which at this point I do not believe "Post" can be identified, I agree with this article. However, we are a nomadic society (as are some other countries) and travel will resume. I have painfully learned the "drive to" lesson and are looking to diversify STR assets from a fly to destination to more flex-travel destinations.

    3Reply
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    6y

    I'm also very interested to see if a new STR platform will arise out of all this. Airbnb has created a PR nightmare for themselves. They have been the tech leader of the STR platform pack for the past decade, but with this mess they have created, sending hosts screaming into the arms of the other platforms, that position is ripe for the taking.

    Podcast Guest on Show How to Get More Airbnb Bookings This Spring and Summer Break
    2Reply
  • Luke Marsh
    Property Manager · Cincinnati, OH · Member since 2019 · 131 posts · 237 votes
    6y

    This is an interesting article, personally I think it will be a much slower process than expected for tourism and short term rentals to pick back up. There is just so much uncertainty on the exact financial fallout the pandemic has had, as well as the overall view people have on traveling and being in close proximity to others. As John mentioned I see STRs that are more isolated being the first areas people want to travel to.

    2Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    6y
    Our place is pretty rural in North Idaho and we just got another 7 day booking for July. Things have really slowed down as far as bookings, but we have only lost 2 due to the pandemic. So far our place 35 miles from town should be OK.
    0Reply
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