But I thought Gatlinburg was recession proof?

There is no such thing as recession proof, and vacation destinations are often the first, and most impacted, by a recession.

Let's look why things have been so hot in places like Gatlinburg, for vacationers and investors:

1. Low unemployment. Everyone has a job and can afford some sort of vacation.
2. Cheap gas (until the last year). Fill up and drive a day, not a big deal. Low airfares.
3. Lots of extra money floating around to spend on things. Vacations, furniture, cars, maybe even buy your own vacation home, even if it doesn't make good financial sense, "just because you can."
3b Big stock market gains - 401Ks have ballooned (until the last year), folks are feeling really good about their finances, and are stepping out on a limb with their spending.
3c. PPP and stimulus money. $ Trillions of printed money, much of it financial windfalls, that recipients put somewhere. Big screen TVs, back yard pergolas, a BMW, maybe even a vacation rental.
4. Ability to borrow money for next to free. Historically low loan rates, including mortgage rates.

The result of all of this is an economy that is like a small camp fire that you just dumped a bunch of newspapers on. It's been burning hot and bright, and everyone is stepping closer to roast a marshmallow. The prices of virtually everything has skyrocketed. Gone parabolic. And when things go parabolic, it's time to take cover.

So what happens that makes a $500,000 cabin worth $200,000 in a year? A recession. A recession is everything that the expansion was, except in reverse:

1. Rising unemployment. As company earnings disappoint (and they are currently), companies start laying off to shore up their balance sheets. Layoffs beget layoffs. Unemployed people quit spending money, and start liquidating things at steep discounts to shore up their own balance sheets.
2. Expensive gas. A tax on everything we buy. And now you have a bunch of unemployed people trying to fill the tanks of their $70,000 Tahoe with the $1300 a month payment for the next 6 years.
3. As things get tight, there is less disposable money floating around. Folks start thinking twice about spending $5 a day on a double scoop from Baskin Robbins. That's real money.
3b. As it turns out, the stock market doesn't have a conscience. It's just a number. And as earnings decline, so does the stock market. And it won't go back up until earnings recover. How long will that be? Could be months, could be years.
3c. Stimulus money is gone. And not only is it gone, it went on to jack up the prices in virtually everything we buy. That's not good going forward, as fewer dollars will be chasing those goods.
4. The cost of borrowing is quickly rising. The Fed is going to be forced to shut down the economy to keep inflation in check. So that property that sold for $500,000 last month, might only be worth $400,000 now, because the borrow can't qualify for it otherwise.

As all of these phenomena snowball, you can see valuations cut by 50 to 75 percent pretty quickly. Panic selling is part of the cycle of the vacation rental world. Folks jumping in during the last few years are getting ready to find out about the ugly underbelly of a fire that goes from roasting marshmallows to small flicker that all of the campers are now desperately looking for fuel for to keep alive.