The pandemic brought rapid changes to the local housing and hospitality markets, leaving many uncertainties regarding the impact of short-term rentals and how to prioritize workforce housing.
Tom Foley of Inntopia, a hotel analytics company, provided insights during the Visit Sun Valley/Sun Valley Economic Development Economic Summit this week. He addressed many concerns facing the Wood River Valley and other tourist-based economies in the region.
Foley said pent up demand for travel and $2 trillion in consumer savings during the pandemic are likely to impact tourist towns, which would do well to consider how to react to the changes underway.
“Pulling one string here is going to move things over there,” Foley said.
But, contrary to perception, the valley’s rent-by-owner inventory is relatively flat or down since the pandemic, said Foley. Local listings on sites like Airbnb and VRBO were down 1% from 2019, according to his analysis, but up nearly 50% from 2017, due in part to professional property managers shifting to online platforms like Airbnb for the first time.
When the pandemic was in full swing from January through May last winter, listings on VRBO and Airbnb numbered 3,191, down 2.4% from same period in 2020.
“It’s not necessarily what you’d expect,” Foley said, and likely due to changes in use of the same units, including an uptick in second homeowners taking rentals off the market for their own use.
“People may have said, ‘let’s go to Sun Valley and spend our time there,’” Foley said.
Foley added that the “red hot” real estate market has led to a “churn” in the short-term rental housing market.
“Some homeowners are cashing out,” he said, and new homeowners may not be putting their newly acquired residences into the rental market—at least not yet.
It is difficult to discern overall housing impacts due to “stratification” of the housing market, between independent remote workers moving to town and buying properties and the needs of local support workers for the hospitality industry, Foley said. And yet the concern over workforce housing shortages is widespread in the region, topping the list of concerns among 80% of surveyed communities in Foley’s report. Foley said there is “conundrum” between balancing the need to generate lodging revenue versus the need to house hospitality industry staff.
“Sun Valley has a significant gap between those financially independent of the community and those that provide services to the community,” he said.
Compounding the uncertainties is that 35% of those in the hospitality industry who lost jobs during pandemic have no intention of returning to the industry, according to Foley’s report.
“What are you going to do to maintain service levels?” he said.
Foley said now is a good time to consider the impacts of making concerted efforts to change the housing situation.
“It comes down to what direction a community wants to go in, what kind of guests they want to attract, and what is the availability of that type of inventory,” Foley said. “If most of what are showing up are $1,000-a-night rentals in your inventory and you remove that, what does that do to the ability to attract that type of guest to the community?”
Foley said short term rentals in the West are generally considered anything that rents for 30 days or fewer, but that he considers them as units that “anything that charges a lodging tax.” With more people working remotely and for undetermined amounts of time, communities like Sun Valley could see new and different kinds of demand for housing.
“Now there is an opportunity for people to travel [and work remotely] longer,” he said. ￼