It’s time to recognize what vacation rentals have done for Arizona’s tourism economy, especially over the last two pandemic-ridden years. But many local and state officials see only their negative aspects, portraying all vacation rentals as wild party houses. Nothing could be further from the truth.
Vacation rentals have literally saved Arizona’s, and Scottsdale’s, tourism economy since the COVID-19 pandemic broke out in March of 2020. Hotel occupancy dissolved overnight.
Vacation rentals were hard hit initially, then started roaring back in May of 2020, as a safer lodging alternative for families and group travelers.
Critics would have you believe vacation rental users have all been taken from the hotels, but that’s not what vacation rental customers tell us. It’s not a choice between hotel or vacation rental. Without the economy, savings and quality of vacation rental lodging, most customers tell us they wouldn’t have come.
The dominant majority of vacation rental users are new tourism visitors to Scottsdale and Arizona. It may not be the first time they’ve come, but they’re coming more often and in greater numbers because of vacation rentals.
Thankfully, Arizona’s economy has remained refreshingly open (thank you Gov. Ducey!), attractive to travelers by air or car. Without the injection of vacation rental users since early 2020, Arizona’s tourism economy would be like Hawaii’s — decimated. Vacation rentals saved Arizona from tourism economic disaster.
Consumer travel habits have changed. You can book a five-bedroom house for the same nightly rate that one hotel room would cost at any of Scottsdale’s namebrand resorts. This value proposition is irresistible to consumers, which is why they’re flocking to vacation rental stays.
Of course, there are always problems with anything. A tiny percentage of bad actors have left a bad taste in the mouths of Scottsdale’s city council and other lawmakers. They hear only the complaints. Just over 1,500 complaints were logged by Scottsdale PD in 2021 for noise, nuisance or parties at vacation rentals. There were over 252,000 vacation rental stays in Scottsdale in that same period.
So these “party houses” were 0.6% of that total, less than 1%. That means 99.4% of vacation rentals are not noisy nuisances. This makes sense because most of our customers are families, hardly noticed in neighborhoods.
Then there’s the economic benefit that comes from these visitors. Scottsdale received between $10 million-$12 million in direct lodging tax revenue from vacation rentals in 2021. For Arizona it was $80 million total. Add visitor spending of over $3 billion during their stays (restaurants, bars, stores, attractions), with another $250 million added in state sales tax revenues.
Don’t forget jobs. There are just over 4,000 vacation rentals in Scottsdale (27,000 in all of Arizona). Vacation rentals require extensive improvement, management and maintenance. This means jobs. Exactly how many is difficult to assess, but estimates range from a low of 11,000 jobs to as high as 40,000 Arizona jobs directly attributable to vacation rentals.
Did these jobs come in direct proportion to job losses in the hotel sector? No, they did not. Hotel jobs lost during the pandemic would’ve been lost with or without vacation rentals.
Scottsdale has invested heavily in tourism promotion. It is known around the world as a premier travel destination. Do we shut down Old Town because it often gets wild? No, we don’t. Yet Scottsdale’s new mayor would like to shut down vacation rentals if he could. That would be shooting Arizona in the economic foot, a foolhardy thing to do. He would be killing the 99 to go after the one.
Vacation rentals brought over 12 million visitors to Arizona in 2021. Today one in four visitors to Arizona stay in a vacation rental. These are largely new visitors who wouldn’t have come here otherwise. The value proposition of vacation rentals has stimulated this additional travel demand, and the market keeps growing. No way most of these travelers would’ve come without vacation rentals. That’s why many large hotel operators have gotten into the vacation rental business themselves.
Scottsdale is an outsized beneficiary of the prosperity generated by vacation rental visitors. Vacation rentals exist in every city in the Valley, but whether you’re staying in Gilbert or Glendale, chances are a visit to Scottsdale is on your list while here — to Old Town, attractions or events. Similar things could be said for Sedona.
If tourism is important to Scottsdale, to Arizona, then vacation rentals are important to tourism. Without them Arizona’s tourism economy would have struggled terribly the last two years. Thanks to vacation rentals, it’s done exceedingly well.
Those of us in the business don’t like the few poorly managed party houses either. They threaten to ruin it for all of us. But they are truly few in number, a small exception to the norm. What we don’t want to do is kill the 99 in our efforts to stamp out the one. Problem operators can be identified for corrective action.
That’s exactly why Arizona Vacation Rental Association was formed. Working together with the platforms and civic leaders we can minimize nuisance problems. Our civic leaders need to engage with operators to find solutions. This has yet to happen. We want to attack the virus without killing the host.
If tourism is important to Scottsdale, to Arizona, then vacation rentals are very important to the future prosperity of our tourism economy.
Editor’s Note: Mark Beauvais is a licensed real estate broker who owns/operates three vacation rentals with his wife Dina in Scottsdale/Phoenix and serves on a voluntary basis as the chief data officer and member of the board of directors of the Arizona Vacation Rental Association.
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