We all know how fast and furious a seasonal life in the mountains can be, and last summer, by all accounts, set new records for business and property management companies in Grand County. I wanted to get a pulse on the season and trends emerging in the property management industry from a couple of professionals in the lodging industry.
Sarah Bradford, owner of Winter Park Lodging Company had an interesting perspective on trends in her property management business. According to Bradford, “High end properties are the hot ticket”. Her company has seen a steady growth in clients wanting high end homes and less people looking for the small hotel room. Sarah said, “I believe people want to connect with their family and friends on vacation. A spacious luxury home is worth the extra money to set the stage for a memorable vacation experience”
Winter Park Lodging Company reservations are pacing ahead of last year across the board and rates are looking higher for almost every time period and property type. According to Bradford, “We beat our numbers by over 30% this past summer, and are pacing ahead of last year for every winter month sometimes by quite a large margin.” Nearly 60% in the peak month of March. Next July is even pacing double what they had booked last year at this time so all good signs.
An interesting add on to my conversation with Bradford was the number of bookings that take place via mobile device. Sarah said, “People look at the photos/video and book without calling.” They book a number of luxury homes rentals ($10k + a week properties) without a phone call.
Jeremy Kennell, Economic Development/Project Manager for the Winter Park & Fraser Chamber had several interesting pieces of information to share. Jeremy oversees the data dashboard for the DestiMetrics analytics software the community can utilize to help forecast seasonal occupancy and spending projections.
The DestiMetrics platform provides destinations and properties alike with an insightful, forward-looking view of their performance and upcoming visitation to empower data-driven decisions on marketing spend, rate, and staff.
Kennell said, “ Based on our data, overall numbers are down slightly but ADR is up significantly.” That means the number of rooms booked is lower, but revenue per room is up. A win-win of sorts.
So why are numbers trending down when tax revenue is keeping pace with all time highs? Kennell, a master of the numbers discussion, explained a couple of pitfalls in the data mining business. “Part of the problem is a grey market of information”. Airbnb, VRBO, second homes and property management companies all play a role in the grey market hurdle of data mining.
The “Grey Market”, has several moving parts that make the numbers a little tough to get a handle on. One thing believed to contribute substantially to the discrepancies is the fact that many of our second home owners have purchased their new home in the last couple of years. In fact, 76% have purchased within the last three, and, according to Kennell, “that creates a shiny new home effect on the market.” In other words, lots of use and sharing with friends and family. In the past, the same property may have sat empty for weeks while those guests may have rented a hotel or condo. “They are still here playing, dining and shopping, they’re just not renting beds.”
Erika Schwankl, Director of Sales and Marketing for Stay Winter Park resonated Kennell’s opinion,”Second home owners and their friends have a noticeable effect on sales tax because they don’t pay for lodging and subsequently have more fun money to spend in and around town.”
Our rental bed base is split fairly equally. 50% private homes (VRBO or AirBNB), condos and property management companies to 50% in traditional ski lodges and hotels. As this balance shifts from traditional lodging to the private market, communities will struggle with the numbers. On the upside, there are more options for visitors who are looking for experiences beyond a hotel. More options equal more visitors, which equals more spending and tax revenue.
DestiMetrics is only as effective as the data it receives, and the grey market makes it challenging to get the exact numbers in play, but Kennell made a good point,”It covers a healthy view of the players at the table”. Winter Park through Granby Ranch “It is just a trending model, not exact science”. The software shows us comparisons. Are we doing the things we need to do to keep pace with the other resorts? “Are the things we are doing helping or not helping?”
Stay Winter park has a diverse property rental program and HOA management company. Erika Schwankl said, “We are seeing a couple of notable trends. One is the booking season is shrinking”. People are booking a few weeks out instead of a few months out. Big vacations coming down to the wire, if you will. Erika added, “we are noticing last minute stays and added nights, but we are averaging 4 nights upfront”, as compared to 4-5 nights just a couple of years ago.
That rush of property conversions is challenging community leaders as they wrestle with the impacts of vacation rentals, which account for a rapidly growing share of lodging bookings. The taxes paid by vacation rentals has grown from trickle to a deluge, and every community is discussing increased regulations that would, ideally, keep that revenue high but dampen the side effects that come when owners wring more value from homes on the hot short-term market.
There are a number of studies going on right now and Kennell hopes to get a better handle on the grey market data mining of the resort lifestyle in 2018.