Impact of Short Term Rentals
THIS ARTICLE APPEARS IN THE RED ROCK NEWS
October 1, 2021
October is here! A month of high visitation with cooler temperatures and fall colors compared to the valley. Charged with destination management, last week the chamber convened our community to focus on a major tourism-related challenge: our inability to manage impacts of short-term rentals.
More than 150 people attended a public STR forum at Yavapai College Sedona Center, either online or in person. The event was co-sponsored by the Sedona Lodging Council (SLC) and the chamber, and featured Sedona City Manager Karen Osburn, City Attorney Kurt Christianson, and Jim Beasley owner of STR property management firm, Sedona.org along with Steve Segner, Chair of the SLC and me. The recording can be found at SedonaLodgingCouncil.com.
We reviewed the burgeoning short-term rental landscape of 1,323 STRs in greater Sedona, 815 within city limits, representing 12% of our housing inventory. Of that 976 are “whole home” rentals equating to roughly 2,800 hotel rooms. City Attorney Christianson walked audience members through the state levied laws including SB 1350 passed in 2017 that preempted the city’s ability to ban or regulate STRs. He pointed out that housing presently given over to STRs would almost certainly be grandfathered in even if a change to state law were to occur. However, the message was loud and clear, change can only come from the state legislature. Policy is dictating place in this instance and our vote is our voice.
We are not anti-STRs, however they are not held to the same operational standards that traditional hotels are like providing adequate parking, security, public health and safety, employee housing, etc. Alarmingly, we are losing population as homes are sold and long-term rentals are converted to STRs. The limited inventory is driving up home prices and rents. As a result, Sedona’s population dropped from 10,300 in 2019 to 9,684 in 2020, with no indication the trend is reversing. Fewer people mean lower school enrollment, a continued labor shortage, and ultimately a less vibrant community.
Through September, hotel occupancy rates are still slightly below pre-COVID levels albeit at higher rates, suggesting hotels are not adding to our 2021 traffic issues. STRs are an obvious factor coupled with the increase in Phoenix-area day-trippers and those RV-ing in campgrounds and on our public lands.
Regarding the near-term future of the hotel industry, last week the Arizona Lodging & Tourism Association hosted Smith Travel Research to present the Northern Arizona Lodging forecast at The Enchantment Resort. They expect occupancy to be flat through early 2022, rise through the end of that year, then plateau through early 2024 at a level about 10% higher than 2019.
STRs unthwarted, it is difficult to see how visitation will level off, no matter our decisions about marketing. Strong visitor messaging around responsible visitation to Sedona will be critical to preserving our environment and quality of life.
Tomorrow is Sedona Airport Family Fun Day with vintage planes and food vendors. It is also a good time to reflect on noise reduction with last year’s voluntary Fly Friendly agreement signed by Guidance Air and Sedona Air Tours. The event runs from 9 a.m.-3 p.m., and admission is free. I hope to see you there.
On Sunday, the chamber is playing in the Sedona30 “Miracle Golf Tournament” fundraiser at Oak Creek Country Club in the VOC. It is all part of supporting our community and contributing to a more sustainable greater Sedona!
-Candace Carr Strauss,
President/CEO