VRMA

    Powered By:

    Advocacy Series: Vacation Rentals Generate Jobs, Local Economic Stability

    Rental managers are employers – and they contract out to other employers. Add to that how properties bring a steady stream of customers to yet more local employers.

    It’s easy to understand the positive local economic impact of new jobs created by any industry in a city, town or resort community. Things such as the employment multiplier effect – when a company hires 10 people, very often an additional 10 jobs result in adjacent businesses – are the substance of most introductory economics textbooks. But discussions about jobs created by short-term rentals (STRs), like vacation rentals, should also include the community value added by those workers.

    For example, when vacation rental properties are upgraded with repairs and renovations by contractors and subcontractors – who employ plumbers, heating and cooling specialists, roofers, painters, landscapers and more – the community as a whole benefits in several ways. The tradespeople earn more money, but they also improve properties and, by extension, they enhance the neighborhoods as well. Most people would rather live next to a house with new siding and windows and good landscaping than one that is neglected or derelict.

    Additionally, multiple studies (including this one of the 6,100 STRs in San Diego) illustrate how visitors to a resort or city spend substantially in the host community. They are a primary market for restaurants, theme parks, shops, museums and adventure tours – places that employ people as well. When those businesses thrive, they continue to provide products, services and experiences to long-term residents.

    Jobs Created in Smaller Resort Communities

    VRMA spoke with two professional managers of vacation rentals, and studied various reports on the vacation rental industry, to look at the kinds of jobs that are created to serve visitors, as well as what people do in those jobs:

    Cannon Beach, Oregon is a community of roughly 1,600 permanent residents with 1,812 housing units (per the 2010 census), an indication of the presence of vacation homes in the town. Cannon Beach Property Management (CBPM) oversees 36 vacation homes there, employing about 15 people for housekeeping and maintenance tasks in the high (summer) season and about half that in the off season. CBPM pays about $24,000 per month to its employees in the summer.

    Roughly two-thirds of those properties are on or in view of the ocean, typically with five bedrooms and three or more baths, providing accommodations for families on weeklong (or longer) vacations. Tami Florer, owner of CBPM, says that in 2018 they paid out $42,000 to contractors for minor construction, electrical, plumbing and heating work on those properties.

    Among their clients are Mimi and Martin Siegel, who live in Seattle but visit their long-held property as busy careers allow. The Siegels have used the rental revenues to cover property taxes, flood insurance, roof and shingle repair, landscaping and installation of a security system.

    “Our houseguests shop in local stores and dine in local restaurants,” say the Siegels, who are petitioning the local planning commissioners to reject proposed regulatory limitations. “We care about those local institutions and are eager for them to thrive. Their goods and services enrich our own visits to the beach, and we are close friends with several merchants.”

    Pennsylvania’s Poconos, in close proximity to the New York City/Tri-State area, is actually an aggregation of 12 municipalities across a mountainous region in portions of four counties. It has four seasons of attractions, which bring approximately 7,500 guests annually to the 15 properties managed by Svetlana Conques of All Pocono Rentals. With a staff of 17 (housekeeping and administration), the vacation rental company keeps their single-family home properties sufficiently attractive to charge $200 to $700 per night, with stays largely ranging between two and four nights per party. The company pays $15/hour or more to its staff.

    Conques contracts out major maintenance and renovations, which cumulatively ranges between $250,000 and $300,000 every year. Meanwhile, visitors patronize nearby ski slopes ($175/weekend lift tickets), a water park ($105 day passes), breweries, wineries, paintball and shooting ranges, as well as restaurants and shops. By her rough calculations, her guests spend $1 million in the region per year in addition to their lodging outlays.

    Monroe County, part of the region, has recently implemented more stringent rules on residential septic systems, an expensive mandate that was more affordable to property owners because of the rental income. Conques says she purchases furniture, cleaning supplies and guest amenities at local stores.

    Jobs Created, and Value Added, in Communities of All Sizes

    Numerous studies* confirm how vacation rentals create jobs in large and smaller markets. In the Coachella Valley, California, which includes Palm Springs, 2,500 jobs are part of $272 million in economic activity generated by STRs. In New York City, $1.2 billion added by STRs to the local economy includes 10,500 jobs. In St. Joseph, Michigan, midway between Chicago and Detroit, 300 jobs service the town’s STRs. A comprehensive economic analysis of Galveston, Texas’ STR industry found in 2013 that vacation homes created 3,100 jobs as part of $283.6 million in economic activity.

    Both Tami Florer and Svetlana Conques report that the same families have owned many of the homes under their management for generations. STR revenues enable them to continue their ownership and keep their properties in good condition, maintain long-held ties to those communities while providing a steady stream of new customers to long-established retailers.


    Lesson Learned

    Almost all vacation rentals are economic engines in their local markets. Documenting jobs created, and what workers provide, is valuable to planning boards and other local officials who need to discuss vacation rentals with opposition factions.


    *A compendium of research conducted by Airbnb, HomeAway, Short Term Rental Advocacy Center, PhoCusWright, PwC and TripAdvisor

    Recent Stories
    Revitalizing Vacation Rentals to Maximize ROI

    Revenue Management 101

    Vacasa COO Bob Milne