Staffing at Ski Resorts: '21/'22

[Iwannaski]

@skivt2… I think you and I are on the same page.

What really concerns me is not the big owners with fleets of properties. It’s the little guy who bought an extra place to follow the wave and ends up getting screwed.

Every time there’s a bubble/burst cycle, people look around and shake their heads. And yet, every 10-20 years… there’s a bubble. So… ummmmm…. duh?

 

[elemmac]

But what about supply? In the past we have seen lots of places sit empty and people complain that they could not cover their expenses with STR’s.

I guess I haven't seen this specific issue, so I didn't realize over-supply is a problem right now. The few people that I know personally that have short term rentals around ski areas are essentially booked out for the season already (minus the blocked out days for their own use). So, my knowledge is pretty limited to those data points.

What happens if STR investors start to have trouble getting their occupancy high enough to cover their expenses?

Then they made a bad investment. They should have hired my realtor...I was told: "This is not an investment property, it's a lifestyle purchase".

 

[Christy]

If there ended up being an oversupply of STRs then investors might decide to rent long term instead or to sell, both of which could be a win for ski area employees, and could help with the staffing challenges we're talking about here. Sounds good to me.

 

[Skivt2]

I never said over supply exists right now. The jury is out on this winter. And for this winter there may not be over supply. But I struggle with what long term factor would bring us from lots of people going into foreclosure because they could not sell or rent their condos to cover cost 3-5 years ago to a place where the number of available STR’s explodes and they all get rented enough to cover the much higher costs associated with them now?
Literally, the condo across the hallway from us sat on the market fir over a year and finally sold in foreclosure for 45k in 2018 and now they are selling for 180k because people think they can cover their cost with STR income. When a lot of people have the same idea and jump into the same business at the same time not all will be successful because they are flooding the market with a product. There are only so many people who need lodging on a given weekend or week.

 

[Skivt2]

That is exactly what happened last time. Owners, stuck with places they could not sell to get their investment back and which they could not rent enough nights to cover their expenses turned to long term rentals, often seasonal but sometime year round.
I expect that to happen again in the next 10 years. It’s exactly why we did not buy the place we rented. The local folks we knew that owned them when they crashed the last time told us never to buy one because it was a “trap”. We considered it when they were super cheap but we felt we did not want to be landlords ever and would be moving to Vermont in too short a time to make having to sell it and our property in CT at the same time as buying in VT feasible. Would we have done well buying when the two next time us went for 45k? Of course. But only because we could sell now to some unsuspecting person unaware of the ups and downs of resort condo investing.

Three times in my life I have had arguments with people who thought he market could never go down. That real estate prices always rise. Twice I’ve proven to be right. I have no reason to believe I will be wrong this time.

 

[MissySki]

I guess I haven't seen this specific issue, so I didn't realize over-supply is a problem right now. The few people that I know personally that have short term rentals around ski areas are essentially booked out for the season already (minus the blocked out days for their own use). So, my knowledge is pretty limited to those data points.


Then they made a bad investment. They should have hired my realtor...I was told: "This is not an investment property, it's a lifestyle purchase".

I am still constantly seeing people asking about rentals (seasonal and specific weeks) on the local Facebook groups around SR, so there definitely doesn’t seem to be a lack of people wanting to rent where we ski anyway. Does seasonal count as STR?? Either way those are in SUPER high demand and there isn’t enough by far to go around.

Also agree 100% with the sentiment of lifestyle purchase versus investment property. But I’m not renting so I never had that mentality.

 

[MissySki]

I personally hope around me at Sunday River that it was more skiers who bought versus STR investors. That’s my story, so certainly plausible. Luckily in my building there doesn’t seem to be a big STR trend at all.

 

[Abbi]

Yes, that's the case at Killington, and at a lot of other resorts, as well. But Killington takes on additional instructors during British vacation week (I thought about doing it one year). They just don't offer the same benefits that they do for regular instructors.

Someone asked me to consider doing that one season! Me?! Ha!

 

[Abbi]

I see several comments about demand not going away for STR’s. Even some speculation that staying overnight would increase with higher fuel costs.

But what about supply? In the past we have seen lots of places sit empty and people complain that they could not cover their expenses with STR’s.

I think part of that was an issue of too much supply of STR’s chasing too few renters.

In the short term demand for everything seems excessive and STR’s are no exception. But will that last with inflation taking such a big chunk of disposable income and the cost of STR ownership increasing significantly all the while the supply of STR’s available for rent has increased exponentially.

What happens if STR investors start to have trouble getting their occupancy high enough to cover their expenses?

In simple terms if there are 15 STRs available and 15 renters per week great. But if suddenly there are 30 STR’s and their are still 15 renters? Then what? 15 STR’s are empty.

So maybe the STR only needs to be rented 100 days to cover cost so being empty 265 days is the break even point. Great. Now let’s say it suddenly takes 180 days to cover costs. But the occupancy is below that because of completion from all the new STR’s.

I have heard over and over again skier visits are flat year over year on average. Why would that change over the next 10 years. So if supply of places to rent as STR’s goes up and not enough increase occurs in rentals then what?

thos is why we have seen boom and bust cycles before and why we are likely to see one again. Real estate in VT has more than tripled. The place we rented quadrupled in two years. Is that going make sense when the chips fall?

I am waiting and expecting some buyers to end up over/under on their mortgages as things go through different cycles. I’ve watched it enough times in other places. I can’t imagine it is not going to happen in resort areas, too.

 

[MissySki]

I am waiting and expecting some buyers to end up over/under on their mortgages as things go through different cycles. I’ve watched it enough times in other places. I can’t imagine it is not going to happen in resort areas, too.

Here’s my thought on that though, who cares?

The issue last time there was a housing crisis were subprime adjustable rate mortgages where people couldn’t get rid of homes with monthly payments that skyrocketed and they could no longer afford them. Then they couldn’t sell for what they owed causing foreclosures etc etc. But if you don’t NEED to sell and your mortgage payment hasn’t gone up due to an adjustable rate, it really doesn’t matter what the home’s value is and if you’re underwater. Does it?

 

[Abbi]

Here’s my thought on that though, who cares?

The issue last time there was a housing crisis were subprime adjustable rate mortgages where people couldn’t get rid of homes with monthly payments that skyrocketed and they could no longer afford them. Then they couldn’t sell for what they owed causing foreclosures etc etc. But if you don’t NEED to sell and your mortgage payment hasn’t gone up due to an adjustable rate, it really doesn’t matter what the home’s value is and if you’re underwater. Does it?

It depends. If the number of renters, or available “guests“ drops off then making the mortgage payment could be difficult. So the “who cares“ part depends on whether they are long-term owners such as you who will keep going or people who have purchased mainly for the purpose to make money off an Airbnb situation.

 

[MissySki]

It depends. If the number of renters, or available “guests“ drops off then making the mortgage payment could be difficult. So the “who cares“ part depends on whether they are long-term owners such as you who will keep going or people who have purchased mainly for the purpose to make money off an Airbnb situation.

Yeah, I guess I don’t 100% feel that’s the majority, but maybe that’s only in my own markets. Where I was bidding with so much cash being thrown around.. it doesn’t seem like those are people who NEED rentals to avoid foreclosure. Or that many even took a mortgage to foreclose on in the first place..

 

[snoWYmonkey]

Full disclosure. I own a short term rental cabin on the Grand Targhee side that I am selling and am building a wheelchair accessible one to replace the cabin as I see an unfilled need in the Tetons.

With that out of the way I have one observation and a question.

Housing was tight 30 years ago and expensive even then in Jackson Hole, many newspaper articles exist addressing the problem. Clearly today is much worse, yet most of the county forbids STRs, so that is not the only issue. What few LTRs remain are exorbitant. I rent our basement to a ski colleague and his critical worker RN wife at a greatly reduced price, but most pay 1500 to 1700 for a room in an apartment. Not sustainable and even those are hard to find. STRs are only a small part of the problem. Ridiculous prices and mortgages for second and third resort homes drive up all rental prices. Those who can afford them to sit empty all year have no need to rent them out short or long term.

My question, point blank: do all those who blame STRs on the staffing shortages at resorts only stay in hotels.when they travel? I have only stayed twice in my life in a short term rental when on holiday but it seems that many of the students I ski with rent condos for the week for a myriad of reasons. If hotels rooms that sleep two cost over a grand a night at the base but a condo ends up being much less per person, also at the base, then I am in favor of this from the perspective of the sport being more accessible to a more.diverse socio economic group.

The issues are better articulated in the book Billionaire wilderness, and each area is unique. Vacation rentals have always been a part of the equation, ownership and management do matter. I have issues with corporations owning everything and the power they then wield.

 

[Iwannaski]

@snoWYmonkey … to answer your inquiry: we stay at both hotels and STRs. It’s frequently based on context for me. While I love the vacation of staying at a hotel, staying at a rental can give me more space from my family, and enable us to manage nutrition better. ;) TBH, I do more work when we stay at a condo, and sometimes I don’t care for that.

I use VRBO for vacation rentals and try to figure out from the description whether it’s an individual or corporate vacation rental. I try to choose individually owned options because I have a lot of concerns about exploitation and market inefficiency in vacation areas. My husband thinks I spend too much time worrying about irrelevant stuff…. But he doesn’t generally have to deal, so NBD.

I love that you’re making an accessible place. What a great idea.

 

[MissySki]

I’ve definitely stayed at my share of STRs, usually with other divas for trips West. Way more fun to stay in a large house or condo together than in hotels apart.. And yes, hotels can be way more pricey as well.

I’m probably not the target audience for this question though. While I certainly can see where the issue happens, I don’t blame everything on STRs. I also think people should be able to do whatever they want with their properties (within reason and zoning requirements), such as renting them out for whatever durations they choose and at whatever price the market will bear. I might not like that part if I’m looking for a rental, but I still see it as their choice.

 

[ilovepugs]

Hmmm.. @snoWYmonkey, I agree with you that STRs alone aren’t responsible for the staffing issues. But it seems that it has greatly exacerbated the problem in markets that are still accessible enough for people to readily own second or third homes who might want to make a little income on the side. I’m thinking of the nearly rich and barely rich who have the “hustle” mindset of wanting to make all their assets work for them.

A bigger issue is lack of supply as a whole, which is obviously a delicate balance in these outdoors-oriented communities. I remember driving through Stowe not that long ago thinking to myself “wow everything is so built up on these hills! Wouldn’t want to live somewhere so crowded!” … and scurrying back to my non-tourist attraction town with nothing in it.

I also think people should be able to do whatever they want with their properties (within reason and zoning requirements), such as renting them out for whatever durations they choose and at whatever price the market will bear. I might not like that part if I’m looking for a rental, but I still see it as their choice.

Hehe I think this is the part where someone steps in and calls for more government regulation which I know you might not like ;) Lack of workforce housing is a problem for both governments and businesses (not to mention, you know, the people who live in a place full time and don’t have a second home to turn to), but on the other hand @snoWYmonkey makes a good point about accessibility for the sport. I don’t think a market solution alone can create a healthy and sustainable balance of workforce housing and tourist lodging which is unfortunate.

I actually greatly prefer to stay in hotels when I travel. If I’m on vacation, I don’t want to cook!! And while hotels can be impersonal, I can at least be assured that the amenities will be at some standard. I’m extremely spoiled at home… my husband picked a STR when we went to Sun Valley and I spent half the time complaining about the itchy sheets and that it wasn’t as nice as home. But sometimes, with group travel, it isn’t up to me, and it is definitely nice to have common areas to share with friends.

 

[MissySki]

I actually greatly prefer to stay in hotels when I travel. If I’m on vacation, I don’t want to cook!! And while hotels can be impersonal, I can at least be assured that the amenities will be at some standard. I’m extremely spoiled at home… my husband picked a STR when we went to Sun Valley and I spent half the time complaining about the itchy sheets and that it wasn’t as nice as home. But sometimes, with group travel, it isn’t up to me, and it is definitely nice to have common areas to share with friends.

The places I’ve slept on ski trips! Haha Like a bunk in a closet in Aspen hahaha. I think for most the cost savings of sharing lodging far outweighs anything else on these trips. At least when I’ve gone we aren’t actually home much and therefore people don’t usually want to pay an arm and a leg for fancy sheets. I couldn’t even tell you if the sheets I slept on any previous trip were nice or horrible to be honest, didn’t even register. If it were at home I most certainly spend a lot of time deciding on what I want against my skin in bed though. Usually on these trips there are nights people eat in and nights they eat out, really depends on who you are staying with and what the itinerary is. That’s all personal choice for sure. I’m not a cook, so I’m happy to eat out or help with prep if someone in my lodging wants to cook, but I’m not the one cooking the feast itself on a group trip that’s for sure.

You end up hurting people traveling on a budget and not the wealthier folks when you take these options away though. It’s never the wealthy folks or corporations who end up getting hurt by these things.

Hehe I think this is the part where someone steps in and calls for more government regulation which I know you might not like ;) Lack of workforce housing is a problem for both governments and businesses (not to mention, you know, the people who live in a place full time and don’t have a second home to turn to), but on the other hand @snoWYmonkey makes a good point about accessibility for the sport. I don’t think a market solution alone can create a healthy and sustainable balance of workforce housing and tourist lodging which is unfortunate.

I kind of doubt that the government in most places just solves any of this. Just because they put forward some “solution”, doesn’t mean it actually fixes the problem in any way. This isn’t a new issue in many many places. Again though, STRs don’t bother me whether allowed or not, I have no desire to be a landlord. No skin in that game, I don’t really care what’s allowed or not outside of my opinion that one should be able to use their property however they like if it’s within the rules that exist.

 

[Iwannaski]

The biggest challenge with regulation is who is writing it. There’s a lot of revolving door between industry (say building) and government that can cause the regulations to be written in a way that hurts small businesses, protects larger entities, and ends up screwing locals.

In WI, we’re having a huge problem with the dark store loophole, and it’s hurting communities. Our gerrymander is preventing the state legislature from acting on it in a way that truly represents the people of the state and local residents. Meanwhile, companies like Lowe’s and Meijer are draining public services without paying their fair share of local tax. And please do not get me started on FoxConn.

Unfortunately, depending on where you live, regulation and legislation can happen through the adoption of an ALEC template…and then it’s going to skew for the big guy b/c the big guys fund ALEC.

 

[SallyCat]

Literally, the condo across the hallway from us sat on the market fir over a year and finally sold in foreclosure for 45k in 2018 and now they are selling for 180k because people think they can cover their cost with STR income. When a lot of people have the same idea and jump into the same business at the same time not all will be successful because they are flooding the market with a product. There are only so many people who need lodging on a given weekend or week.

To go along with @Christy 's comment above, Vermont has an absolutely critical shortage of full-time housing right now. If STRs are not profitable enough for landlords, LTRs are desperately needed and would seem like an ideal solution (and less expensive and labor-intensive than turning over a unit every week or weekend).

As an anecdote, I bought a small condo on Mt. Ascutney in 2018 for $65k. I could sell it for twice that right now. But I live here, and consider myself very, very, VERY lucky to have a stable housing situation in Vermont right now.

There are 16 units in our condo as a whole. When I moved here, only three were owned by people who lived in them full time. There were a couple of renters and the rest of the units were unoccupied by out-of-state owners who stopped coming up when the Ascutney ski resort shut down. (The late-1960's shag-and panelling decor in many of the units was a source of much Redfin-browsing hilarity for a while).

Now? Almost every unit is occupied by an owner who lives and works here full time. Even at the higher purchase prices, these units are still an affordable housing option for a single person or a couple. We're within commuting distance of DHMC and the Upper Valley, so it's lovely without being isolatingly rural.

All of these new owner-occupants have injected new energy into our condo association. Having actual residents make decisions about long-term infrastructural maintenance helps protect the value of our assets (the absentee owners tended to do the absolute minimum maintenance, and only when forced by necessity, such as a significantly leaking roof) and we're discussing some creative uses for our land, such as a community garden.

I can't speak to the needs or the economic future of STR landlords, and I recognize that I'm coming from a very specific perspective when it comes to Vermont real estate. But if the STR sector took enough of a hit that converting to LTRs became more common, that in my mind would be a tremendous benefit to Vermont workers and families, many of whom are the people staffing the ski resorts we love so much.

 

[snowski/swimmouse]

My Vermont lodging is in the process of being sold to my severe distress. The new owners want to make it like a smaller version of the Woodstock Inn which costs 3X as much to stay in. Their first plan was turned down for many reasons. The buildings are no where near old enough to be considered historic. Now they've hired someone on the review board to help them overcome the hurdles. I just know that there are no good alternatives for me. : (