If you own a vacation rental in the Scottsdale area, you may be currently trying not to panic. You’re not alone!

A quick search on AirBnB gives some pretty uncomfortable numbers: hundreds of rentals sitting empty, with few bookings in the next coming months, if any. Even the most professional, flawless listings and five-star properties are not immune. 

It appears that the Scottsdale vacation rental market has reached oversaturation.

How did we get here?

There’s no one specific reason for this, but rather a perfect storm of a few very important things, that all started off with…

The Pandemic.

COVID-19 brought vacation and travel plans to a screeching halt as lockdowns and isolation went into effect. Businesses either closed or reduced their operations to the bare minimum to sustain themselves and their customers. As a result, cabin fever spread across the country, and families that were desperate for anything resembling a change of scenery turned to one of the few remaining options: vacation rentals. Demand spiked across the valley but especially in Scottsdale. These properties allowed households to have the closest thing resembling a vacation they could find. Many of the rentals in the area boasted luxurious amenities that rivaled the now heavily-restricted hotels and resorts: pools, home theaters, spas, outdoor kitchens, putting greens, home gyms, and even tennis courts and arcade cabinets. They were close to restaurants and grocery stores that were willing to deliver food and amenities to their front doorstep contact-free. They also provided a safe, comfortable space to quarantine before vaccines were readily available. 

Increased Demand.

The number of available short term rental properties skyrocketed to meet demand. New and inexperienced investors were lured in by the promise of easy, passive income. The purchase of these properties added more fuel to an already inferno-like housing market, in which houses were selling for record prices. But while the market was in a frenzy, another side effect was quietly taking root:

Parties.

During the shutdown, bored college students were looking for a place to let loose. They took full advantage of the availability of large, upscale rentals that had the space and amenities needed to throw a house party. Owners were looking to cash in on this new niche market, and began aggressively marketing their properties as party houses. As life began to return to normal and restrictions were lifted, the partying continued. Neighboring states and municipalities tightening vacation rental restrictions, further driving momentum.

Over the next year, neighborhoods that were recently quiet and family-friendly were now being inundated with buses full of partiers. Loud music, piles of trash, heavy drinking and drugs, and sometimes even fistfights spilled into the streets. Soon, rentals were out of control, being used for everything from hosting raves to pop-up retail shops. Residents were left feeling frustrated and unsafe.

A task force established by the City of Scottsdale and AirBnB’s party bans are helping to get the situation under control. But the damage has been done. Neighbors will be suspicious of rentals in their neighborhoods for a long time. Potential guests just looking for lodging for their families are now wary of the “bachelorette capital.”

The aftermath.

Businesses and hotels are back up and running. Gas prices, while falling, are still high, curtailing travel plans. The vacation rental market in Scottsdale now sits mostly stalled, with a glaring lack of guests to fill them, as nearcations keep people closer to home.

So what do I do with my vacation rental?

The choice you make depends on a variety of factors. How much are you willing to lose before calling it quits? How much have you already lost and how will it impact you down the line? Would you be willing to turn your short-term rental into a long-term rental? Do you have a backup plan? 

We will address those questions in the next blog! 

In the meantime, if you’re looking for help selling your vacation rental or need honest, compassionate advice about your property, we’re here to help! Short Term Rental Manager has over 15 years of experience in the vacation rental industry. We are locally owned and operated and we have a front-row seat of the local markets, along with the knowledge and expertise to navigate them. Visit our website to learn more.