Short-term rental owners hit hard by governor’s orders

By John Finefrock
Staff Writer

Short-term rentals (STRs) haven’t been permitted to operate in Colorado since mid-March and it has taken a financial toll on owners.

The SUN spoke with STR owners and local employees of property management companies and the narrative was generally the same: Vacation rental owners have lost a lot of revenue, and state orders that gave guidelines about STRs were confusing, vague or unclear.

“It’s devastating,” said Laura Daniels, managing broker and owner of Team Pagosa Real Estate, which manages STRs, adding, “All I’ve done is give money back since March.”

Christine Miller, who manages vacation rental properties with Vacasa, explained that, last year, May had about an 80 percent occupancy rate for local properties and that this year it’s been zero percent.

“Last year in May we were almost full, which was really bizarre for us, because April and May are normally our dead times,” she said.

Miller explained that April and May is “mud season” around Pagosa Springs and the tourist crowds slow during those months. 

March, she explained, is very busy with tourists because of staggered spring breaks throughout the country.

“What hurt us most was the employees. We furloughed almost 12 employees in Pagosa,” Miller said.

Kristi Smith, who owns two vacation rentals in Archuleta County, told The SUN she’s missed out on over $6,000 of revenue since STRs haven’t been allowed to operate.

“We were sold out every year for all of the summer usually and then we are booked — usually sold out in March and it’s hit and miss the rest of the time,” Smith said.

Smith poured through Gov. Jared Polis’ Stay at Home and Safer at Home orders and said “it was very confusing” in trying to navigate the rules for STRs.

Smith said that it’s not economical for her to rent out the properties she owns as long-term rentals, noting she’d have to rent out a two-bedroom condo for $1,700 a month to even come close to breaking even.

She noted condo association dues where she owns property total almost $400 per month per property.

“The argument that short-term rental owners are taking up all the long-term rentals — that’s not the case. It’s too expensive,” she said.

Daniels also echoed Smith’s point that STRs aren’t impacting the long-term rental market.

“Most of them are $700,000 houses and no one could afford ‘em anyway,” she said. “And then the ones that are cheaper than that — they don’t rent out very often.”

Mary Jo Coulehan, executive director of the Pagosa Springs Area Chamber of Commerce, offered a more nuanced view on if STRs affect long-term housing in the area.

“I feel that it’s a double-edged sword,” Coulehan said. “[STRs have] certainly helped our tourism numbers … Staying in a short-term rental is certainly a national trend and so we understand that that’s the way many people like to travel because it keeps their families together, but not all the homes are $800,000 homes. There’s a wide range of housing options and, yes, we do feel that it affects the long-term rental market.”

She added, “Many people go into it thinking that it’s going to be this cash cow and oftentimes it’s not because there’s so many on the market, so it just makes the pool and the pieces of the pie a lot smaller. So when people go into it, they need to go into it with open eyes.”

Asked about STRs and Polis’ orders, County Attorney Todd Weaver wrote in an email that “the language in the orders was poorly drafted and difficult to interpret.” 

iTrip Vacations Pagosa Springs, which manages STRs in the region, had similar issues navigating the governor’s orders.

“We’re getting so many mixed signals of what restrictions we’re actually under,” said Charlee Michelle, co-owner of iTrip Vacations Pagosa Springs.

“I don’t think [STR regulations were] as prominent as perhaps the traditional lodging resources like hotels and motels,” Coulehan said. “It was in the 34-page document, but it wasn’t in some of the shorter synopses.”

Coulehan explained she’s anticipating an announcement by Polis on May 25 and expects STRs to be allowed to operate again beginning on June 1.

Jared Payne, co-owner of iTrip Vacations Pagosa Springs, noted there’s a rosier picture for STR owners for the upcoming season. 

“There’s demand for summer,” he said. “We’ve gotten quite a few inquiries and people champing at the bit to book for summer.”

Hotels were never required to close by the state amid the COVID-19 pandemic, according to Pagosa Springs Town Manager Andrea Phillips.

 

This story was posted on May 21, 2020.