Moab’s Short-Term Rental Profits Skyrocketed Over 130% During Pandemic

Moab’s Short-Term Rental Profits Skyrocketed Over 130% During Pandemic

By SOPHIA FISHER | The Times-Independent

There are numbers to back up the hunch: Moab’s short-term rentals were a cash cow during the coronavirus pandemic. According to data collected by the Kem C. Gardner Policy Institute, annual profits for short-term rentals in Grand County spiked 137% from 2019 to 2022, increasing from $25,000 to over $60,000 per unit. The average nightly rate for those rentals jumped even more — nearly 143% — over the same period.

Those numbers far exceeded other Utah counties, where profits and rates increased by 50% or less. Simultaneously, Grand County’s hotels saw their annual profits rise close to 30% from 2019 to 2022. The data support what many in the community know anecdotally: that Moab’s hospitality industry boomed during the coronavirus pandemic. Still, several property managers and hospitality experts note the industry has stabilized since the bump. Rates and occupancy dropped slightly last year.

“[2021 and 2022] were amazing years, probably the best I’ve ever had in the industry,” said Kali Bisco, a local real estate agent, property manager and hotel owner. “But 2023 wasn’t like that.”

Bisco confirmed that rates for her properties increased something like 150% in 2021 and 2022 before shrinking back to 2019 levels last year.

“In July, we were in winter rates at the Gonzo [Inn],” said Bisco, referring to the hotel she owns.

Short-term rental rates in Grand County did drop 3% from 2022 to 2023, according to newly released Gardner data. Hotel rates declined 1% over the same period according to the Utah Hotel & Lodging Association. That trend — a pandemic boom followed by slight decline — aligns with Mike McCurdy’s own observations. A Grand County commissioner, McCurdy also spent five years managing about 100 short-term rentals.

He recalled that demand for Moab lodging took off in 2019 and accelerated following the 2020 coronavirus shutdowns.

“[Occupancy] went from zero to full because everyone wanted to be outside,” McCurdy said. At that time, towns around national parks were experiencing “revenge travel,” in the words of Wes Christensen, a hospitality expert who buys and sells hotels across the Intermountain West for Mountain West Commercial Real Estate.

“Folks were so tired of being cooped up in their homes, and with foreign travel being limited, the national parks of the U.S. were extremely attractive to most travelers,” Christensen said. Indeed, despite Moab’s consistently increasing capacity to house tourists, occupancy rates for both hotels and short-term rentals stayed fairly stable from 2019 to 2022.

According to the Gardner data, hotel occupancy hovered around 65% in both years. Short-term rental occupancy fluctuated more in the interim but ended at 57%, near 2019’s 59%. Over the same period, Grand County saw a 10% increase in hotel rooms and 14% increase in short-term rental rooms. But rates were still going up, McCurdy said.

“The want to come to Moab, the draw … was still extremely high [compared to] the number of available units,” he said. Since 2022, however, the pandemic-era boom has subsided in Moab, he and Bisco agreed.

“I did see rates drop,” McCurdy said. “I also saw far more availability … I saw very targeted stays.” And after demand slackens, Bisco said small-town operators are the first to start hurting. The hotel she manages declined 15% in occupancy last year while her short-term rentals went down 5%. “You’ve got hotel chains that are dropping their [rates] to get people in the door, and it’s killing small businesses,” Bisco said.

Many of Moab’s recent hotel additions came from projects that had been in the works for years. Grand County has approved very few new overnight accommodations since changing the approval process in 2019.

Kevin Walker, the vice chair of the Grand County Commission and a former county planning commissioner, said many hoteliers supported that legislation.

“I think local hotel owners realize it’s not to their advantage to flood the market with cheap hotel rooms,” Walker said. “It’s not good for the community but it’s also not good for their business.”

Over time, that means the legislation should help elevate rates for hotels and short-term rentals. Christensen said it’s “the simple law of supply and demand.” “I think as we see more inbound travel from China and Europe, we’ll see even higher occupancy and higher average daily rates in Moab because there’s no additional supply to absorb that,” he said.

Indeed, Gardner data demonstrate that Grand County’s hotels and short-term rentals in 2022 were almost the most profitable in the state, trailing only Summit, Wasatch and Kane counties.

Christensen said that overall, he is optimistic for Moab’s tourism market in 2024 and beyond. “Long-term, the demand I don’t see changing for a national park market like Moab,” he said.

Megan Banta contributed to this report.