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Study released on impact of policy restrictions on short-term vacation rentals

Coachella Valley.

There are significant losses in total visitor spending in communities that ban STVRs. Across 10 cities analyzed that had STVR restrictions in place for 2 years or more, $377 million in visitor spending in those communities was lost in 24 months after the restrictions were put into effect.

RANCHO MIRAGE, CA – Tourism Economics, an Oxford Economics company, has released an analysis of policy restrictions on short-term vacation rentals (STVRs) and their effects in communities relevant to the Coachella Valley. Studies analyzing housing affordability and residential housing development show that STVRs account for only 1% of home value or rent increases (and less than that for seasonal communities like the Coachella Valley). The analysis of the studies also shows that residential development is lower in communities that ban or severely restrict STVRs, negatively impacting housing availability, business investment, and tax revenues over time.

Additionally, Tourism Economics’ report identified the significant economic impact STVRs had in the Coachella Valley in 2021, accounting for nearly 26% of all overnight visitor spending and supporting 4,649 local jobs. The report also found total STVR visitor spending was $829 million, with a total economic impact of $989 million.

“Short-term vacation rentals generate a significant economic benefit for the Coachella Valley, supporting a broad range of public services and improving the quality of life for residents,” said Adam Sacks, President of Tourism Economics. “Our research finds that restricting STVRs would inflict serious economic costs on the region, negatively affecting the tax base, the real estate market, and the viability of restaurants and attractions enjoyed by visitors and residents alike.”  

Other key findings:

  • Nearly 1.3 million visitors stayed in Coachella Valley STVRs, accounting for approximately 23% of total overnight volume in 2021.
  • The impact of the proposed ban in the City of La Quinta would be 122,000 fewer visitors to the city annually, resulting in 530 fewer jobs and $9.5 million reduction in local tax revenues annually after 10 years.
  • There are significant losses in total visitor spending in communities that ban STVRs. Across 10 cities analyzed that had STVR restrictions in place for 2 years or more, $377 million in visitor spending in those communities was lost in 24 months after the restrictions were put into effect.

A 2022 study showed there is no relationship between STVRs and crime.

“This report makes it very clear that short-term vacation rentals play a crucial role in supporting our local community,” said Scott White, President & CEO of Visit Greater Palm Springs. “It is vital that all Coachella Valley cities work with STVR operators and residents on regulations and enforcement that preserve this lodging option and the economic and quality-of-life benefits it brings to our community.”

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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