Vacation rental homes are vital, study says

If the thousands of vacation rental houses in Hawaii were suddenly taken off the market, the state could lose 319,000 visitors annually, and their $431 million in spending and $37 million in taxes.

That was the opinion put forth in a new study set for release today, commissioned by vacation rental giant Expedia and conducted by Hospitality Advisors President and CEO Joseph Toy. He said current hotel inventory can’t accom­modate all 680,737 visitors who stay about 5.7 million nights annually in Hawaii’s vacation rental houses, generating about $1 billion in spending and nearly $80 million in tax revenue.

“The occupancy rate in Hawaiian hotels is at or close to capacity. Vacation rentals are crucial to the vitality of Hawaii’s tourism economy,” Expedia, which owns popular vacation rental sites VRBO (Vacation Rentals by Owner) and HomeAway, said in a statement. “Family travelers increasingly rely on whole-home rentals. They want to stay in a home with multiple bedrooms, a kitchen and a yard or swimming pool. They want to have their family together.”

Toy’s latest study, based on 2016 data, counts 12,189 vacation rental houses, which equal 15 percent of the state’s accommodation industry. His definition doesn’t include condominiums, “condotels,” timeshares, bed-and-breakfasts or shared spaces in private homes.

That theory isn’t based in reality, said Eric Gill, financial secretary-treasurer of Unite Here Local 5. “This study is a self-serving one.”

“Their business is helping people break the law,” added Gill, who said the spread of vacation rentals has caused housing costs to soar, reduced new hotel construction and caused hospitality jobs to decline.

The issue of vacation rentals is likely to come up before the Honolulu City Council this month. Chairman Ron Menor said he plans in the next several weeks to introduce an amended version of Resolution 17-52, which was deferred in April.

Resolution 17-52 allows neighbors to file a civil case in court against operators of illegal vacation rentals without first exhausting city administrative procedures. It also prohibits illegal vacation rental operators from advertising their units by any means, including signs, print or online. It requires vacation rentals facilitators — such as Airbnb and Craigslist — to submit monthly reports to the city. And it calls for more funding for investigations into illegal vacation rentals and enforcement of regulations.

“I am not opposed to vacation rentals,” Menor said. “However, the city cannot condone the thousands of vacation rentals that are operating illegally in many parts of the island.”

The resolution was deferred in part due to concerns it placed enforcement in the hands of residents, essentially bypassing the city Department of Planning and Permitting.

Menor said his amendment reaffirms the Department of Planning and Permitting’s enforcement jurisdiction by specifying that a resident cannot file a legal action against a person alleged to be operating an illegal vacation rental until six months after the resident has first filed a complaint with the department. His second amendment clarifies that the resolution would not apply to short-term vacation rentals in areas where they are already a permitted use, such as resort areas.

“I think (Resolution 17-52) is a horrid, horrid excuse for a resolution,” said Will Page, Kailua resident and proponent of vacation rentals. “(It) violates too many constitutional rights. You can’t stalk people, you can’t look in their windows, you can’t go through the trash looking for tax returns.”

A poll conducted for the Honolulu Star-Advertiser by Ward Research and released last month showed some 63 percent of Oahu residents generally think homeowners should be allowed to rent part or all of their homes to visitors.

“It’s not a life-or-death industry, but it’s another alternative. Hotel rooms are really expensive,” said Greg Oyape, an Ewa Beach resident who participated in the poll.

Kaimuki retiree Roger Flatt also participated in the poll and said he does not think homeowners should be allowed to rent space to visitors.

“We live in a small 16-unit condo, and we had a renter last year that rented out a room with Airbnb. It was just a mess,” Flatt said. “I’m not opposed to Airbnb — we use it around the world and it works out fine — but there has to be some oversight. Some places shouldn’t have Airbnb.”

Menor said in regard to the Toy study: “It should be pointed out that the mix of visitor accommodations that are presently available to tourists include not only traditional full-service hotel rooms, but also timeshares, condominium hotels, and bed-and-breakfast rentals in addition to vacation rentals.

“In this regard, visitors will continue to have many options available to them even if the number of illegal vacation rentals dwindles as the city steps up its enforcement actions,” Menor said.