Park City’s Transient Room Tax is collected on lodging stays of under 30 consecutive days. According to Park City Municipal’s finance team, TRT revenue is down over 25% this fiscal year. KPCW’s Sean Higgins spoke to some local lodging managers to see how the industry has fared over the COVID-19 pandemic.
Looking purely at the numbers, the pandemic has been harsh on the local lodging industry. Occupancy has been down by double digits in many months and TRT revenue, which is only collected on lodging, is down over 25% since last July.
Comparing that number with general sales tax revenue, which is down roughly 9% this fiscal year, lodging has been a sector of the local economy that has fared worse than many others.
But TRT revenue and occupancy numbers don’t necessarily paint a complete picture.
Jim Allred is a Park City Lodging Association board member and the General Manager of the Hyatt Place hotel. He says make no mistake, lodging was down, but the gap between the TRT and sales tax revenues can be at least partially explained by the lower rates offered during the pandemic.
“Our occupancy followed typical trends, but on a smaller scale, just like our market was a smaller scale,” says Allred. “But collecting that TRT tax off of a, say an average of a $169 rate compared to an average of a $259 rate is a significant difference, more than enough to close that gap, in my opinion.”
Allred adds that, at least at the Hyatt, he believes rates could have been kept higher this ski season. He says he believes many of the people who came to town were the hardcore skiers and recreationalists who would have been here regardless of the price.
Rates for short-term rentals like those found on websites like Airbnb and VRBO also factored into the TRT slump.
Sarah Brown manages over 25 short-term rentals in the area through her company, Ghost Host, and is a local liaison to Airbnb. She says the trend over the last year has been significantly more last-minute bookings.
The rates for Brown’s rentals progressively dropped the closer you got to an empty booking date. She says bookings were made an average of 21 days in advance over the last year, down from upwards of 50 before the pandemic. She agrees with Allred and said, all things considered, rates probably could have been kept higher.
“Something we saw this winter, while our occupancy at the end of the day ended up being similar to other years, the amount we brought in was about 15-20% less,” Brown says.
The absence of an in-person Sundance Film Festival in late January and early February also took a heavy toll on the industry. According to Park City Municipal’s data, TRT was down 42% year-over-year in January.
Brown says one of the highest-earning segments of the year was simply nonexistent. For example, a two bedroom, two bath rental that normally goes for $500 per night in Old Town would regularly be rented for nearly double that rate during Sundance.
“We didn’t have that this year, so right there, January already is gonna have a really depressed transient rate tax because we didn’t have Sundance, which insulates our rates in lodging incredibly,” explains Brown.
However, Brown says short-term rentals were buoyed over the last year by multi-week, or sometimes months-long stays last summer and fall thanks to families looking to escape the city and remote schooling as the norm. Once winter rolled around, roughly 85% of her stays were only three to four days long.
One common trend seen across both short-term rentals and traditional lodging was a strong February and March.
Brown says February was her strongest month and spring break in March brought in good numbers as well, with her revenue down only about 10% from last year.
Allred says the Hyatt experienced a significant post-Sundance surge as well.
“Overall, we had some different snow this season and it was kind of a slow start, but it picked up,” he says. “February and March were the champions. None of that is unique to this year, we’ve seen it all before, just all on a smaller scale. If I could say one thing that we could have done better is keeping a higher rate.”
Official tax numbers are released on a two-month delay by the Utah State Tax Commission. February’s report is expected to be released later in April.