White Paper Details Economic Impact of Vacation Rentals

Published on: September 16, 2009

Instant Software, Inc.’s research department, in conjunction with a Vacation Rental Managers Association (VRMA) committee, has released a comprehensive White Paper laying out a blueprint for identifying the economic impact of vacation rentals on state and local economies. While it targets state and local officials, it also hones in on educating vacation rental managers on how their industry plays a prominent role in resort economies.
This research outlines the many ways that vacation rentals generate substantial economic benefit in areas outside of the tourism segment, such as driving local construction, real estate, finance and insurance industries. In addition, it shows that economic contributions of vacation rentals are not fully understood and are poorly documented in analytical methodologies commonly used by state planners.

“Instead of vacation rentals being stereotyped as inconsequential to the tourist economy, the research shows the many positive influences this sector of the market has on any community in which they reside,” said Alex Risser, president of the VRMA. “This is truly insightful information which allows those of us in this profession to see and communicate the large ripple effect our business operation has on the surrounding community’s economic environment.”

Unlike owners of hotels and motels, investors in vacation homes expect to subsidize rentals. For example, they expect mortgage and management costs to exceed rental revenue. This subsidized lodging can facilitate tourism growth and enhance tax revenues in resort areas where large hotels are not economically sustainable. State and civic leaders will be better poised to manage their communities by understanding this and the other investment dynamics that tie vacation homes to a resort community’s economic health.

Officials can identify the numbers needed to calculate the economic impact on their community by using the research provided. These numbers serve to better inform state and local governments, who in turn will perhaps be more willing to recognize and support this industry as a major source of growing its economy.

The White Paper outlines how a better understanding of vacation rental homes can affect debates typically arising in resort communities over ideas such as distribution of tax burden among property owners, residents and tourists, large rental homes and other high-density accommodations, as well as tourism growth where hotels are not economically sustainable. For more information, visit www.vrma.com/resource/resmgr/files/industryimpactwhitepaper2.pdf.