Uncertainty reigns for vacation rental operators

Earlier this week, something unimaginable happened for the small, tourism-based city of Whitefish: city officials sent a letter to short-term rental and lodging properties telling them to stop taking reservations.

The letter, signed by Whitefish Mayor John Muhlfeld and City Manager Dana Smith, urges “short-term rentals, hotels, motels, and bed and breakfast businesses to voluntarily refrain from accepting reservations for stays during the COVID-19 emergency for non-essential purposes through April 30.”

The letter comes in response to reports of popular ski towns becoming hot spots for COVID-19 despite their small permanent populations. According to an article by the Washington Post, Blaine County in Idaho – home of the famous Sun Valley Resort – has one of the highest cases per capita in the country, and the virus has overwhelmed the hospital in Ketchum.

To prevent such a situation happening in Whitefish, the city decided it had no choice but to tell visitors to stay away.

The decision came after a March 27 article in the Montana Free Press suggesting vacation-rental revenues were significantly up across Montana as the outbreak spread in early March. According to representatives at AirDNA, which compiles booking data for the short-term rental industry, people were escaping major cities and retreating to vacation rentals or second homes on the heels of the coronavirus outbreak.

According to the company’s data, between March 1 and March 16, short-term rental revenue estimates for Whitefish alone increased from $1.1 million in 2019 to $2.1 million to 2020.

Whitefish Escapes Luxury Vacation Rentals canceled a promotion offering “safe haven lodging” to out-of-state customers following community backlash. It posted an apology on its Facebook page on March 27 and said it was canceling all short-term rental bookings for April.

The city’s letter addressed the phenomenon of people attempting to escape to rural areas.

“The city has been made aware of a recent trend of individuals leaving areas with high concentrations of COVID-19 cases in order to ‘shelter in place’ in small communities such as ours,” the letter states. “While Whitefish has always taken pride in being a welcoming and inclusive community, this trend presents a very real risk to our citizens.”

RHONDA FITZGERALD, who owns the Garden Wall Inn in Whitefish, said she stopped taking guests in mid-March and will not be accepting reservations until April 30.

While she believes it is the right decision to discourage people from visiting the Flathead Valley right now, she said “the whole situation is going to have a severe impact on our business.” She already lost the revenue from visitors who would usually come to ski during spring break.

The effect on the Whitefish economy has been pronounced. According to a March 31 press release from the Whitefish Convention and Visitors Bureau, businesses within Whitefish city limits were losing an estimated $732,000 in revenue a day in March compared to the same time period last year.

The release states the losses were calculated based on a survey of 115 Whitefish businesses.

“These are difficult numbers to see,” said Dylan Boyle, executive director of Explore Whitefish, in the release. “But this data will help us to continue to rally around our local business community and advocate for future business assistance from local, county, state and federal elected officials and governments.”

When it was all said and done, lodging facilities ended up losing about $75,000 per day in March, though this does not capture the changing situation by month’s end. While restaurants can still generate some revenue through takeout and curbside service, Fitzgerald and other short-term rental operators who comply will be without paying customers until the beginning of May, at the earliest.

Fitzgerald said she is expecting to lose most of her revenue for the year. While she said the inn is usually “completely sold out” for July and August by this time of year, right now she has “only a small percentage” of the reservations she usually has.

She said in an optimistic scenario she would recapture some of the customers who canceled, and she will make an effort after the pandemic subsides to bring in more “regional” customers. But she thinks COVID-19 is going to permanently impact the “destination visitor” market for the season.

“When it’s OK [to travel again], it isn’t going to be like a switch flipping,” Fitzgerald said. She said fear and financial uncertainty will probably keep many of those destination visitors away no matter what.

FLATHEAD COUNTY Commissioner Phil Mitchell said there are no plans at this time for the county to issue a recommendation to keep visitors away, but he said he is “glad the city of Whitefish did it.

“Whitefish and Glacier Park being shut down is setting the tone” for the short-term rental market, Mitchell said.

Mitchell said the county is following the March 30 directive issued by Gov. Steve Bullock discouraging out-of-state visitors.

Bullock also asked anyone coming from out-of-state to quarantine themselves for 14 days.

Smith, the Whitefish city manager, said her office in the process of calling all licensed short-term rental facilities to see if they are voluntarily complying. There are approximately 175 licensed operators in the Whitefish city limits, she said.

Within the Whitefish city limits, all operators of short-term rentals – even for AirBnB and VRBO – must have a business license.

Smith said the vast majority are complying, and the few still taking bookings are seeing an increase in cancellations.

She added she “would hope anyone in the surrounding community” – outside the city limits – “would comply with this request.”

“This storm will pass, and when it does, Whitefish will be here for you,” Boyle said in an address on YouTube posted by the City of Whitefish on March 27. “Until that day comes, have hope, and please stay home. Maybe you can look at some family photos from your last visit to Whitefish and remember those good times.”

“Whitefish will be ready to welcome travelers from all walks of life when the world is ready to travel again,” he said.

For business owners like Fitzgerald, that time cannot come soon enough. But like the rest of the world, she has no idea when normal life will resume or when the rural communities like Whitefish will be open for business.

Reporter Colin Gaiser may be reached at cgaiser@dailyinterlake.com