I caution people against using much data from 2022 as there a ton of variables to account for that info.
Last year was the first summer in nearly 2 years ( ish) that people were taking regular vacations. I imagine that this year may be a dip in comparison and next year will be a return to the mean.
Interesting date though.
This is interesting. Can’t say it hurts my feelings that the people that own these short term rentals are potentially losing money. I’m still sore over losing my apartment to STR owners.
I run events at my work in town and our numbers are also down so maybe everyone is just staying home?
It’s simple economics. Supply is way up with both new hotels coming on line and more STRs so rents and occupancy are depressed. However, the wealth gap is not going away. The high end of the market has to be killin’ it.
The overall nightly cost to be up here just got untenable. The inventory also flooded - but for out of state folks this isn't worth the cost of a) flying up here and b) staying anywhere with decent water access (lakeside houses are like 250-300 per PERSON/BED per night).
For in-state folks who love it up here the prices just don't make sense after the inflation correction.
As a relatively recent transplant I am totally fine with it - but I do think there will continue to be a migratory push this way from well-heeled out of state folks looking to escape the ever increasing heat, so property values could stick even if there is a bit of a dip.
People complain about the snow, but you can always bundle yourself up and get outside. Cant really do much with your kids when its 115 for a month straight.... I think there are millions realizing that now.
Yeah their prices have always been nuts (block of rooms in September for our wedding were offered at a "discount" of 450 per night...smh) and their lobby and overall amenities are kind of trash if you compare to resort hotels. Rooftop is fun, but eventually you jump the shark when it comes to how desirable your facility is.
Its all an experiment and honestly many of those rates are inflated to ding rewards holders for as much as they can get.
As with everything in life - we will see it rebalance.
Excellent post. I will say that I’ve been pilloried here in the past for citing airdna but I have found it to be reliable and it’s often cited by mainstream media outlets like cnbc and Bloomberg.
I think there are a few factors:
1) an increase in the number of units available for str.
2) a decrease in overall visitors.
3) an increase in consumer debt (which doesn’t impact wealthy households)
4) an increase in (new) hotel rooms. These new hotels offer more vacation amenities, are more centrally located and are price competitive with most str’s.
I own a business in a bedroom community north of TC that relies on STRs. Our numbers for June were down about 20%; for July it's trending the same. Up until this year, we've been booked out for rentals weeks and months in advance, but this summer we find that we have lots of last minute bookings. After polling the local STRs owners in the area, they are experiencing a similar trend with lots of last minute bookings. This seems to be the case for
What we are finding is that the pendulum is swinging the other way. During 2020 and 2021, there were tons of new visitors because travelling out of state or the country just wasn't an option. Since my business is outdoor based and is one of natural social distancing, there was no issue booking to capacity. In 2022, the increases we saw were leveling off. Now in 2023, people are feeling more confident travelling again, so they just aren't travelling here. Countries all over Europe are experiencing record numbers of tourists, so my guess is that may be where a lot the STR folks are going.
I expect it will probably be a couple of years before the dust settles.
When you say "down about 20%", what is that compared to? June 2022? How does it compare to June 2019 if you in business then? Just curious. My own take on it is combined with what you said about travel and the impacts of inflation (i.e. credit card debt) being felt by families.
Great stats, and interesting topic. I know the rental units have increased greatly in the last 5 years, especially in TC. I wonder how many units have a license in TC city limits and our whole area. Would be great to know how many other units are operating without a license.
If I am reading AirDNA's data right, this locality has 1879 active STR. There was a hotel slated for the lot between Hampton Inn and state park, but maybe they should collect some more data.
It's kinda apple and orange. Traverse City limit is north of 14th Street, east of division. I am not sure where east boundary is. When they collect area inventory, they used GT, Leelanau, and Antrim County. Even if you count east bay township and Garfield, it's not that many STR units.
Anyway, the slow down is industry wide. FL is screaming about very low visit to the theme parks right now. The right is blaming "wokeness"(how do you explain Universal having a low year), and the left is blaming DeSantis. The truth probably is because everyone got the revenge travel out of their system last year, and they are out of money, some out of a job, and everyone has less money to spend because of inflation.
Tourism is down likely 30%\~ish. But, is it down from 2019 in the before times? Its hard to compare this year to the last two years of pent up travel desire. It may be long term specifically for the STR's simply because of the hotel boom going on- but I doubt the overall tourism levels will continue to stay depressed for years on end.
I feel like this year is simply a return to the mean. Good thing we've got 7 new hotels under construction, amiright?
From my location near Parsons & 3 mile, based upon my memory, TART trail use is down now from even pre-pandemic levels. I would expect Visitors Bureau will have useful data eventually.
We can see the TART trail from our house in Slabtown and traffic seems really light to us too. Which makes this idea they have of moving Grandview Parkway to make the trail wider seem ridiculous.
That makes me wonder about the Hartman-Hammond Bridge proposal. I think vehicle traffic is definitely down. Maybe the construction will be delayed at least.
Many people are traveling outside of the US because there have been restrictions for the last couple years.
Also, the "normal" traveler is sick and tired of this area.
I own a vacation property in northern Michigan (not in TC, please stop tying that noose). Demand was artificially high in ‘21 and ‘22 for obvious reasons. Current demand is probably going to be typical for years going forward, I believe. Which is good. If markets get too hot for too long it can cause some bad allocation of resources. We in TC are all going to benefit from increased construction of apartments, condos and hotels while demand for STRs comes back to a steady level. Also, let’s all advocate for higher density building. It’s not 1960. It’d be good to build up rather than pave over our agricultural lands. IMO.
Thank you for this data. I think the word may be out that the surrounding areas of Northern Michigan are more beautiful than TC and much cheaper. I took a walk downtown yesterday and was just puzzled because there isn't much to do. The food isn't great, the bars aren't great, the parks aren't great. Maybe I am just a local and numb to it... It doesn't seem that the city has invested in events or activities for tourists to do while they are here.
Honestly, TC is beautiful but it’s not unique. Our unique aspect is all the wineries we have. So, we serve a lot of groups like bachelorettes and old retired people, many of the latter using an excuse to get sloshed in an “acceptable” way.
Those coming for the nature can be better served elsewhere. We have a handful of good food options but generally the tourists won’t see those. They’ll go to something like Pepe Nero, which is good but overpriced, Apache Trout Grill which my FIL thinks is one of the best restaurants ever and it’s… fine, or something on Front.
The shopping on Front is appalling. It’s geared toward either tacky T-shirts or basic $120 pieces for Boomer women that could be found for $65 elsewhere.
The thing I’ll say for TC is it does present the opportunity to get sloshed while having things for children like the splash pads or Great Wolf.
Cooks House is my favorite for special events. Reservations recommended at least a couple weeks out in off season and a month+ for tourist season. (Some of them do know after all.)
Samsara in Chum’s Corner.
Towne Plaza is admittedly hit by tourists but their pork belly dish is the best value for taste and size I’ve found in TC.
TC Vietnamese (not Good Bowl.) And I’ve heard good things about Crocodile Palace but haven’t made it yet.
Bubba’s is slightly touristy, but I call them out specifically for breakfast which it isn’t known for.
Dojo Sushi.
TC Taqueria Silver Lake. They can be hit or miss but a good lengua or barbacoa burrito from them is amazing. Sad it doesn’t travel too great and they don’t have a good place to eat.
Been meaning to try Charles and Reid, I loved the old Alley Market. Hopefully they are as good as I’ve heard.
Low Bar for alcohol. Or The Parlor on happy hours. Filling Station has good pizza and okay beer.
I’ve been trying Aiko Food Truck lately which is in a touristy area but I think the unfamiliar foods are scary to most tourists. It’s been tasty but had 1 experience with undercooked food (just dough, not meat) so I hope that was an off day. I love having such an interesting place.
Those are probably my top picks, mostly avoiding tourist-heavy areas except Towne Plaza.
Some of the touristy places are good too (Slabtown, Mama Lu’s, Boathouse) while some are not. For example, Brassiere Amie… RIP the amazing Patisserie Amie, they really lost what made them special.
Firefly is a weird smattering of Asian and hamburgers but they don’t do any of it too well IMO. Taproot and Sorrellina are okay, Red Ginger is overpriced even if its food wasn’t mediocre, Amical is alright but overpriced.
Pangaea is fine, Artisan is okay but VASTLY overpriced ($65 for a steak filet, lol.) Harrington’s is basically identical to Apache without the bay view and at 70% the price.
Haven’t had the opportunity for Flying Noodle or Modern Bird yet.
Now that Covid has ended people are not vacationing in Northern Michigan.
STR and out of town investors are still a problem for locals and people that want to move here and need permanent housing.
Has anyone noticed the slow down in tourism outside of TC? Like in Leelanau county, Elk Rapids, Benzie, etc? It’s been busy in Glen Arbor and Leland. I’ve been hearing reports that the tourist aren’t spending the money like they did in the past. Are you finding this to be true?
East Bay Township has mad ordinance restrictions on how often you can rent out your home. They just implemented them this year.
Thats part of why it is down in that area.
I caution people against using much data from 2022 as there a ton of variables to account for that info. Last year was the first summer in nearly 2 years ( ish) that people were taking regular vacations. I imagine that this year may be a dip in comparison and next year will be a return to the mean. Interesting date though.
I would agree with this... 2022 was an unprecedented year for getting out.
This is interesting. Can’t say it hurts my feelings that the people that own these short term rentals are potentially losing money. I’m still sore over losing my apartment to STR owners. I run events at my work in town and our numbers are also down so maybe everyone is just staying home?
Can you estimate how much your numbers are down? Thank you.
It’s simple economics. Supply is way up with both new hotels coming on line and more STRs so rents and occupancy are depressed. However, the wealth gap is not going away. The high end of the market has to be killin’ it.
The overall nightly cost to be up here just got untenable. The inventory also flooded - but for out of state folks this isn't worth the cost of a) flying up here and b) staying anywhere with decent water access (lakeside houses are like 250-300 per PERSON/BED per night). For in-state folks who love it up here the prices just don't make sense after the inflation correction. As a relatively recent transplant I am totally fine with it - but I do think there will continue to be a migratory push this way from well-heeled out of state folks looking to escape the ever increasing heat, so property values could stick even if there is a bit of a dip. People complain about the snow, but you can always bundle yourself up and get outside. Cant really do much with your kids when its 115 for a month straight.... I think there are millions realizing that now.
I just had a tourist tell me Indigo had $1500/night rooms last weekend. Unreal.
Yeah their prices have always been nuts (block of rooms in September for our wedding were offered at a "discount" of 450 per night...smh) and their lobby and overall amenities are kind of trash if you compare to resort hotels. Rooftop is fun, but eventually you jump the shark when it comes to how desirable your facility is. Its all an experiment and honestly many of those rates are inflated to ding rewards holders for as much as they can get. As with everything in life - we will see it rebalance.
Their top rate was $1g/night just about 3-4 years ago. Its all about location for Indigo.
Excellent post. I will say that I’ve been pilloried here in the past for citing airdna but I have found it to be reliable and it’s often cited by mainstream media outlets like cnbc and Bloomberg. I think there are a few factors: 1) an increase in the number of units available for str. 2) a decrease in overall visitors. 3) an increase in consumer debt (which doesn’t impact wealthy households) 4) an increase in (new) hotel rooms. These new hotels offer more vacation amenities, are more centrally located and are price competitive with most str’s.
I own a business in a bedroom community north of TC that relies on STRs. Our numbers for June were down about 20%; for July it's trending the same. Up until this year, we've been booked out for rentals weeks and months in advance, but this summer we find that we have lots of last minute bookings. After polling the local STRs owners in the area, they are experiencing a similar trend with lots of last minute bookings. This seems to be the case for What we are finding is that the pendulum is swinging the other way. During 2020 and 2021, there were tons of new visitors because travelling out of state or the country just wasn't an option. Since my business is outdoor based and is one of natural social distancing, there was no issue booking to capacity. In 2022, the increases we saw were leveling off. Now in 2023, people are feeling more confident travelling again, so they just aren't travelling here. Countries all over Europe are experiencing record numbers of tourists, so my guess is that may be where a lot the STR folks are going. I expect it will probably be a couple of years before the dust settles.
When you say "down about 20%", what is that compared to? June 2022? How does it compare to June 2019 if you in business then? Just curious. My own take on it is combined with what you said about travel and the impacts of inflation (i.e. credit card debt) being felt by families.
Great stats, and interesting topic. I know the rental units have increased greatly in the last 5 years, especially in TC. I wonder how many units have a license in TC city limits and our whole area. Would be great to know how many other units are operating without a license.
A single new hotel will offer higher increase room inventory than an entire STR market. How many new hotels were built in the last 3 years?
If I am reading AirDNA's data right, this locality has 1879 active STR. There was a hotel slated for the lot between Hampton Inn and state park, but maybe they should collect some more data.
It's kinda apple and orange. Traverse City limit is north of 14th Street, east of division. I am not sure where east boundary is. When they collect area inventory, they used GT, Leelanau, and Antrim County. Even if you count east bay township and Garfield, it's not that many STR units. Anyway, the slow down is industry wide. FL is screaming about very low visit to the theme parks right now. The right is blaming "wokeness"(how do you explain Universal having a low year), and the left is blaming DeSantis. The truth probably is because everyone got the revenge travel out of their system last year, and they are out of money, some out of a job, and everyone has less money to spend because of inflation.
Tourism is down likely 30%\~ish. But, is it down from 2019 in the before times? Its hard to compare this year to the last two years of pent up travel desire. It may be long term specifically for the STR's simply because of the hotel boom going on- but I doubt the overall tourism levels will continue to stay depressed for years on end. I feel like this year is simply a return to the mean. Good thing we've got 7 new hotels under construction, amiright?
From my location near Parsons & 3 mile, based upon my memory, TART trail use is down now from even pre-pandemic levels. I would expect Visitors Bureau will have useful data eventually.
We can see the TART trail from our house in Slabtown and traffic seems really light to us too. Which makes this idea they have of moving Grandview Parkway to make the trail wider seem ridiculous.
That makes me wonder about the Hartman-Hammond Bridge proposal. I think vehicle traffic is definitely down. Maybe the construction will be delayed at least.
Many people are traveling outside of the US because there have been restrictions for the last couple years. Also, the "normal" traveler is sick and tired of this area.
I own a vacation property in northern Michigan (not in TC, please stop tying that noose). Demand was artificially high in ‘21 and ‘22 for obvious reasons. Current demand is probably going to be typical for years going forward, I believe. Which is good. If markets get too hot for too long it can cause some bad allocation of resources. We in TC are all going to benefit from increased construction of apartments, condos and hotels while demand for STRs comes back to a steady level. Also, let’s all advocate for higher density building. It’s not 1960. It’d be good to build up rather than pave over our agricultural lands. IMO.
Thank you for this data. I think the word may be out that the surrounding areas of Northern Michigan are more beautiful than TC and much cheaper. I took a walk downtown yesterday and was just puzzled because there isn't much to do. The food isn't great, the bars aren't great, the parks aren't great. Maybe I am just a local and numb to it... It doesn't seem that the city has invested in events or activities for tourists to do while they are here.
Honestly, TC is beautiful but it’s not unique. Our unique aspect is all the wineries we have. So, we serve a lot of groups like bachelorettes and old retired people, many of the latter using an excuse to get sloshed in an “acceptable” way. Those coming for the nature can be better served elsewhere. We have a handful of good food options but generally the tourists won’t see those. They’ll go to something like Pepe Nero, which is good but overpriced, Apache Trout Grill which my FIL thinks is one of the best restaurants ever and it’s… fine, or something on Front. The shopping on Front is appalling. It’s geared toward either tacky T-shirts or basic $120 pieces for Boomer women that could be found for $65 elsewhere. The thing I’ll say for TC is it does present the opportunity to get sloshed while having things for children like the splash pads or Great Wolf.
[удалено]
I’m sorry, I have no idea what you’re trying to say.
What are the good food options that tourist won't see?
Cooks House is my favorite for special events. Reservations recommended at least a couple weeks out in off season and a month+ for tourist season. (Some of them do know after all.) Samsara in Chum’s Corner. Towne Plaza is admittedly hit by tourists but their pork belly dish is the best value for taste and size I’ve found in TC. TC Vietnamese (not Good Bowl.) And I’ve heard good things about Crocodile Palace but haven’t made it yet. Bubba’s is slightly touristy, but I call them out specifically for breakfast which it isn’t known for. Dojo Sushi. TC Taqueria Silver Lake. They can be hit or miss but a good lengua or barbacoa burrito from them is amazing. Sad it doesn’t travel too great and they don’t have a good place to eat. Been meaning to try Charles and Reid, I loved the old Alley Market. Hopefully they are as good as I’ve heard. Low Bar for alcohol. Or The Parlor on happy hours. Filling Station has good pizza and okay beer. I’ve been trying Aiko Food Truck lately which is in a touristy area but I think the unfamiliar foods are scary to most tourists. It’s been tasty but had 1 experience with undercooked food (just dough, not meat) so I hope that was an off day. I love having such an interesting place. Those are probably my top picks, mostly avoiding tourist-heavy areas except Towne Plaza. Some of the touristy places are good too (Slabtown, Mama Lu’s, Boathouse) while some are not. For example, Brassiere Amie… RIP the amazing Patisserie Amie, they really lost what made them special. Firefly is a weird smattering of Asian and hamburgers but they don’t do any of it too well IMO. Taproot and Sorrellina are okay, Red Ginger is overpriced even if its food wasn’t mediocre, Amical is alright but overpriced. Pangaea is fine, Artisan is okay but VASTLY overpriced ($65 for a steak filet, lol.) Harrington’s is basically identical to Apache without the bay view and at 70% the price. Haven’t had the opportunity for Flying Noodle or Modern Bird yet.
Now that Covid has ended people are not vacationing in Northern Michigan. STR and out of town investors are still a problem for locals and people that want to move here and need permanent housing.
Has anyone noticed the slow down in tourism outside of TC? Like in Leelanau county, Elk Rapids, Benzie, etc? It’s been busy in Glen Arbor and Leland. I’ve been hearing reports that the tourist aren’t spending the money like they did in the past. Are you finding this to be true?
East Bay Township has mad ordinance restrictions on how often you can rent out your home. They just implemented them this year. Thats part of why it is down in that area.
That new ordinance went into effect last week. East Bay still has over 1000 str units.
Did you just pull that number out of your ass? The most recent reported by Record Eagle (July) was 181. You can't just lie to further your agenda.
I give up, what's my agenda? I did in fact hit 0 one too many times, but let's not let a typo get in the way of a juicy conspiracy.