In the short-term rental riches will discuss investing in real estate with a specific focus on short term rentals quick action items to wire. Scale your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term rental riches podcast here we are another week and another topic related to short term rentals but in a round about way and this week I got to see. This topic is a bit of a Downer it’s a little scary for a lot of people out there these are tough tough times this week we’re talking about the hotel industry I’ve got some facts for you from the Merican hotel and lodging association as well as a couple other sources when I talk about the impact of the covert is had and that is still having and what the future might look like I’ll bring up a few hotels that are already close hotels that were famous and they’ve been around for a century they maybe you’ve heard about we’ll discuss what happens if if these numbers are right and this wave of closures and troubles for the hotel industry continues what it means for us as a short term rental operators and how it could be really good for us almost in an unfair way so let’s just dig in real quickly I’ve got some stats here from American hotel and lodging association and these are recent stats they did a recent survey which came back and said 2 thirds of hotels will not be able to withstand another 6 months of the current occupancy levels that they’re having that means they will go out of business like many already have right now a lot of the ones that have gone out of business already here in the the denser urban areas that she’s been really highly regulated and completely locked down so urban has definitely been hit the hardest you know there are some hotels potentially have done better out in remote areas that are more spacious but in general this has been a year like no other for the travel industry and included in our short terminals depending on where we have them the HLA also said 60 percent hotels in the USA have half their pre pandemic staff working full time unemployment trickles down right if if someone’s not making. Money from their job well then they’re not spending money in their restaurants and they’re not spending money on groceries and other items and entertainment so that trickles down has a really big impact on the economy another part of the study said that the without more action from Congress without more financial support that half of U. S. hotels could face for closure in the next 6 months I was watching someone recently that explains what’s happening. In terms of an earthquake and a tsunami and I thought I think that’s a really good analogy basically said you know when an earthquake happens it takes out a lot of stuff can take a lot of stuff you can crumble buildings and do all that but if you’re next to the coast a lot of times the big damage comes from the tsunami and that takes time right it builds up and it builds up and then boom it comes in and it just washes everything away so sadly that’s kind of what is happening I mean is as we continue to have restrictions with cove it and hotels continue to have really low occupancy levels have that tsunamis common for a lot of them unfortunately so let’s talk about a couple more stats here some big hotel names that maybe you’ve heard of Hilton for example and their third quarter losses they just reported a net loss of $81000000 just in the third quarter we have high it just reported losses of $161000000 just another quarter now MGM resorts you might be familiar with some of their hotels in Las Vegas get this they lost $535000000 just in the third quarter. Wow that is. Oh man I feel bad for them I gotta say I do I really do I feel bad for the hotel industry because that’s a short term rental operators we’ve really had an unfair advantage in all of this to capture a lot of the people that may have been going to hotels or shut down or locked up the men come in a short term rental so we haven’t done that bad in all go into that a little bit more in the end I just I want to go over a couple more stats with the hotel industry here and also a few other major hotels that are already close that have closed they are gone with no plans of coming back sadly. Where intermission thank you so much for listen in the podcast it’s been fun for me and I look forward to getting up so it’s out if you have a specific topic that you’d like us to talk about send us a comment and let us know you can send it to contact at rest methods.com and if you haven’t already subscribed and given us a review that would be greatly appreciated too and lastly if you know someone that you think would find benefit in this as well send it on over to help us keep growing and help us to get amazing content back to you without further ado let’s jump back into. 1 is the luxe rodeo in Beverly hills and LA they are closed they’re gone they were very famous hotel next to all the most famous outlets in Beverly hills they’re gone the marks in Niki I don’t know if I pronounce right actually but in New York City their designated a landmark in 19981 of the most famous hotels in New York John out of the picture not here anymore Roosevelt hotel in Manhattan it’s been around for over 100 years it’s gone out of business these are really big hotels and make hundreds of millions of dollars are that have values around those figures and they’re just they’re gone I think that this is probably the tip of the iceberg unless things change quickly unless regulations loosened up or the other thing is the government can come back and provide financing but that financing has to be paid back and most experts including CBRE and the D. A. L. HA in a lot of these places to do research on the industry aren’t expecting a recovery for for a couple years at least 2023 so we got a long way to go hopefully they can hang tight but what what happens if these hotels continue to close down well first of all we lose a lot of jobs sadly but we also have less supply in the market we have less places for people that still want to travel and that are still able to travel there’s less places for them to stay and I believe in at least from viewing my own properties my own occupancy is that these people are staying in short term rentals and that’s why we’ve seen some of our daily rates going up versus this time last year as sad as it is for the hotel industry it’s actually kind of good for short term rentals and we really. Have had an unfair advantage for city to come in and regulate you know 2000 individual short term rentals it’s much more difficult than it is for them to regulate one big massive famous hotel that has common areas and an elevator is a lot of places that are difficult in these current times with cove itself we really lucked out on this one hopefully travel bounces back hopefully we come out these vaccines but things are not looking good for the hotel industry and as I mentioned it’s kind of like that waves that waves building and some of these things are gonna take time right it’s gonna take a year or more and a lot of cases for the loans become that delinquent that they’re actually going to foreclosures so this is trickling up I guess you could say we we’ve got the investors that own these hotels they’re they’re getting hit hard but it’s gonna take awhile for that to happen so going forward I think there’s gonna be a less supply in the hotel industry that’s going to put more demand on short term rentals this is my theory this is kind of what I’m seen already and this is what I expect to happen but along with that you know we’ve talked about in prior episodes that people just enjoy staying in short term rentals they’re different than hotels they have kitchens they have private entrances they have more space they can bring their family and stand one space versus staying in a hotel so another thing that this trend with the hotel closures and regulations has had on the economy is that a lot of these people that were going to stay in hotels and couldn’t have stayed in short term rentals for the first time so they’ve just experienced what it’s like to stay in a short term rental and a lot of them as we’ve seen the short terminal industry explode it’s very likely they figured out wow I actually like the short term rentals more than I liked the hotels and hope. Does know that too that’s why newer hotels are being built a little more like short term rentals a little more unique cell I feel bad for all those in the hotel industry who would assign this common this is the worst time for the travel industry or for the hotel industry I should say in particular in our lifetimes it’s never been this bad and it would have been really hard to see that common so I feel really bad for them on the flip side for a short term rental investors we’ve got more demand coming our way we’ve got more people discovering short terminals because they can’t stay in hotels so hang in there hopefully your guys as short term rentals are one of these areas that are really benefiting and that aren’t in the super super dense area but keep that in mind I think the way it is common I don’t I don’t know how to spruce it up make it sound better so let’s just hang tight and until next time have a wonderful day. So we just had our live virtual fan and I gotta say it was a blast as always we done to live events before and this was basically a replica except for we got to attend from the comfort of our own homes and the beautiful thing about doing a weapon or is it was easy to record so if you missed it jump over to rest methods.com forward slash virtual and you can get your copy we jam packed it full to the brim everything that I’ve found to be the most important setting up your short term rentals and making sure you’re earning maximum revenue in the highest occupancy but all while not giving up all of your time in creating passive systems so I give you all my resources we go over my actual properties case studies with pre and post code numbers and in my outlook in the future I think there’s a ton of opportunity so if you guys are just getting started or you have several properties already there’s no need to reinvent the wheel get all my tips and tricks things that I’ve learned and save yourself the headache and frustration just head over to rest message star forward slash virtual I know you’ll find a ton of value in it enjoy.

RELATED PODCAST EPISODES

• Episode 38: Is a Short Term Rental the Best Use for Your Real Estate‪?‬
• Episode 37: Remote Airbnb Check In vs. Check In at One of the Largest Hotels in the World‪!‬
• Episode 32: Why Hotels Are Envious of Short-Term Rentals (COVID Impacts)‬
• Episode 21: Money coming your way! (And Industry Updates)
• Episode 19: Where do we stand in the current crisis?