Vacations shift into longer, seasonal stays and relocation
But when the dust settles, will these Covid-related impacts on mountain destinations remain?
The Insights Collective is a pandemic economy think tank, established to provide insights and actionable recommendations to public and private sector decision makers in leisure travel destinations. For more information, visit http://www.theinsightscollective.com.
The pandemic has accelerated the exodus from dense, crowded urban areas to remote, unpopulated resort areas. This in-migration is traced back to the perception of personal safety that can be obtained by living in uncrowded, unspoiled destinations.
A Pew Research study conducted in June noted roughly one in five Americans either have relocated due to the pandemic or know someone who has. The study further found that among U.S. adults who moved due to the pandemic, 28 percent say the most important reason was to reduce their risk of contracting the virus.
As people relocate to mountain towns across the West, leisure activities that were previously experienced during typical vacation periods are now pursued daily. Research on physical activity has shown that when people live close to trails and greenspace, they tend to be more physically active and thus healthier.
Workers remain virtual
Accelerating the trend are work-from-home policies and a work-from-anywhere culture amplified by the technology industry. These same work from home opportunities are concurrently being offered by many school districts, making the ability to relocate easier.
Support Local Journalism
“Taken together, these factors are creating both challenges associated with more full-time resident infrastructure, particularly housing, and prospective benefits including flattening peak holiday and school break periods when resorts are historically constrained, and filling in low-demand periods when resort resources are often underutilized,” said Ralf Garrison, Insights Collective founder and strategist. “With prospective Covid capacity constraints this winter, this could help resort communities better balance visitor supply-and-demand to the benefit of all.”
Many tech companies have expanded their work from home policies to now run through the beginning of 2021 and in a growing number of instances those policies will have no expiration date. Microsoft, in the most high-profile example yet, will allow its employees to work from home permanently. The benefits to the corporation are numerous in terms of lower overhead expenses. And so long as the work is getting done, workers — many of whom are high-income — will relocate.
”This trend has the potential to change local culture and economics with a community,” said Carl Ribaudo, president of SMG Consulting and an Insights Collective member. “Imagine the in-migration of additional residents and the impact of dining, shopping, recreation use, voting and the overall culture of a destination.”
Real estate growth — the good and the bad
The real estate market is growing very quickly, and with that growth comes the associated purchases needed to stock the home with essentials. Data provided by the Colorado Association of REALTORS confirms the growth in Summit County. In September, 111 single-family home listings sold, a 94.7 percent increase from the 57 sold listings in September 2019. The average sales price increased 23.5 percent to $1,706,149.
This real estate growth leads to a problematic lack of affordable housing. In-migration represents increased demand on housing supplies, which pushes prices upward. To those new arrivals, the price represents a decrease from their urban real-estate market — they don’t feel like they are paying a premium, they feel like they are getting a bargain.
“Some mountain town second homeowners are using their units personally, taking them out of the rental pool. For short-term rentals, the contraction of inventory will result in transient visitors having fewer options to choose from. This dynamic is especially challenging given the preference that mountain travelers have expressed for rent-by-owner lodging over hotels during COVID,” Dave Belin, Director of Consulting Services at RRC Associates and Insights Collective member. “Similarly, long-term rentals that would normally house employees are also being taken off the market, further straining the availability and affordability of worker housing.”
Once a local, always a local?
These new full-time residents don’t think of themselves as outsiders. Many of them have been vacationing here for many years – either as second-home owners or as frequent skiers. They already feel as if they are part of the fabric of the community – and they are. The best we can do is to welcome them and cherish their contributions. We weren’t the last to settle here, and neither will they.
“There is already beginning to show some decline in the number of people that are buying resort real estate at absurd prices,” Garrison said. “As people leave their New York and Chicago condo-doorman lifestyles for this perception of a new reality, how’s it really going to play out with a winter of snow shoveling and this perceived lifestyle? Where will they be next year?”