Palm Springs Vacation Rentals & Small Hotels and Inns:

Should Vacation Rentals be Governed by the Same Rules and Regulations as Hotels?

Recently, in another forum frequented by Palm Springs vacation rental operators, a poster identified as “Jim” wrote:

“I own and operate a small hotel in palm springs. I have to abide by the rules and regulations of the federal, state, county and city governments. Vacation rentals and hotels offer lodging to the public. Why should VR not abide by the same rule and regulations?”

I’ve given this topic a lot of thought and so figured it would be worth answering at length. So here’s my response:

Your question is interesting… Thanks for asking! Actually, Jim, I can think of quite a few reasons that private home accommodations shouldn’t be governed by exactly the same regulations as small hotels, not the least of which is that the new Palm Springs Vacation Rental Ordinance (№1918) defines vacation renting not as a business, but as an ancillary and secondary use of residential property.

Even so, vacation rentals (and to a slightly lesser extent, homeshares) must abide by a quite large raft of rules and regulations set down in Ordinance 1918, some of which are fairly complex.

One might ask, conversely, “I operate a vacation rental in Palm Springs. I have to abide by the rules and regulations of the federal, state, county and city governments which relate to vacation renting, particularly those of the City of Palm Springs. Small hotels also provide short-term lodging… Why should hotels not abide by the same rules and regulations?”

For example, I don’t see why my one-guest-group-lodging should be limited to being rented short term only 32 times per year (plus an additional 4 rentals during Q3) when hotels are not. Shouldn’t each hotel room be limited to 32 short-term rentals per year?

Vacation rentals must execute a signed, written contract (vacation rental agreement) with each guest in advance of the guest’s stay and share an abstract of that information with the City prior to the guest’s stay. Should hotels not also have to do this for each and every guest?

All adult guests of vacation rentals must sign a Statement of Rules and Regulations that confirms their understanding of the rules that govern their conduct during their stay. Shouldn’t all adult hotel guests have to do the same?

Further, the guest signing the vacation rental agreement must be 25 years or older. Hotels are not subject to such a restriction. Should they not be subject to the same restriction? (IT’S UNFAIR COMPETITION, I TELL YOU!!!!)

Guests of vacation rentals, unlike all other residents of Palm Springs (including those residing in hotels) are prohibited from enjoying amplified music of any volume outdoors. Should hotels not also abide by the same restriction? No more dining al fresco or lounging by the pool with smooth jams, I say. It’s unfair.

Come to think of it, why shouldn’t all residents of Palm Springs be subject to these same rules? Hmmm…

Vacation rentals also must remit monthly Transient Occupancy Tax. Shouldn’t hotels have to do the same… errr… of wait, we both already do that. Strike that last point!

I could go on and on, but you get my point. Hotels and vacation rentals are both regulated to varying degrees and the regulations that might seem reasonable and sufficient for each are rather — of course — different.

Now, it’s true that, as guests’ travel preferences have changed, vacation rentals and homeshares have increasingly been seen by some sectors of the lodging industry as competition. (And I suppose some in the lodging industry feel that competition is “unfair.”)

But that perception is not universal. In Palm Springs, it seems that the larger chains perceive vacation rentals as an important part of the travel and tourism ecosystem. In part this is because large organizations such as Hyatt and Wyndham have vacation rental “plays” that are strategically important to them. In part it’s because many hotels in Palm Springs understand that vacation rental inventory is actually essential to hosting the sizes of conventions that the CVB wants to continue recruiting to our city.

I’ve often wondered why an organization such as SHOPS (Small Hotels of Palm Springs) has a seat at the table in ongoing vacation rental stakeholder meetings at all. But, since they do, I think it would be wise for that seat to be a supportive — not an adversarial — one.

In fact, I know that some operators of small hotels and inns in Palm Springs also own or operate vacation rentals (as do many people who work in other aspects of the travel/tourism/hospitality industries in the Coachella Valley). It would seem that a platform based on anti-vacation rental sentiment isn’t entirely in the best interest of all small innkeepers and their stakeholders.

If vacation rentals seem like unfair competition to you, perhaps you could find a way to turn them into partners.

For example, I (and many other vacation rental operators) regularly refer business to local hotels.

As you might imagine, since I have what is one might characterize as a “1 room hotel”, I am unable to accommodate multiple guest groups per night. And I can’t accommodate guests who want to throw an event or who need adjacent event space. Additionally, I am unable to serve groups of more than 6 guests (and I prefer for my guest groups to be 4 or fewer). Further, I am unable to host groups that are under the age of 25. And, if my vacation rental is popular enough, at some point I will reach my maximum number of rentals for the year…

In such cases, which are quite common, I refer guests to other VR operators or to local hotels as appropriate. I have a small list of preferred hotels (both small and large) who offer guests that I cannot serve a preferential rate, when available.

Instead of being an adversary here, you could have put on your marketing hat for a moment and said, “Pardon me for butting in, but I couldn’t help but notice that y’all might be an excellent source of referral business for my charming local hotel… We have so much in common and my offerings might appeal to your clientele…”

I will also note that such “partnerships” are entirely one-way. While I refer a significant number of room nights to my small and large hotel partners annually, they rarely refer anybody to me. It’s just a nice service I provide as a way of generating goodwill with guests that I cannot serve (who may eventually return to me at a time when I can serve them).

The previous valuable hospitality marketing advice has been provided entirely free of charge.

Edit and aside: It occurs to me in re-reading this that it’s entirely possible that the reason that the possibilities and benefits of this sort of relationship might not have occurred to Jim (and folks like him) is because many who oppose vacation rentals (for whatever reason) have very little knowledge about how they operate. One oddity I’ve noticed in Palm Springs is that many such individuals seem to equate vacation rentals with some of the well-known local property management firms who provide management services for vacation rental owners.
It is possible that some of those firms would be unlikely to desire partnerships with local hotels as these firms control an inventory of multiple (in some cases dozens or hundreds of) vacation rentals. Of course, such firms manage their inventory in much the same way as a hotel would. Is one desired property not available? Well, there’s a comparable one they can offer. Is the guest not suitable or servicable as a vacation rental guest (due to age or whatnot)? Well, don’t waste time on them.
However, only about half of the more than 2000 registered vacation rentals in Palm Springs are managed by property management firms. The rest are independently owner-operated. This means that there are, in fact, about 1,100 potential partners with whom savvy hotel operators could ally themselves. These are the folks, like me, who are potentially a very fertile source of referral room nights. And, because such owners have become increasingly organized, it is now easier than ever to reach them. (Enterprising and forward-looking small hotel operators in Palm Springs can reach out to me via the comments for assistance in connecting with similar independent vacation rental operators.)

On the subject of safety regulations as they relate to vacation rentals (which was the specific topic being discussed when Jim chimed in), I think that the majority of Palm Springs vacation rental operators agree that some level of safety standards should be upheld. We are currently at the stage where the Vacation Rental Compliance Department is making recommendations for and designing a safety requirements checklist. Some of the proposed measures are good, others may seem excessive (or in need of modification) and there are a few that might be deemed absurd.

Just as I’m sure you do in your negotiations with regulatory officials, vacation rental operators are simply voicing their support, recommended modifications, or opposition to various provisions of the proposed safety standards. As in the above examples, not everything that would be sensible as a safety standard for hotels would make sense as a safety standard for vacation rentals (and vice-versa)!

I know that some in the small hotel business are quick to harp on related accessibility issues, such as “ADA compliance.” Of course, were such criteria even applicable (it’s not clear that they are), if one were to say that we should hold vacation rentals to the same accessibility standards as hotels, that would not mean that every single vacation rental would have to attain a certain level of accessibility.

On the contrary, just as hotels are not required to have 100% of accommodation rooms as ADA accessible, one would have to consider vacation rentals as a group. While I don’t have exact statistics on this at the time, I actually suspect that, as a class, vacation rentals in Palm Springs actually have a higher percentage of accessible rooms than hotels are required to have.

So, again, I don’t think this is a can of worms that small hotels really want to open in that “being treated the same” might actually require many such hotel operations achieve a higher level of accessibility than they currently offer.

I’d like to make one last meta-commentary about what I observe in the attitudes of some small hotel operators in Palm Springs with respect to vacation rentals: I’ve rarely seen such a shockingly selfish, short-sighted, and self-serving policy as the SHOPS opposition to vacation rentals.

Make no mistake: Anti-vacation rental sentiment in general is anti-tourism sentiment. It is extremely unwise for small hotel and inn operators to take an aggressive, anti-competitive stance against vacation rentals. When you do so, you are selfishly protecting your business from a perceived competitive threat (which, as I’ve described above, is actually an opportunity)… However, you do so at the expense of all who benefit from travel and tourism to Palm Springs. Stoking anti-tourism sentiment is not in your long-term interest and I urge you to rethink your motivations and approach to short-term rental policy shaping.

Thanks again for asking your thought-provoking question, Jim!


Originally published at www.evillapalmsprings.com.