Posts Tagged ‘vacation rentals’

The vacation rental statistics have been released for the first half of 2010.  While many people felt that tourism was doing better throughout the US in 2010 versus 2009, the statistics show the two years to be just about even.  Hawaii was one of the few states that shows a large increase in occupancy in 2010 versus 2009.  Hawaii enjoyed an increase of 24% in the number of nights reserved in the first half of 2010 versus 2009.  There are a couple speculated reasons for this.

The first speculation is that many annual Florida vacationers chose to go to Hawaii due to the recent oil spill.  Florida had a decrease in 3% in the number of nights reserved.  A neighboring state, Alabama had a 15% decrease, which was one one of the largest.

The second speculation is that there were several large scale conferences held throughout the islands in the first quarter, which brought in a large number of people.  Due to the economy in 2009, there were several large companies that canceled conferences in Hawaii that typically have conferences every year.  A lot of hotels offered unprecedented deals on wedding packages bringing in groups to the resort areas.

The first quarter of 2010 started off strong and has steadily decreased throughout the US.  This decrease will more than likely carry into the second half of 2010.  From what is currently reserved Hawaii looks as though it will have a strong half of 2010 as opposed to 2009.

The vacation rental industry is a large part of the Hawaii economy.  Not only does it play a large role in tourism, but it also is a large contibutor to state taxes due to the transient accommodations tax.  Just recently with the struggles of the economy the state and counties have had a hard time enforcing policies that have been set to regulate the industry.

The first issue is non conforming use of homes.  This is when the homeowners attempt to rent their properties out as vacation rentals when the land use ordinance does not allow for that property to be a vacation rental.  In these instances the fines can range from $50-$1000/day.  Many homeowners can reach $100,000 in fines quickly.  Typically if the county brings the issue to the homeowners attention and it is dealt with in a timely manner the fine will be drastically reduced up to 75%.  If it is not dealt with in a timely manner then the county can enforce the maximum penalty since this non conforming use falls in the category of the homeowner doing it solely for financial gain.

The second issue is homeowners attempting to rent their properties out on their own and not being fully aware of the taxes for vacation rentals.  For vacation rentals not only do you have the general excise tax, but you also have the transient accommodations tax of over 8%.  This tax was raised by 1% in 2009 and will be raised another percent in 2010.  There are a substantial amount of owners that do not pay this tax.  Another fair amount of owners were unaware of the tax increases and did not charge the guests accordingly and did not pay the state the correct amount.  Failing to pay the correct taxes for a vacation rental is fraud and homeowners can potentially be imprisioned.

Where the battle of legislation comes into play is that the counties would like to see the tax records from the state to see who is paying transient accommodations taxes.  The counties are confident that most people do pay at least a portion of the transient accommodations taxes to avoid legal issues.  If the counties could gain access to this information then they could compare the data to the land use ordinances to see who is renting their home out as a vacation rental in an area where this is not allowed.  The state of Hawaii tax department can not share the information with the counties due to legislation.   The two have battled for over a year now and no agreement has been met.

As the economy continues to struggle the state of Hawaii is bound to see this as a greater issue in the future.  Many second homeowners are doing what they feel they need to do to keep possession of their home and not lose it to foreclosure.  Hopefully in the near future the counties and state can reach an agreement to help policies be enforced.

As the economy continues to struggle people are finding it more necessary to take a vacation and get away from the “stresses of life”.  Many people that once desired all the amenities and services of hotels have moved to staying in vacation rentals in order to save some money.  Just recently there were two great examples of the move towards staying in vacation rentals on the television.

HomeAway, one of the leading vacation rental marketers, launched the first vacation rental advertisement during the Super Bowl.  They brought back Chevy Chase and portrayed the hotel experience as a really bad one.  Not only was it great for HomeAway, but it also increased awareness of vacation rentals as an option for vacations.

The Bachelor is a television show that has been aired for years.  I think they have had close to a dozen seasons.  As the show comes to an end the setting is typically in a beautiful location and they stay in one of the finest hotels there.  This year it was set in St. Lucia in the Bahamas where many people are familiar with the hotel chains such as Sandals Resorts that operate there.  Instead of staying in these notable resorts, they stayed in two and three bedroom luxury vacation rentals with private pools and jacuzzis.  It was not something that they really publicized, but it just once again built peoples awareness of vacation rentals.

Kolea 1F is one of the few villas at Kolea with at least a partial ocean view from each bedroom.  You also get to enjoy the Waikoloa Beach Resort golf package, which includes golf for $50-$75 at the two courses.