Data shows vacation rental owners may have had banner year in Palm Springs

In April, typically a month that sees the highest rates, the average nightly fee for a vacation rental in the city was $707. That’s an all-time high and roughly $200 more per night than two years ago.

Owners of vacation rentals in Palm Springs did better than ever this past spring, but fears of a recession and slowing tourism economy loom large.

Why that’s news: A citizen workgroup tasked with recommending possible changes to the city’s short-term vacation rental ordinance began meeting in mid-July. Its work comes as data supplied to The Post from vacation rental tracking site AirDNA shows the following:

  • A combined total of 4,527 Palm Springs listings were posted on vacation rental sites such as Airbnb and VRBO in May — both short-term (less than 28 days) and long-term (28 days and greater). That was slightly more than the previous high of 4,441 in April of 2018.

    • That number does not equate to the total number of vacation rentals in the city as individual units are often posted on multiple listing sites.

  • In April, the average nightly rate for a Palm Springs vacation rental listed on apps and websites was $707. That’s also an all-time high and roughly $200 more per night than two years ago.

  • In March, the AirDNA data shows the occupancy rate of Palm Springs vacation rentals was 78%. That bests the previous high occupancy rate of 72% in March 2019.

At issue: Elected officials and residents are growing increasingly concerned over the volume and density of vacation rentals in the city. Data provided by the city and a map produced by The Post show an average of 17% of the homes in 11 city neighborhoods are licensed as short-term vacation rentals.

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  • As of the last report in March, there are 2,347 licensed short-term vacation rentals in Palm Springs, roughly 6% of the available housing units.

  • But if you factor in longer-term rentals that don’t require a license, that percentage is higher. 
Data from AirDNA shows occupancy rates of vacation rentals in Palm Springs were highest this past spring.

Why that matters: Residents and some city leaders claim that the increase in vacation rentals in Palm Springs — more than 500 additional short-term licenses have been issued in the past four years — contributes to fewer available housing units for sale or leasing long-term, increasing prices for buyers and renters and forcing them out of the city.

  • Some studies, such as this one in the Harvard Law & Policy Review and this one from the University of Massachusetts, support such claims. 

But wait: While data shows lack of inventory since the start of the pandemic has indeed led to a spike in both home prices and rents in Palm Springs, there has been no study brought forward that shows a direct correlation between that spike and the increase in vacation rentals in the city.

Looking ahead: The city’s latest budget shows healthy year-over-year growth in tax revenue collected from hotels, motels and vacation rentals. But leaders also tried to put in place measures that protect the city from possible declines in that revenue should the country slide into a recession and visitor traffic decrease.


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