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Horizontal Hotel???

Updated: Jun 15, 2023

Ivins City recently concluded six nights of Town Hall Meetings with residents to discuss the “Future of Ivins.” Always trying to be first and foremost curious, I attended several of the meetings. There was good dialogue and feedback from the residents as to what is working and what we want to see more or less of going forward.

The mayor used a term to describe some new developments: “Horizontal Hotel” (HH). This isn’t the first time we have heard this term. We began hearing it this past summer when RIZE, LLC was asking for a zone change on the SITLA 120 land (Rainbow Canyon) from RA-5 to Resort Commercial so they could build Short Term Rentals. The term is continually being used by the Mayor and City Council Members, so I wanted to take a deeper dive and ask “What the heck is a Horizontal Hotel?”

Upon first hearing it, I of course went to my dictionary and internet. What I discovered is that this term doesn’t exist. There is no such thing. Anywhere.

This term was coined by the developer or Ivins Officials or both, and the reality is, they are referring to Short Term Rentals (STRs). Having diligently researched STRs it is understandable wanting to make it seem more palatable, (more on that later) but where I grew up, we call that “putting lipstick on a pig.”

A hotel is defined in the oxford dictionary as: “an establishment providing accommodations, meals and other services for travelers and tourists.” A motel is defined as “a roadside hotel designed primarily for motorists, typically having the rooms arranged in a low building with parking directly outside rather than a central lobby.” We have many of both in the surrounding area.

Where does a Horizontal Hotel fit? It doesn’t. It is word salad for Short-Term Rental and nothing else.

Here is some information on STRs. Available on platforms like Airbnb and VRBO, have drawn both positive and negative attention over the past few years. Initially, STRs were lauded as income-generators that allowed local residents to rent out their personal spaces and properties to visitors. They are desired by cities, developers, and governments as revenue producing to primarily support a tax base. Sounds positive. Taking a closer look, the lipstick starts to fade.

The term Horizontal Hotel was used claiming to say there will be one reservation system or a “central reservation system.” Let’s take a closer look to see what those entail. A central reservation system (CRS) is a platform (computer program) typically used in the hotel industry to centralize reservations. Think in terms of one website for all Holiday Inns. They use these because reservations are no longer just coming from one direct place or channel. The City Council and Mayor claim that because of this aspect it won’t be the “Airbnb nightmares you hear of.”

They go further to claim that it will be run by an onsite property management company then they have in small print “(or one within 30 minutes.)” Again, they say, “it will not be the wild stories you hear about Airbnb” and other vacation rental sites. This so-called property management company will deal with complaints and problems. Yet, the realities of the situation are far more complicated.

The property management system needs to promote or advertise these rentals. Where? Granicus, (a digital platform for civic engagement and information) tells us that “STR Property listings are spread across 100’s of different websites.” If an individual googles STR in the St George area – over twenty sites pop up – just on the first page. The alleged Property Management Company will have to post on these sites as well. How does their having to advertise on Airbnb, etc. make them any different from other Short-Term Rentals? They go on to say that “manual Tracking and Enforcement can be a nightmare.” Additionally, all these entities use a different tax reporting system, so tracking whether the city is actually getting the tax base that they are looking for is doubtful.

Next, the developer advises that some or all the properties can “opt out” of being Short-Term Rentals. Seriously? So, if they opt out there is no tax benefit to the city, and you may have a rental next door to your property and others may not. Does that affect property values? The list of potential issues goes on: parking, traffic, and garbage to name a few. The other option is that no one can “opt out” they all must be in the rental pool. But if I live there, do I want to rent it out? Do I want to have a lockout portion that can be rented out? If so, how big is this place and can I even afford it? The market for these Short-Term Rentals that do not require owner occupancy are investors – groups that care nothing for our neighborhoods and resources.

How will the central reservations system/single property management be determined? Will this be the developer?

  • Will the Developer hire the Property Management company?

  • Who will manage them? I was HOA President for two years and went through two companies.

  • How will the city manage the complaints when they come to you?

  • Will we need to add a full-time person for the city to address complaints, taxes, control violations, etc.

  • Will they determine the rental rates?

  • Will we even be competitive with other areas more centrally located?

There are multiple articles that tell stories of cities trying the same concept. The owners (either individuals or investors) decide “Why am I giving more money to the city?” “Why am I paying a property management company?” This is when owners/investors go out on their own, rent the property, pocket the fees, and claim “it is just a friend staying for a few days, or an aunt.” There are multiple articles documenting this happening.

The data also shows that increased Short-Term Rentals are disruptive to the traditional lodging industry due to unfair economic advantages. They offer unfair economic advantages in two distinct ways:

  1. STRs don’t have to pay for staff and are not regulated like hotels, which increases costs.

  2. This allows STRs to offer lower rates and is a threat to the hotel industry.

Additionally, hotels and motels are regulated for health and safety, and Short-Term Rentals are not regulated in the same manner and therefore potentially expose guests to unhealthy or unsanitary conditions.

A study from scholars at Boston University and the University of Southern California showed that even lower-end hotels in Texas are suffering from the increase in STR listings.

So how does that fair with our local hotels and resorts, like Red Mountain Resort and the soon-to-be Black Desert Resort and Sentierre that have or will need to work so hard to keep staff and serve the tourism industry after all that they have invested?

The question then becomes, are there any examples of this size currently and successfully working under this business model? The answer is a resounding no.

There is a place for short-term rentals in our society, but we need to make sure they fit the General Plan and make sense for the location and let’s call them for what they are keeping the lipstick where it belongs.

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