The headline on an article that appeared in the April 9th edition of Powder magazine reads “Are Ski Areas Responsible for the Spread of COVID-19?” This article largely focused on Ischgl, a resort in the Austrian Alps which is now facing litigation by over 2,500 skiers and riders for exposing them to the disease in early/mid-March when the threat of the virus was known and other areas in the Alps had already shut down to protect their guests and residents. It also mentions Blaine, County, Idaho, home to Sun Valley, which on April 12th had 2,055 cases per 100,000 which is among the highest in the nation. By comparison on the same day, New York County had 781 cases per 100,000. Other ski areas are right up there with for example 783 per 100,000 in Eagle County Colorado, home to Vail and a number of publications, including Bloomberg, have run recent articles explaining how the traditional 9th week of the year ski holiday favored by people from Mexico lead to the spread of the virus in that country, including the Chairman of the Mexican Stock Exchange and other of Mexico’s business and political leaders.
Summit County, Utah, the home of Park City stood at 741 cases over 100,000 so we are faring better than Sun Valley, but we also have more residents. No matter the numbers, we are all feeling the pain of isolation, job losses and feel deeply for those who contracted the virus. And we are all giving THANK YOU’s to our law enforcement, first responders, physicians, nurses, markets, restaurants and small business and their employees who are keeping us safe, healthy and fed.
This is not intended to be “valuation” focused and I will not make forecasts as to how long this will last or how soon we’ll be back to business. Nonetheless, I am asked frequently “how will this impact Park City real estate?” Frankly I have no idea at this point in the cycle as even the scientific and medical communities have no cohesive guidance in that regard. I will however keep you up to speed on the data and at the end of the day let you be the judge as to how this might be impactful to you as a vacation home owner in Park City. This report takes a look from the 10,000-foot level so to speak so you have might have a better feel for the overall dynamics in our town. Later editions will drill down into the numbers, comparing data from this year to last so you can see the actual impact, if any.
Approximately 73% of the housing inventory in incorporated Park City is not owned by primary residents. The housing inventory consists of 8,518 homes and condominiums, not including the new homes at Quinn’s Junction (around the hospital). Of the total, 46% are in a nightly rental program of some sort. A number of the City’s neighborhoods discourage or outright restrict nightly rentals, so when you drill down into the areas where they are more or less encouraged (Old Town, Park City Mountain Resort Center and Deer Valley), the percentage of nightly in those areas combined jumps to 86%.
Spring and summer are traditionally the slow season occupancy wise for those properties engaging in nightly rentals so there should be relatively little impact over the next 8 months or so. What happens in the longer term for those owners who are somewhat dependent on revenues generated by nightly rental, the outcome will depend on how quickly and securely COVID-19 is contained, and how safe the airlines, resort operators, hoteliers, management companies, restaurants and businesses can make the Park City experience.