Hotel Project: Joshua Tree Area

Goals

To determine concrete demographic data since COVID-19 impact (deomgrapiccs, short-term rental stays, rise in road trips in the area, mid-week vacation increases) regarding investment opportunity for a new hotel project in the Joshua Tree area.

Early Findings

  • Joshua Tree, California, has a population of 6,980 (2020)- currently declining at a rate of 0.00% annually and its population has decreased by -5.85% since the most recent census, a recorded population of 7,414. Joshua Tree reached it's highest population of 7,811 in 2013.
  • As of May, San Bernardino County (Joshua Tree area) is one of few places in California where travelers can stay in a short-term rental property without risking the violation of any local ordinance. Officials made the call to allow short-term rentals and campground stays a day before Joshua Tree National Park reopened, anticipating an influx of visitors that would need a place to stay as they ventured to the park.
  • Comparison data for Airbnb: At year-end 2019, Airbnb data for Joshua Tree: Average Airbnb Rental Income: $3,061 , Average Return on Investment: 7.43% , Average Airbnb Occupancy Rate: 59%. Return on investment, as cash on cash return and cap rate, is also impressive. At 7.43%, Joshua Tree's average ROI is significantly greater than California's average Airbnb ROI of 2.37%.
  • A March 23 report by Airdna, a consulting company analyzing Airbnb booking rates and pricing, found that properties considered rural have seen significant year-over-year gains, while urban units have seen a decline- 73% of March Airbnb revenue was made outside of urban centers, destination-based hosts have lowered rates until summer to chase the 'escape-the-city' market, and for the first time in 5 years, booked rates are higher than advertised rates for summer months, suggesting high demand for these properties.
  • The park is located within both San Bernardino and Riverside counties approximately 100 miles from the Los Angeles metropolitan area—more than 23 million people live within a three-hour drive of the park. San Bernardino County is expected to reach 2.66 million residents by 2035, growing by approximately 27% between now and then. Riverside County is expected to reach 3.3 million residents by 2035, growing 33%.
  • Data for road trip trend reports is not readily available, but can be found through a pay walled source; however, In an LA Times survey taken April 17-22, 47% of respondents said they would be more likely to travel by car, an increase from 35% in data collected April 4-11.
  • Auto Club predicts more than 100 million road trips this summer among residents in the Pacific region, from California to Hawaii; travel will be down 17% — the largest decline in 20 years.
  • Market vacation trends (google analytics- alltherooms) as of August 2020 for Joshua Tree, CA: occupancy rate 79% up 3.95%, available supply 591 up 4.05%, revenues $3,738 down 28.4% (room rates $226 up 2.73%). Data for market revenue, nights booked, revenue per night, and booking time are located behind a paywall.

Proposed next steps:

You need to be the project owner to select a next step.