By Jon Ballard Published 11/15/23
The STR market in Hayward, Wisconsin, is not just expanding but also grappling with misconceptions and evolving challenges. The increase in the number of licensed rentals from 275 in 2018 to 563 in 2023 in Sawyer County mirrors the rising interest in the vacation rental market. However, this growth is accompanied by significant shifts in market dynamics and perceptions.
The Hayward market is navigating through a post-Covid era transformation, with distinct shifts in occupancy and pricing across different seasons. Notably, the shoulder seasons have experienced a significant adjustment, with a 30% drop in monthly occupancy rates compared to the peaks seen during the pandemic. This decrease is particularly pronounced during the transitional months outside the peak summer season.
However, the peak season months of June, July, and August continue to perform strongly, maintaining close to 100% occupancy. Despite this robust demand, there has been a notable decrease in pricing in the last year, reflecting the market's response to an increase in available rental options and evolving guest preferences.
This pattern underscores the nuanced nature of the STR market in Hayward, where the impact of the pandemic varies across different times of the year. Properties that maintain high standards of quality and garner positive reviews are still attracting bookings, demonstrating the significance of quality and reputation. These factors remain crucial in driving success, particularly in a market that is balancing the dual forces of changing occupancy rates and competitive pricing.
As we look ahead, the winter season in Hayward's STR market is marked by uncertainty, particularly influenced by specific environmental conditions and differing booking patterns compared to the summer season.
In contrast to the summer months, where bookings are often made well in advance, with an average lead time of 198 days, the winter season exhibits a markedly different pattern. The majority of summer reservations are secured between 198 and 365 days ahead for the upcoming year. This advanced planning reflects the high demand and limited availability during the peak summer period.
Winter bookings, on the other hand, are characteristically last-minute, typically made 30 days in advance or less. This trend is driven by the abundance of available inventory during the colder months and the dependence on weather conditions. Guests often delay their winter vacation plans until there is more certainty about the opening of trails and the freezing of lakes, essential for popular activities like ice fishing, skiing, and snowmobiling.
This short-term booking window presents unique challenges for STR owners in the winter. The reliance on favorable ice and snow conditions makes it difficult to predict occupancy rates and revenue. It requires a more flexible and responsive approach to marketing and property management to accommodate the spontaneous nature of winter bookings.
Incorporating these seasonal booking patterns into our understanding of the STR market's dynamics, especially in the winter, is crucial. It highlights the need for adaptive strategies to navigate the unique challenges of the off-peak season in Hayward, ensuring that properties remain attractive and competitive even when environmental factors are unpredictable.
The STR landscape in Hayward is rebalancing post-Covid with a notable 30% decrease in monthly occupancy from pandemic peaks. Competitive pricing has become more prevalent due to the increased availability of rental options. Despite these changes, high-quality homes with excellent reviews continue to attract more bookings, proving that quality and reputation remain key success factors.
A driving force behind the inventory growth is the misconception that STR investment is an easy and remotely manageable venture. This belief has led to a surge in properties entering the market, but not all are equipped to offer the high-quality experience that guests expect. Remote management, in particular, poses significant challenges in maintaining service quality, often leading to a compromised guest experience. This has inadvertently impacted the reputation of Hayward’s STR market, where an influx of remotely managed properties fails to meet the standards set by more hands-on, locally managed rentals.
This scenario paints a more complex picture of the STR investment landscape in Hayward. While the market offers potential, success is far from guaranteed and requires a more involved approach than many investors anticipate. Quality control, consistent maintenance, and attentive guest service are crucial elements that remote management often struggles to deliver effectively.
For current and prospective STR owners, these insights underline the need for a more realistic and hands-on approach to property management. Understanding the local market nuances, prioritizing guest satisfaction, and maintaining high standards in property quality are essential to navigating the competitive and evolving STR market in Hayward.
Through this enhanced market overview, the blog aims to provide a comprehensive and realistic picture of the STR market in Hayward. It addresses not only the growth and potential of the market but also the challenges and misconceptions that come with it, offering valuable insights for anyone looking to invest or maintain a rental property in the area.
Investing in waterfront STRs in Hayward remains costly, making it challenging to yield significant cash flow, especially with high-interest rates and limited inventory. However, the demand, especially for larger homes, remains robust, with nearly full occupancy during peak seasons.
Hayward's STR market primarily attracts guests seeking waterfront vacation homes, especially larger ones with 4+ bedrooms. These properties are in high demand by families and groups seeking lakefront experiences.
Hayward is known for its lakes, trails, festivals, a tourist-friendly downtown, excellent fishing, and local restaurants. STR owners can leverage these attractions to enhance the appeal of their rentals.
The competitive labor market in Hayward presents challenges in finding adequate cleaning and maintenance staff, despite offering above-average wages.
Another layer of complexity comes from the implementation of room taxes by local townships. These taxes are levied in addition to state and county taxes, cumulatively reaching 5-6%. This added financial burden could potentially erode Hayward's competitive edge in the STR market by increasing the cost for renters.
The high costs of purchasing and maintaining waterfront properties in Hayward, coupled with rising interest rates, make it a challenging but potentially rewarding investment. The high occupancy rates during peak seasons can offset some of these costs.
There's a perception that STRs contribute to rising housing costs in Hayward, and this has sparked community dialogue. There are also unfounded claims that STRs lead to increased police calls and environmental concerns, like overfishing.
The legal and regulatory landscape for short-term rentals (STRs) in Sawyer County is currently under scrutiny, with significant implications for the STR market in Hayward, Wisconsin. A dedicated county board advisory committee is examining and potentially regulating STRs, a move that has sparked debate among stakeholders.
Perspective on STR Advisory Committee Bias
My observations of the advisory committee, formed to study and potentially regulate short-term rentals (STRs) in Sawyer County, have led me to form a particular opinion regarding its bias. This perspective is based on my attendance at several committee meetings and close observation of the proceedings to date.
Board Composition
The committee, as I see it, includes a limited representation from the Short Term Vacation Rental sector, with only one STR manager on board. The majority of the committee is made up of local residents and business owners, many of whom seem to possess a "Not in my backyard" attitude towards STRs. This sentiment, while reflective of certain local concerns, may not fully capture the diverse impacts and benefits of STRs in the broader community context.
Business Interests and Potential Conflicts
Additionally, the presence of resort owners and businesses focused on resort tourism in the committee is noteworthy. It’s my opinion that these members view STRs as competition, raising concerns about potential conflicts of interest. Their involvement might influence the committee's recommendations, potentially leading to regulations that unfairly target or limit STRs to protect established business interests.
Advocating for Balanced Representation
It's important to note that these observations and opinions are based on my personal experiences and side conversations with the committee. They highlight the need for a regulatory approach that is fair, inclusive, and considers the full spectrum of impacts and benefits of STRs in Hayward. The goal should be to foster regulations that support sustainable growth and benefit the entire community, balancing residential concerns with the economic and social contributions of the STR market.
Inconsistencies in Regulation
Hayward's hospitality sector appears to exhibit a notable regulatory imbalance when it comes to short-term rentals (STRs), RV parks, resorts, and private lakefront homes, particularly those used by weekend owners. While STRs are facing potentially strict regulations regarding occupancy, other accommodation types, including RV parks and private lakefront properties, appear to operate under no restrictions.
For example, by my count, the region is home to over 30 private RV parks, with sites capable of hosting large groups in modern RVs that can sleep up to 12 people. The recent approval of a 160-site RV park highlights the growing scale of this sector. These parks collectively bring in a significant number of visitors, potentially surpassing those staying in vacation rentals.
In addition the impact of private lakefront homes, especially those owned by non-residents who use them for weekend getaways but do not rent, is considerable. These homes frequently host large groups of out-of-town guests, often far exceeding the capacity typically allowed for STRs. However, unlike STRs, these private residences face no regulatory scrutiny over the number of guests they accommodate.
This discrepancy in proposed regulation raises questions about the fairness and comprehensiveness of hospitality policies in Hayward. While STRs are closely monitored and restricted, the substantial visitor traffic from RV parks, resorts, hotels and private lakefront homes is not subjected to similar oversight. This lack of balanced regulation can have significant impacts on local infrastructure, resources, and community dynamics.
Addressing this disparity calls for a revision of the current regulatory approach and proposals to include all types of accommodations. A fair and balanced regulatory framework should account for the collective impact of RV parks, resorts, hotels, STRs, and private lakefront homes in the Hayward community. Such an inclusive approach would ensure a sustainable hospitality sector, where all accommodation types are regulated equitably, contributing positively to the area's vibrancy and well-being.
Recommendations and Community Impact
There is hope that the decision-makers at the county board level will consider the committee's recommendations with an open mind, recognizing the significant impact of bringing 563 families into the community every week during the summer. This influx of visitors plays a crucial role in the local economy and community dynamics.
The STR market in Hayward is currently strong, particularly for larger, waterfront properties. However, potential investors should be aware of the challenging regulatory environment and the high costs associated with entering this market.
This post aims to provide a comprehensive overview of the STR market in Hayward, Wisconsin, highlighting both its potential and challenges. Whether you're a current owner or a prospective investor, understanding these dynamics is crucial for making informed decisions in this vibrant market.
As we navigate the evolving landscape of short-term rentals in Hayward, the importance of staying informed and proactive cannot be overstated. Whether you're a current homeowner, potential investor, or someone considering entering the STR market, having the right guidance and insights is crucial for success.
If you're intrigued by the opportunities in Hayward's short-term rental market or seeking advice on how to navigate the current regulatory environment, we're here to help. Our expertise and experience in this sector can provide you with the necessary tools and knowledge to make informed decisions.
We invite you to reach out to us. Let's discuss how you can effectively invest in or manage a short-term rental property in Hayward. Whether it's understanding market trends, dealing with regulatory challenges, or simply exploring the potential of your property, our team is ready to assist you every step of the way.
Don't miss out on the opportunities that Hayward's STR market has to offer. Contact us today to start your journey in this dynamic and rewarding field. Together, we can navigate the complexities and harness the potential of short-term rentals in Hayward, Wisconsin.