Short-term rentals prove resilient in Solana Beach during quarantine

Stubbs Real Estate is one of many vacation rental companies that are seeing an increase in bookings.
Stubbs Real Estate, which has offices in Solana Beach, is one of many vacation rental companies that are seeing an increase in bookings as pandemic restrictions ease.
(Luke Harold)

When businesses, beaches and other activities closed last spring due to COVID-19 public health orders, short-term rental bookings dried up throughout San Diego County’s most popular destinations.

“I actually thought this was the end of the world,” said Kimberly Jackson, founder of a vacation rental company that operates in Solana Beach and throughout coastal North County. “I was worried that my business would never come back,”

But once beaches reopened in time for summer, short-term rentals were suddenly in demand again, providing a boost to hosts and an unexpectedly high level of revenue for the city of Solana Beach. Jackson said there was an influx of inland San Diegans taking staycations, since remote work and distance learning gave them flexibility to leave their homes. She was also able to get a loan from the Paycheck Protection Program for a little more than $50,000 last spring to bring her staff back.

On June 15, the state relaxed most of the public health restrictions that were in place over the last year, and began welcoming tourists again.

“Our summer is stronger than ever,” Jackson said, adding that she’s starting to see an increase in out-of-state visitors. “We have higher occupancy rates than ever before with the pent up demand.”

Among the many budgetary adjustments made in the immediate aftermath of the pandemic, the city of Solana Beach slashed its projected transient occupancy tax revenue. Originally budgeted at $420,000, the City Council reduced it to $270,000 in anticipation of a steep decline in tourism. That would have been the lowest total since 2014-15.

But in a budget update during a March City Council meeting, city staff and council members revised the city’s projected revenue from short-term rental taxes to approximately $490,000. Projected revenue from that tax is projected to be $475,000 in the 2021-22 fiscal year and $485,000 in 2022-23, according to the two-year budget that the council recently approved.

“Short-term vacation rentals have really exceeded what the projections have been,” Solana Beach City Treasurer Ryan Smith said to City Council members at that meeting. “It seems that vacationers are opting for this type of accommodation as opposed to a more traditional hotel.”

Debbie Tremble, general manager of Stubbs Real Estate, which operates vacation rentals in Solana Beach and throughout coastal North County, also said beach closures made rentals difficult at the beginning of the pandemic.

But, she added, “as things started opening up, (bookings) started picking up quickly.”

She said many travelers preferred short-term rentals because they offered more seclusion than hotels, which have lobbies and other common areas that could increase exposure to COVID-19. The company also added more stringent cleaning protocols over the last year.

Stubbs received a little more than $80,000 in the first round of PPP loans last spring. But the company, along with the rest of the industry, is experiencing a post-pandemic rebound this summer.

Public health officials are monitoring spread of the delta variant of the coronavirus, but about 2 million San Diego County residents have been fully vaccinated as of the end of June, and around 3 million have received at least one shot. Those factors, along with a slowdown in rates of new COVID-19 cases and the elimination of the color-coded tier system that determined which restrictions were in place, have resulted in more travel.

“Short-term rentals this year have just gone crazy,” Tremble said.