Smokies STR - 2008-2010?

[Alan Ford]

I know most people on this forum didn’t have STRs in the Smokies back during the last real recession, but are there any folks on here who do have some insight? I think the Smokies is pretty recession proof but would like to see if I can confirm this with first hand knowledge. I also reached out to a few property managers who have been in the area for decades. So far all my cabins are booking well.

[Tim Schroeder]

Here is the spreadsheet I put together last year when I was deciding whether to keep buying additional cabins. It makes a really good case for the area's resilience. The Lodging revenue is from the Pigeon Forge city website and encompasses ALL taxable lodging revenue, as such I think it's a pretty good indicator of overall rental income. A 14% drop in area income during the greatest recession this country has ever seen is getting off pretty damn lightly IMHO. Now, if your profit margin was 14% or less to begin with, then you would disagree with me, and the high number of foreclosures shows that many people were in that position. But I would argue you shouldn't be in vacation rentals with that little margin in the first place. Restaurant and National Park numbers with very modest drops shows that people still went to the Smokies, even during the recession. By comparison, a quick Google search told me that Hawaii lost 30% of visitor visits during the recession. So for me the takeaway is as long as your margin is comfortably high, the Smoky's can ride out any storm. And as a side note, if it's not higher than LTR, why are you doing it?

BP wouldn't let me post pics so here are links to the screenshots, and the underlying spreadsheet.

Link to Data      Link to Chart      Link to Spreadsheet