This area has a lot of short term rentals because we draw a lot of tourist looking to see the mountains, hiking, or biking.

I totally understand and I'm not trying to convince them that they should, especially since certain areas are getting too many tourists and the infrastructure doesn't always follow. 

These areas have traffic year round and are close to tourist attractions.

Too risky IMHO, especially if it is a tourist driven condo.

For heavy tourists markets where there are several STR management companies who have websites, most direct booking individual websites will not even be able to compete with that.But if you work on your social media presence, social media ads, and routing return guest through your direct booking website, you are building a base of clientele which makes you less dependent on the whims and algorithm changes that the big OTAs have.  

The property is zoned as mixed-use tourist commercial, which allows me to convert the property into a motel/hotel.

I would say that as long as you are close to major hospitals, universities, company headquarters, airports, tourist attractions, or beaches, you'll generally be pretty safe in getting your desired return.

Pick two high end overseas tourist destinations. 

Inner-loop neighborhoods: Popular with tourists and young professionals, but competition can be fierce.

With the exception of the first 6 weeks of Covid, it turned that place into a non down season full on tourist packed place for 24 months.