Growing number of ‘homestays’ giving R.I. tourism a big boost

BEACH HOMES such as this one in Narragansett are hot commodities on the rental market this summer, according to local tourism officials. / PBN FILE PHOTO
BEACH HOMES such as this one in Narragansett are hot commodities on the rental market this summer, according to local tourism officials. / PBN FILE PHOTO

Tourism officials in Rhode Island’s shoreline communities are preparing for a bustling summer season based, in part, on the large number of home rentals booked through online platforms such as Airbnb Inc. and Vrbo.

Louise Bishop, CEO and president of the South County Tourism Council, said the occupancy rate of rentable vacation homes in beach communities could exceed the 95% rate seen last summer at the height of the COVID-19 pandemic. In years prior, the rate had been about 85%, Bishop said.

The existence of platforms such as Airbnb and Vrbo has given South County increased visibility to potential visitors who might not otherwise have considered traveling to Rhode Island, Bishop said. In turn, it’s been a boon to the economy, boosting rental rates and providing more customers for tourism-dependent businesses in the area.

And in the Newport area, where the tourism industry is traditionally more reliant on hotels to lodge visitors, short-term “homestays” are becoming a growing factor.

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Evan Smith, CEO and president of Discover Newport, said hotel summer bookings are expected to remain high on Aquidneck Island, but he anticipates that house rentals through online platforms will be “very hot.”

“For decades American hotel brands worked and competed to build patrons and loyalty,” Smith said. “I think we have been [seeing], and continue to see, a new brand loyalty to the short-term [house] rentals as a lodging preference.”

Tourism officials say it doesn’t matter where tourists stay when they visit Rhode Island, as long as they continue to come.

“It’s great for everyone in tourism,” Bishop said.

Airbnb recently released a report on popular U.S. travel destinations that supports Bishop’s assessment that the summer tourism season will be a good one. The report, based on bookings recorded in February and March, ranked Rhode Island as a top trending destination for travelers among locations with the least number of hotel rooms.

On its own, South County was among the most popular destinations on Airbnb among locations with access to natural features – beaches, in the case of South County. It ranked No. 11 behind Park County, Mont., according to Airbnb. Acadia National Park in Maine topped the list.

Homestays have been a growing trend in Rhode Island in recent years.

Liz DeBold Fusco, a spokesperson for Airbnb, said that during 2019, between Memorial Day and Labor Day, more than 111,000 guests chose to stay at rented homes in Rhode Island. That translated to about $24.1 million in income for Airbnb hosts in the state.

The state and local communities collect a total of 13% in taxes on those bookings from hosting platforms – 7% sales tax, 5% statewide hotel tax and 1% local hotel tax.

According to the most recent data available, the collection of the 5% hotel tax in Rhode Island in February totaled $521,797 – $469,049 from traditional hotels and $52,748 from hosting platforms and room resellers.

For 2019, Providence was the top destination for Airbnb guests, followed by Middletown, Newport, North Kingstown and Westerly. Airbnb did not have specific data for 2020 and 2021.

Rhode Island – and particularly South County – seems to be benefiting from travel preferences created by the pandemic: People eager to take trips closer to home that offer outdoor activities, such as beaches.

Since the pandemic began, Airbnb said, the percentage of bookings made on the online platform within 200 miles – a round trip that travelers can generally complete on one tank of gas – has grown from one-third of all bookings to over half.

Bishop uses a program called AirDNA, a vacation rental data and insights platform that provides a variety of data for host rental properties. It offers her a view of a rental property, including its location, average daily rate, number of rooms and days occupied.

Bishop said that a year ago, in June of 2020, she began receiving phone calls from travelers, some while in transit, seeking lodging accommodations in South County.

“My phone rang off the hook,” she said. “COVID brought more people from outside our region, further away than we would normally see – leading to a demand for homestay rentals.”

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