The Honolulu City Council has wisely undertaken the process of crafting a solution for the issue of unlicensed vacation rentals and bed & breakfasts. This solution, when finalized, should strike a much-needed balance between the economic benefits that VRs and B&Bs bring and sustaining the character of residential neighborhoods.
VRs are homes, often supervised by a property manager, that are rented to visitors for fewer than 30 days. B&Bs observe the same 30-day rental limit, but in contrast, the owner lives on the property. There are an estimated 2,100 of these rental units on Oahu, with VRs in the overwhelming majority. Many VRs and B&Bs are unlicensed, since the city stopped issuing permits in 1989.
Yet since then, hundreds of new VRs and B&Bs have opened their doors and welcomed visitors who want alternatives to the conventional resort experience. In this way, VRs and B&Bs contribute to the diversification of our all-important visitor industry, keeping Oahu competitive with other destinations that serve broader visitor markets on the mainland and internationally. Additionally, these rental units benefit areas on the island that have visitor attractions but lack a significant hotel presence.
For example, each winter a universe of professional and amateur surfers, their families and friends, and spectators flock to the North Shore for its towering, world-famous waves. Just one event -- the Triple Crown of Surfing --brings an estimated $7 million into the North Shore.
Many of the surfers and surf fans who come for the Triple Crown and other events during the three-month surfing season stay at VRs and B&Bs. For these large-scale events, existing hotels in the area do not have sufficient rooms to accommodate the sheer number of visitors attending, nor could the highways to and from the North Shore accommodate the resultant traffic were these visitors to stay in Waikiki.
These North Shore visitors also bring their spending power with them. They eat out and shop on the North Shore, supporting any number of small businesses, which in turn provide jobs in the area. It is difficult to quantify this effect as no studies have been done of VRs and B&Bs on Oahu. Yet a telling comparison is available with the experience of Kauai, where there are about 2,600 vacation rentals.
A study by the Kauaian Institute estimated that VRs on Kauai host 300,000 visitors each year, collecting $100 million for the Garden Isle's economy and supporting 1,600 jobs. The study also found that 38 percent of repeat visitors -- a cornerstone of our visitor market -- stay at vacation rentals and are twice as likely to visit a local market and craft fair.
Given the results of the Kauai study, it follows that Oahu, the hub of the state's visitor industry, also must see significant benefits from the VR and B&B sector in terms of revenue and jobs.
Economic returns and private property rights, however, ultimately must be balanced with the concerns of residents who have VRs and B&Bs in their neighborhoods. They deserve both responsive and responsibly acting VR and B&B owners. They deserve to know that their quality of life will not be unconscionably impaired.
Other counties, other states, even other countries have found a path that properly regulates VRs and B&Bs while satisfying the communities that host these units. The City Council has begun finding a path on this issue for our island. I am confident that by working together, the journey will lead to a mutually satisfying solution.
Chuck Gee is dean emeritus of the University of Hawaii School of Travel Industry Management.