Insight
Southwestern Utah offers solid outdoor recreation opportunities, with some of the most spectacular scenery in the world. Washington and Kane counties, located in southwestern Utah, have experienced robust economic growth since the onset of the COVID-19 pandemic in 2020 given the presence of two national parks—Zion National Park and Bryce Canyon National Park— in addition to several well-known state parks, such as Sand Hollow State Park and Coral Pink Sand Dunes State Park. The popularity of outdoor recreation areas has skyrocketed during the pandemic, and the region has benefited from this trend.
In addition to leisure travel, meeting and group demand is on the rise. The Dixie Convention Center, located in Saint George, Washington County, is the largest convention space in southern Utah. The county is also popular for outdoor events, including the Ironman North American Championship, which takes place every year in May. Additionally, two Ironman World Championship events take place every year: one in Kona, Hawaii, and the other in a different location around the world. In 2021, Saint George hosted the first Ironman World Championship in September, held its usual North American Ironman Championship in May 2022, and hosted the second Ironman World Championship in October 2022, which was originally scheduled to be held in New Zealand. These events made Saint George the first destination market to host three Ironman Championships in a 13 month period.
Hosting Landscape
Traditional accommodation properties
Washington County is home to over 80 hotels (totaling over 6,500 rooms), not including short-term rentals, and several unique accommodations such as glamping. The majority of hotels in the county are located in the towns of Saint George and Springdale. Springdale is the only city in the county with luxury hotels, and Saint George has the most upscale to high-end hotels. The following chart illustrates the chain-wide breakdown for the Saint George and Springdale hotels.
Hotel Chain Scale Breakdown – Washington County
Kane County has nearly 50 lodging properties, totaling more than 1,300 rooms, not including short-term rentals and glamping properties. The majority of housing in this county is located in the city of Kanab, and a breakdown of asset classes available in Kanab is shown in the following table.
Hotel Chain Ladder Breakdown – Kanab (Kane County)
Unique accommodation assets (short term rentals and glamping)
Short-term rentals and glamping properties are prevalent in both counties. While glamping properties exist or are in the works for both counties, ranging from ultra-luxury all-inclusive glamping resorts to small offerings of ten units or less, glamping is most prevalent near the western entrance to the national park. of Zion in places. such as Virgin, east of the park along Highway 89 on the way to Bryce Canyon National Park, and in the greater Kanab area given the beauty of the local landscape. However, the number of Airbnb and Vrbo rentals, in particular, increased significantly in the second half of 2020 following the popularity of outdoor-focused markets in Washington and Kane counties. This trend continued through the 2022 period through September for both counties. The following chart illustrates the number of Airbnb and Vrbo listing nights over the past few years.
Short term rental units available
Trends in transitional room taxes after COVID-19
Since the start of the pandemic, revenue from the Transitional Chamber Tax (TRT) has increased significantly; in Washington County, TRT revenue grew more than 70% in 2021 over 2019 levels. Kane County saw 60% growth over 2019 levels. The following chart illustrates the trends TRT updates for both counties.
Transitional Chamber Tax (TRT) revenue (millions)
Increased visits to Zion National Park, along with significant increases in room rates, have contributed to TRT trends. Notably, the park’s record attendance levels began in September 2020 and continued monthly through the end of 2020. Subsequently, record attendance levels were reached in January, May and June. Additionally, total attendance for 2021 was the highest annual figure on record, reaching over five million for the first time in the park’s history. In 2022, record visitation levels continued to be achieved in certain months, such as February and March. The following chart illustrates visitor trends for Zion National Park.
Recreation Zion National Park Visitors
Market participants have also reported a surge in the number of remote workers choosing to live and work in the region in 2021. These remote workers are said to have sometimes stayed in hotels, but more often in isolated units, such as short term rentals.
Notable developments
Washington County
Washington County has become a focal point for new developments, with several large-scale developments in the works. Utah Tech University enrolled a record number of students in 2022, and as a result, the university has entered the planning phase for its 183-acre Innovation District campus. The project plans to include additional student accommodation and teaching buildings in preparation for further enrollment growth. Additionally, a new hospital known as Zion Regional Medical Center is set to be developed in the Desert Color region. The new medical center will include a helipad, 24 patient beds, four operating rooms, twelve emergency bays and several support services, including laboratory and imaging services, in its first phase, which is expected to be complete in 2024.
Another notable development is a sports complex as part of a massive mixed-use development named Zion’s Landing Resort which is proposed for the city of Leeds. The development, which is in the early planning stages, is expected to include a resort community with luxury homes, an arts center, campgrounds, RV parks, sports fields and several other recreational areas. outdoor recreation. This development should enable the region to support much larger sporting events. The project is also expected to eventually include a number of hotels; however, this part of the project also remains in the early stages of development.
Moreover, at Black Desert Complex, plans are underway to develop additional hotel units, a 19-hole golf course, a 36-hole putting course and other offerings including commercial and residential developments. The first nine golf holes opened on November 1, 2022 and the remaining nine holes will be completed in the spring of 2023.
Kane County
The East Zion Master-Planned Development is a major ongoing project for the eastern rural entrance to Zion National Park. The project will include retail stores, housing, hotels, a new Zion National Park Visitor Center and a new roundabout and pedestrian underpass at the intersection of North Fork Road and the SR-9. Construction of the new roundabout and pedestrian underpass is scheduled to begin in 2023. Upon completion of the development, hundreds of new jobs will be created and the pressure on the park’s western entrance will be greatly relieved.
New offer
Washington County
Given the increased economic activity in Washington County in recent years, coupled with notable interest in development and investment in the area, new hotels are being proposed for development throughout the county.
In addition to the hotels planned as part of the Zion’s Landing Resort project, Saint George has a number of hotels in the works. These include a Delta Hotels by Marriotta Home2 Suites by Hiltona Residence Inn by Marriotta Autograph Collection Hotel by Marriott in the Desert Color area and the Black Stone Hotel. The Black Stone Hotel would be affiliated with Marriott and feature a condominium ownership structure.
In Springdale, new supply is very limited due to zoning restrictions and a lack of land available for development except for redevelopment opportunities. However, the growing popularity of Zion National Park since the start of the pandemic has drawn notable attention to the Springdale market.
Additionally, the rise of outdoor-focused accommodation options has increased since the pandemic. Virgin, which is located just outside of Springdale, has less restrictive zoning ordinances and greater availability of developable land compared to Springdale, while benefiting from the dramatic and beautiful surrounding scenery and proximity to the Zion National Park. As such, Virgin has generated notable interest in accommodation development in recent years and provides much of the glamping options in the area. Notably, Automatic campThe Zion site is expected to open in early 2023. Zion Weeping Buffalo opened in September 2021 and expanded in summer 2022. Additionally, Open sky open in 2021, and Zion Wildflower Resortalso located in Virgin, was undergoing expansion beginning in fall 2022. Additional glamping resorts are also in the works for the entire county.
Kane County
Four hotels would be planned for the area near the eastern entrance to Zion National Park. These include the Spirit Mountain Resort, an ultra-luxury resort, and the Grand Mountain Lodge, which will have 182 rooms. Across the rest of the county, a variety of glamping properties, including high-end glamping resorts, are also in the early stages of development.
Outlook
While demand began to normalize in the second half of 2022, room rates remain well above 2019 levels, with no expectation of a room rate correction. The normalization of demand was largely attributed to the return of remote workers to offices, as well as the return of children to in-person school. In addition, the international marketing of the area had been interrupted following the start of the COVID-19 pandemic. According to market participants, international marketing would have resumed in September 2022. Thus, international demand should supplement some of the lost domestic demand in the future. Additionally, continued economic growth throughout the region, as evidenced by the significant number of planned developments in Washington and Kane counties, is expected to support the lodging market in the future and drive additional housing development in the future.
Comments are closed.