Short-term rental comp erosion is hitting hotels in markets I am watching, and the direction of the pressure is not what most people expect

The 44-key coastal example is the one I keep coming back to because 11 percent RevPAR on zero capital is basically the whole argument for paying attention to regulatory calendars the way you would watch a refi window. My out-of-state rental taught me the hard way that what looks like a stable competitive set can shift on a council vote, and I was on the wrong side of that, not the right one. The question I would need answered before I got anywhere near underwriting a passive hold in any of these markets is what the enforcement mechanism actually looks like, not what the ordinance says, because I have seen plenty of registration limits on paper that nobody checks. What is the fine structure and who is staffing the complaints process?

The regulatory trajectory point is what I kept running into when I was digging into coastal Texas markets last year. Galveston's STR registration enforcement went from essentially symbolic to actually pulling listings in about six months, and the timing was almost impossible to model in advance.

What I want to know is whether anyone has found a reliable leading indicator for ordinance tightening, because by the time it shows up in the AirDNA supply numbers the pricing move has already happened.

Garfield Heights obviously has nothing to do with coastal hotel comp sets, but I have been watching the Cleveland short-term rental ordinance situation for unrelated reasons and what jumped out reading this is how fast the registration data changes. Cleveland proper tightened enforcement in phases starting late 2022, and there were blocks in Slavic Village and parts of the west side where Airbnb density dropped noticeably inside two quarters. I am not in hotels, I am saving toward a duplex, but I was tracking STR supply in my target submarkets because I wanted to know whether a triplex in Garfield Heights would face STR competition from the same street if a neighbor decided to list. The answer shifted twice in eighteen months depending on whether the city was actually pulling non-compliant listings or just sending letters.

The thing your post made me think about is who modeled the enforcement lag separately from the ordinance passage date, because those are not the same event and they can be eighteen months apart. Passing a registration requirement and actually removing non-compliant listings from Airbnb's platform are two different things. The 11 percent RevPAR move you described in two quarters sounds like a market where enforcement was real and fast. What was the enforcement mechanism, and did the operator track when the listings actually disappeared from the platform versus when the ordinance took effect? That gap would change how you time the RevPAR recovery in the underwriting.

The split you are describing between rate compression and occupancy compression is where most hold models go wrong, because they use a single blended RevPAR sensitivity and miss that the two levers respond to STR supply changes differently. ADR tends to be sticky downward for branded or well-positioned independents, so when STR supply contracts, the hotel captures occupancy first and rate second, usually with a lag of two to three quarters. That sequencing matters for a five-year DCF because the RevPAR recovery shows up unevenly, and a model that assumes a smooth upward slope will misstate cash flow timing even if the terminal number is right. The structure that wins in a contracting-STR market is a hold with a capital event or refi timed after the occupancy recovery is visible in trailing data but before the rate recovery is fully reflected in appraisal, because that is the window where the asset is performing better than it underwrote and the market has not yet repriced it. The structure that loses is a near-term disposition underwritten on current RevPAR if the ordinance enforcement is still six months from taking full effect. What is the hold period you are working with, and do you have trailing month-by-month occupancy data that would show whether the property is already in the occupancy-recovery phase or still waiting on it?