Musings: Why Pay When You Can Pimp?

News flash — Hawaii has tens of thousands more transient vacation rentals (TVR) than anyone knew.

Well, except those of us who have been following this highly lucrative, frequently illicit and generally unenforced industry, which grew some 400 percent between 2006 and 2011.

Still, it took an internet survey by the Hawaii Tourism Authority to reveal that 22,238 vacation rental units were advertised online this year and in late 2013. That's four times more than the agency was aware of, and according to the report, “We strongly suspect that the current count is lower than the actual numbers of IVUs in Hawai’i.” The 2014 count is expected to be “notably higher.”

The survey identified 4,478 units on Oahu, 11,166 in Maui County, 3,948 on Kauai and 2,646 on Big Island.

On Kauai, the greatest concentration of these individually advertised units was found in Princeville, Kapaa and Koloa, followed by Hanalei. But the difference is this: Princeville, Kapaa and Koloa are designated visitor destination areas (VDAs), while Hanalei is not.

And when you look at the TVRs as a percentage of total housing units, Koloa registered 39.6 percent, Princeville 38.4 percent and Hanalei 37 percent. In other words, Hanalei is experiencing the same intensity of use as the designated VDAs, without any of the accompany infrastructure or other support.

The report notes, emphasis added:

The number of [visitor] properties (1,932) in the State in 2013 has increased by 7.8 percent since 2012. The largest number of properties was found on the Kaua’i (637), followed by Hawai’i Island (544), Maui (442), and O‘ahu (276). The changes by island were largely the result of changes in the number of confirmed IVU’s for 2013. IVUs made up the bulk (73%) of the properties in 2013 and their numbers grew by 17 percent since 2012.

Now how, you might ask, has there been such a dramatic increase in visitor properties on this island when no new TVR permits are being granted? Gee, do you suppose that a great many of them are illegal?

These statistics help to explain why there is no housing for locals on the North Shore, and why longterm rentals in general are less available and more expensive as the market is converted to higher value TVRs.

As the number of TVRs increases, their promotion also escalates, turning neighborhoods and landscapes into marketing tools for TVRs. Some TVR owners are not content to merely rent their properties. They're also treating them like de-facto resorts, offering illegal multi-family dwellings — "2 Identical Houses To Choose From + A Studio Cottage - Rent One, Both or All 3" — with concierge services that range from private chefs and spa packages to escorted activities.

Among the newest wave of promoters are Kimmy and Glenn Rudolfsky, who came to Kauai via Las Vegas, where several lawsuits against him are still pending. They established their House of Dreams TVR business, which includes properties they own and others they manage. Now Kimmy bills herself as a “vacation rental specialist.”

This is how the industry grows, with folks saying, gee, why should I pay when I can pimp?

The Rudolkskys went so far as to publish online an “exclusive guidebook to the North Shore of Kauai”that could well result in injuries and death. After Kimmy and Glenn proclaim that Hanalei means “lei-making,” they suggest such activities as jumping off the Hanalei pier, visiting Queen's Bath, letting your children play in Lumahai Stream, driving on the sand at Kalihiwai, snorkeling at “Kahili Quarry Beach” [sic] and “Secret Beach,” hiking to Hanakapiai Falls and swimming from Kalalau to Honopu.

To give you a sense of the enormity of this industry, consider their FAQ link:

First & foremost, find the right “Kauai Vacation Rental” for your visit. DO NOT purchase airfare before finding your vacation home. Due to the overwhelming popularity of movies such as “The Descendants” and the TV shows, “Buying Hawaii” & “Hawaii Life”, Kauai has become the “IN” place to be. You may be surprised how far in advance people reserve vacation rental homes, sometimes up to a year or more.At House Of Dreams Kauai we work with over 200 Kauai Vacation Rentals in addition to the homes we own. We will help you find your dream home.

Of course, they're not really pimping the place because, as they proclaim on their website,  "We LOVE Kauai’s North Shore."

Especially when all the TVRs are occupied with paying guests.