New report shows how short-term rentals can help meet demand during LA28

Key Takeaways

• A new report by Deloitte predicts that high tourist demand will exceed lodging availability in LA and Orange Counties during the LA28 Olympic Games, potentially leaving up to 320,000 visitors with limited lodging options across peak days.
• The study looks at projected visitor numbers, existing lodging capacity, and opportunities for LA and California to capture tourism revenue and visitor spending by increasing their short-term rental accommodation supply.
• Deloitte estimates that expanded short-term rental supply could help meet lodging demand for an additional 282,000 visitors across peak days and capture over $488 million in economic activity for local communities.

A new report by Deloitte examines how lodging demand during the LA28 Olympic Games could exceed typical market capacity during peak competition days.

The LA28 Olympic and Paralympic Games will take place primarily across Los Angeles County and Orange County and are expected to draw 15 million visitors from around the world, creating one of the largest tourism surges the city and counties have ever experienced. In the first 24 hours of registration for the LA28 Ticket Draw, LA28 received more than 1.5 million registrations. This is unprecedented excitement for the Olympic Games 2.5 years out.

Deloitte’s analysis projects exceptionally strong demand for accommodations in Los Angeles County and Orange County, with up to 320,000 visitors seeking additional lodging options across peak days.

Managing lodging demand responsibly

Deloitte analysis projects strong demand for accommodations in Los Angeles and Orange County, with spectator demand projected to exceed the capacity of available lodging in LA County and Orange County on 13 of the 19 competition days, potentially leaving up to 320,000 visitors with limited lodging options across these peak days. While a significant portion of the lodging needs for athletes, people working at the Games, sponsors and other event stakeholders are generally addressed through university housing and hotel room blocks, an effective lodging strategy for spectators will ensure Los Angeles is prepared to welcome visitors from around the world and showcase the best of Southern California’s vibrant communities.

The Los Angeles tourism sector is nearing its pre-pandemic visitor volume and hotel rates have surpassed 2019 levels. Thoughtful policy adjustments to local short-term rental laws could enable the city and counties to deploy flexible lodging capacity and maximize the benefits of the tourism surge across local communities.

With a limited amount of new short-term rental supply, the city and counties could:

• accommodate more tourists, without constructing new lodging infrastructure,
• help positively impact price stability of the lodging market for attendees,
• and, allow more tourists to be accommodated locally, amplifying and improving the distribution of economic benefits to more communities and residents.
  
  

How short-term rental policies can help

By increasing short-term rental supply, Deloitte estimates the city and counties would not only provide tourists with more lodging options but also capture millions in direct economic activity including jobs and combined tax revenue. The analysis estimates:

• Doubling short-term rental supply could provide an additional 282,000 tourists with lodging on peak days—accommodating 87 percent of the total night gap and capturing over $488 million in direct economic activity, including:
  
  1. 5,300 jobs
  2. $120 million in combined tax revenue
• A 40 percent increase in short-term rental supply could provide 168,000 more tourists with lodging on peak days, accommodating 46 percent of the total night gap and capturing over $257 million in direct economic activity, including:
  
  1. 2,800 jobs
  2. $63 million in combined tax revenue
• A 20 percent increase in short-term rental supply could provide 79,000 more tourists with lodging on peak days, accommodating 24 percent of the total night gap and capturing for the city and counties over $136 million in direct economic activity, including:
  
  1. 1,480 jobs
  2. $33 million in combined tax revenue

“Excitement for the LA28 Olympics is already high and now the numbers are clear: demand for lodging could exceed capacity, and tourists need more options for a place to stay. Short-term rentals are a simple and sustainable solution to not only accommodate more visitors in the L.A. area, but also generate millions in direct economic activity that would benefit the city, counties, and local communities.”

Justin Wesson, Senior Public Policy Manager, Airbnb

Growing support from local leaders

The LA28 Games offer a significant opportunity for cities and counties across Southern California to benefit from the surge in economic activity, especially Los Angeles, which is at the heart of the event. Local leaders and organizations have expressed support for smart short-term rental policies and are urging lawmakers to act—not only to capture this critical economic opportunity, but also ensure a successful world-class Olympic Games.

“The LA28 Games are expected to bring millions of visitors to LA and will create one of the largest tourism surges and economic opportunities we’ve ever experienced,” said Stuart Waldman, President of Valley Industry and Commerce Association. “Reasonable short-term rental rules are the practical solution to expand LA’s accommodation capacity without the cost of new construction. If we can accommodate more visitors locally, we can amplify the benefits of visitor spending for communities and small businesses across LA.”

Stuart Waldman, President, Valley Industry and Commerce Association

“The LA28 Olympics are a huge opportunity for Orange County’s business community, which is why we need to be ready,” said Jeffrey Ball, CEO of Orange County Business Council. “By expanding short-term rental options, we can maximize the benefits of this once-in-a-lifetime event in our community, helping local shops, restaurants, and service providers thrive as we welcome visitors from around the world.”

Jeffrey Ball, President and CEO, Orange County Business Council

Download the full report here.

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