The Myrtle Beach City Council has unanimously approved a new prohibition on long term hotel rentals ordinance that forbids short-term rental hotels and similar properties from offering stays longer than 90 days at a time along 114 city blocks stretching from Kings Highway to the ocean. This first approval decision was made on Tuesday. A second approval is required.

“Our hoteliers are impacted. Our restaurants are impacted, our attractions and entertainment venues are all impacted by fewer and fewer visitors,” assistant city manager Brian Tucker said at the Tuesday council meeting. “If the public sector is losing $7 million a year, the private sector is losing a multiple of that,” Tucker said.

Is Assistant City Manager Bryan Tucker’s statement true?

According to Loopnet, there are currently 8 older and dated prohibition on long term hotel rentals properties for sale in the city limits of Myrtle Beach. If the market has such a high demand among these dated hotels for daily rentals, why are these for sale?

In February 2024, Hybridge Capital Management purchased the Yachtsman Resort located at 1304 North Ocean Blvd following its bankruptcy.

Hybridge Capital Management is a Real Estate Investment Trust (REIT). Their objective is to convert the 159 beachfront condominiums into permanent dwellings for long-term occupants. How could this new prohibition on long term hotel rentals affect this investment?

Will an exception by made by the city, exempting the prohibition on long term hotel rentals to the Yachtsman Resort?

REIT’s have purchased Brittain Resort Hotels, the SandCastle Hotels, among others in the past few years. Concerns are that this prohibition on long term hotel rentals ordinance may put a strangle hold on new investments.

Prohibition on long term hotel rentals

Is there a market for daily rentals with families staying in dated hotels?

Tourists will always opt for the purchase that offers the best value when presented with a multitude of options. As the saying goes, markets are efficient and dynamic.

With the options of nicer oceanfront hotels, oceanfront condos, and beach homes which can sleep 8 or more family members at a lower cost per person, is there really a market for daily rentals into dated hotels with two beds in one small hotel room.

Asst. City Manger Tucker’s statement, “If the public sector is losing $7 million a year, the private sector is losing a multiple of that,” is in conflict with the efficient market principle.

The efficient market principle would say no. These older, dated hotels simply can not compete with newer, larger options. So in reality, there are no increased tax revenues lost by the city. There are no daily rental customers for these older hotels to collect taxes from.

So what is the new prohibition on long term hotel rentals really about?

Said Zeb Thomas III at the November 5th planning commission meeting, “We have a lot of old, dilapidated properties all throughout this area, and ideally, I think the city would like to see these properties redeveloped” Zeb Thomas III, Planning Commissioner. Zeb’s family owns the Dayton House Hotel in downtown Myrtle Beach,

We spoke with Randy Oparowski today about the prohibition on long term hotel rentals. “The excessive nature of this, this is unprecedented in the history of Myrtle Beach,” said Randy Oparowski, Oparowski Property Management.

“This covers about a 5 mile square area, which is 25% of the Myrtle Beach City Limits” said Oparowski. “It’s affected multiple owners in this area,” he added. “I have investor owners, who solely rent to long term rentals for the consistent stable income in buildings that are over 50 years old,” he added.

“Most of these buildings that were built in the ’40s, ’50s, and ’60s have been used for long term rentals for decades.” said Oparowski. “Other reporters have quoted city officials as saying there is a motive for redevelopment in this new [prohibition on long term hotel rentals] ordinance, ” Oparowski concluded.