Short-Term Rentals Benefit the Wine Industry and Santa Barbara County

Without Them, It's an 'Also Ran'

<b>BEAUTY SURROUNDS: </b> Pictured is a view of the Sta. Rita Hills, looking southeast from the Mt. Carmel Vineyard.

Paul Wellman

BEAUTY SURROUNDS: Pictured is a view of the Sta. Rita Hills, looking southeast from the Mt. Carmel Vineyard.

STRs are short -term rentals we know as Airbnb. Our shortage of reasonably priced hotel rooms makes STRs popular with wine tourists. The complaints against STRs are noise, parking, and traffic. These are correct in residential areas but are nonexistent on AG land.

There are many benefits to STRs on agricultural land:

• Extra income will keep farmers in farming.

• Consumers who stay on farm land will be more loyal customers.

Urban dwellers who support the farm to table and organic movements want AG land experiences.

For the County Board of Supervisors' October 3 meeting, they directed staff to prepare a STR Ordinance that bans STRs in:

• Residential zones;

• AG-I Zones (40 acres or less) but with a “home stay” exception; and

• AG-II Zones (40+ acres) but with a "farm stay” exception.

According to the county staff, there are 535 lawful STRs in the county providing $1,669,810 dollars in bed-tax revenue. Of those legitimate STRs, 24 percent (128) are on AG I or AG II land. Staff also estimated an equal number of STRs are operating illegally and not paying an estimated additional $1.5 million in bed taxes. Staff also stated that the supervisors’ decision would eliminate 92 percent of existing STRs because they would not qualify for the exceptions.

Banning STRs will continue the supervisors’ hostility to wine tourists. Paso Robles, two hours north of us, attracts 1.5 million wine tourists. Santa Barbara County attracts 866,000.

The Paso Robles wine tourists are not coming from Bakersfield or the Bay Area. They are from the southland. They are driving through Santa Barbara to stay in Paso Robles because of the shortage of reasonably priced hotel rooms. They want to experience staying on vineyards and dining in vineyard restaurants, which are permitted in Paso Robles but prohibited in Santa Barbara County. They also want to see where the grapes are grown. They want to see where the wine is made and interact with the winemakers, all of which are permitted in Paso Robles while Santa Barbara continues to cram wine tourists into urban tasting rooms divorced from the vineyard and winery.

The Visit Santa Barbara statistics for the last several years record an increase in day trippers confirming that southland wine tourists are stopping in Santa Barbara for lunch and continuing north to stay in Paso Robles.

The executive vice president and founder of Silicon Valley Bank’s Wine Division, Rob McMillian, made a presentation at the EconAlliance–Vintners Wine/Tourism Forum on June 26, 2017. He demonstrated that by all available metrics, the Santa Barbara wine industry is a distant “also-ran” to the Paso Robles wine industry by many measures.

Tourist Wine Club sales are 58 percent in Paso Robles, 53 percent in Santa Barbara. Average bottle price: Paso $41.30; Santa Barbara $39.37. Total revenue from DTC (direct to consumer sales) is 73 percent in Paso Robles and 64 percent in S. B. The average number of monthly vistors to wineries: Paso Robles 1,342; S. B. 751. (In the U.S., the industry average is 1,116.) Averabe tasting room purchase in Paso is $86; in S. B. it's $74. Average length of wine club membership in Paso Robles is 34 months; in Santa Barbara it's 28 months. (The U.S. industry average is 30 months.)

From 2014-2016 Santa Barbara had a 4 percent drop in direct-to-consumer revenue and a 9 percent drop in cases sold.

On March 7, 2017, the San Luis County Board of Supervisors voted to permit STRs on Williamson Act land.

Banning STRs on agricultural land has no rational basis. Doing so here will benefit the Paso Robles wineries and adversely impact the Santa Barbara wine industry and county taxes.

If you support STRs on ag land, please email the supervisors at sbcob@co.santa-barbara.ca.us and tell them so.

Stephen Pepe is president of the EconAlliance.

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