Last Minute Villas

Its been a long time since you have been subjected to a general newsletter. OH NO - I hear you cry!!

I have felt the need for quite a considerable time to document my feelings as to where the rental market and Vacation Home sale market is at present.

Its very easy - in my opinion ITS UNSUSTAINABLE.

Property prices are still rising by really silly amounts. Yes that’s great on the surface, but match today’s house prices with what people are quoting for rentals, anybody seen a 20 or 30% rise in their income from guests?

Anybody seen flight prices coming down?
Anybody seen car rentals coming down?
Anybody seen attraction prices coming down?

It seems obvious to me that any form of economics will show that if you have a home and have a mortgage of anything in excess of $1000 with all the associated costs like utilities, management, taxes, replacement and upgrades, and if a home is being rented for anything less than $80 a night based on 35 weeks rentals that home is being run at a loss.

I have seen evidence that homes are being rented for less than that. Fortunately I have seen more evidence that owners are sticking to their guns and getting what their home is really worth.

This is not a Last Minute syndrome. In fact I have been told by many owners that because we are so popular its easier to stick out for the rates but yes there are other sites that lead owners to desperate measures.

I am not for one minute suggesting that a market economy is wrong but I feel for the people that have been left in desperate situations by false promises by a whole myriad of people over here,in fact I suppose to cut prices is the first reaction!

Unfortunately I think all that does is delay the final sad outcome.

I enjoy speaking to owners when they come to visit their homes. It’s a fascinating insight as to how people operate their homes interestingly, and I think surprisingly, its usually owners of less than 18 months who offer low prices. (I would have thought the high property prices would preclude this!)

The long term owners, even though they could afford it in the main, are not lowering their rates unless its a special one off deal.

The long term people, I think, say to themselves, we have seen all this before - potentially supply outstripping demand, and these long term owners wait until all the other homes are filled with cheap rentals and then they know they can get the price they need to survive. A good strategy?? That’s your decision!

I see Florida being full this year probably one of the best years for the past 5 years yet I do not see too many owners taking advantage of this. And when we are already getting enquiries for 2006 and 2007 I find it difficult to understand the panic.

Yes, I hear you say, but what about the other sites?

Unfortunately I have no control over them, but you can at least have your say and try to have some sort of influence over other owners.

I am not advocating a price cartel or anything like it but I can see disaster ahead and the only winners??

Realtors!! The very people that probably got many owners in to the situation they are in now.

DO NOT BLAME internet sites for this, or for owners not getting bookings. With sites like ours, you, the owners are in control!

If the enquiries come through, its your skill to convert them to bookings, its your decision as to the pricing, its your web site that is the brochure for the guests to view, its your techniques for making sure converted bookings are satisfied.

Our job is to have the most popular site , getting visitors, getting enquiries and not having too many owners competing for the same enquiries. This I am proud to say I think we do well.

Vacation rentals are a business and like everything its supply and demand but it only takes one owner to drop the price below realistic levels to create a precedent.

Hence the “I have been quoted XXXX can you beat it?”

As always its your decision you know what works for you.

That’s it. I just felt that maybe this might help to try to clarify a situation which unless it improves as far as rental rates are concerned will cause a lot of heartache for people in the future.

Hence my “UNSUSTAINABLE” comment.