No value. No Good. No future. Volatile times for holiday/vacation rental cottages

This is a bit of a complicated blog.  I attempt to address uncertainty and focus on how to keep things right for when things stabilise.  I did think twice about publishing because it does not make for a ‘happy everything is rosy in the garden read’ but the message is positive.  It should be remembered that our experience is very localised in West Central England / East Wales.

I have put in some photos taken, recently, after a visit to two astonishingly high quality holiday lets near Clun.  The photos, I hope, will help lighten things up.  They do show how really beautiful our area is.

 

 Clun Castle.  A cow is just to the left out of shot.  It was very curious and only a few inches away.  Such encounters aside, this is a great job.

July started with a bang with very strong bookings taken but volatility refuses to go away.  In amongst this uncertainty, the question ‘what is value’ is asked more and more often.  The more it is asked, the more uncertain it appears to become.  If we were asked to make a prediction on the basis of what has happened from the beginning of June, any answer would be complete and utter guesswork; it would be as good as ‘consulting the cards’, staring at tea leaves or resorting to a simple throw of the dice.

It is reminiscent of the pastime of some Thai lorry drivers in the middle East in the 1980s.  They had a game they called ‘High-Lo’.  Many were permitted to go home once every two years, otherwise they worked driving to feed their families and send their children to school. The lived on wide shelves in huts sharing one air conditioner in the middle of the desert.  Their sacrifice enabled a well above average lifestyle for their loved ones.  The boredom was so extreme that some chose to gamble a month’s or, sometimes, many months’ wages on the throw of a dice.  Uncertainty seemed to be a drug and some were willing to risk all.

For a strange reason, some choose to risk more than the challenges that events can throw at us.  In our case, we can win through minimising risk with imagination, flexibility and sound management. 

 

The line of an ancient drovers’ way

No one would have predicted, after the reasonable regular looking start to the year, that bookings taken for months to come would go haywire over the last few weeks.  Something radical is happening.  What makes it even more odd, in our area, is that the weather has been spectacularly good after 16 months of what could be described as ‘the weather from Hell’ for Holiday Cottages.

We will hold off publishing an interim booking value index for July but will publish the full month’s index in early August.  Volatility is certainly with us; the first week of July saw a burst of bookings well above 2012.  The second week took everything back to square one.

This throws a spanner in the works when asked to make revenue predictions for new cottages coming onto the market.  Sometimes, I funk it and say: ‘on the basis of the market up to June, we estimate etc: etc:’. Of course, people are seeking for a steer and reasonable guidance before taking decisions about whether to let at all, an investment in a hot tub or whether adding en suites is a good plan.  The value of these investments is directly reflected in the value felt by guests staying in the improved vacation rental or holiday cottages.

Experience teaches you to be able to go into a place and, just like someone estimating how much it will cost to do up a listed building.. ‘so much a square meter’ or square foot, so I can usually pluck a half decent figure out of the air.  In recent years, this has, at times, been astonishingly accurate although I cannot really understand how I do it.  It feels like half way between the judgement you use when throwing a ball of paper across the room at a waste paper basket and using deliberate systematic comparisons to similar properties in the area.

Value is a complex thing; it is a combination of what is experienced by the guests in terms of the accommodation and the rent they pay.  The two go hand in hand but this intimate relationship can bust to pieces if quality drops below a certain level.  Some holiday cottages can be super quality and if the price matches but does not exceed the quality, you have value.  If the price is lower so ‘value’ goes up, from a fair price, to ‘a bargain’, to ‘a snip’ to ‘a steal’ to a ‘gift’.  If the price is static but quality is the variant then, again the sense of value can go from fantastic, good, to sound, to fair, to poor to feeling it is the owner who has had ‘the steal’. Guests / buyers tend to divide into two categories.. those seeking value and those seeking quality.

If quality drops below a certain level so the fundamentals of comfortable life are not secured and all value evaporates; you get no quality and no value so alienating both types of guest.  if known in advance, such lets are unlettable at any price.  Fundamental things include reasonably comfortable beds, freedom from intrusive noise, privacy, comfortable seating and a useable kitchen.  These are not really negotiable; if they are not there then there is no real value.  Not sleeping well, not being able to sit comfortably or cook properly in self catering is the same as having a rotten time, however good everything else is.

Value depends on fundamentals and is not only related to price.  When the fundamentals are supplied then a relationship between price and the quality of everything else does apply.  This is the formula for value.  It is why, at a certain point where the quality of fundamental items breaks down, all value evaporates and guests either spot this and do not book or arrive and, rightly, get mighty upset.

 Provincial grandeur of the ball room of a coaching hotel in Leominster.  7 coaches came and went in a day.  The railway arrived in the 1860s and it all ended.  This would be the last night before arriving at Clun

Getting through these confused and slightly frightening times means that value must be top priority.  How to set rates in the middle of confusion is something we are working on.  The problem is that buyers are highly likely to be equally confused and, as any salesperson knows, getting sales from confused buyers is three times as difficult.

We strongly believe that things will settle.  Where there should be inflexibility on the fundamentals of value and quality the opposite, where practical, should apply to pricing. The good news, at this stage, is that this does not necessarily mean downwards only; the problem is the current volatility and unpredictability.  When things calm down we shall see better how the niches are behaving and then will have a much better idea how to adapt and make the best of a changed market.

It is still very very odd that the old rule that when the sun shines bookings pick up has been 100% trashed; we will all have to be nimble on our feet.   

 
01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack

 

From Country Holiday Lets

What people want in vacation holiday cottages

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack

It’s all to easy to go out of date and think you know what the market wants when events have passed you by.  Changes in the nature of demand can happen very quickly, but finding out what people want is far from easy.

With this in mind Lorna, the other manager in this business, asked our 9,500 twitter followers what they wanted from a holiday cottage.  We had a remarkable response and I paste a few in the rather awkward twitter style created by the medium.  They’re a little indigestible in so I will comment on them below.

“picturesque, reasonably close to interesting places/attractions/places to eat out, dogs welcome”

“we stay in them all over the country.  Spare toilet rolls not just half a roll, soap for hand washing in bathroom, not watered down washing up liquid. Enough cutlery etc for more than one meal. Dishwasher a bonus”

“Dog friendly but still special “
“somewhere to lock my bike!

“comfortable furniture, blankets to snuggle in, everything for the kitchen including scissors, wifi, starter pack groceries”

“Quiet location, nicely decorated (not always so!), well appointed. Nothing flashy. Relaxing.”

“don’t know if it’s been said..I think obvious.. but not always the case. a bookcase of books & some board games”

“top class bed/bedding; great shower; lovely views/location; an honest “owners-recommendation” list”

“Close proximity to good pub/restaurant”

“Somewhere dog friendly, preferably with Internet. Interior photos that are dark and dingy don’t help!”

“lovely views, freezer. wifi, telly, dishwasher and proper shower :-)  under floor heating a bonus!!”

“Enough pillows is often a problem we find.”

“dog friendly. Wood burner. Location near beach. Parking. Bike storage”

“hot tub. Privacy. Maybe wifi. Nice walks.”

 
For a woodland cottage Bluebell has most of pluses
A few years ago, Wifi would not have appeared but most of the rest did not give us any surprises.  The overall impression is that people want a sound comfortable and well arranged place which can accommodate extras when required.  (Pets are a significant issue).  The emphasis on little things like concentrated soap, kitchen scissors and washing up liquid is telling.  Oddly, there was no mention of sofas which are one of the key features to include in any presentation.
The key red flag items of bedding, sofas and decent bathrooms still apply although, surprisingly, the quality of sofas did not appear at all in our mini survey. 
 
This mini survey was comforting in that it seemed to support our view of what the market wants but it was a tiny sample based on our twitter followers and those who responded.  We are finding that other, quite surprising factors, appear attractive to the market.
 
Ease of booking and the ability to use automated booking for non standard arrival and departure dates has, without a doubt, generated more bookings. We have pioneered ‘arrive any day depart any day automated booking’ and are now to introduce the capacity for owners to offer automated booking discounts based on occupancy.  There are two variants.  One is a simple percentage reduction on all lengths of stay related to numbers of guests and the second is a more simple straight discount, depending on guest numbers, regardless of the length of stay.
 
The IT involved is quite complicated but once the simple logic is sorted out, I am told that making it happen on our system is practical.  We are about to run this live on Pheasant Cottage which is to become an occupy 6 cottage with a discount for occupy 4.
 
Pheasant cottage with its two front doors
The market is rolling on at a terrifying pace.  Economic changes are calling the shots.  Offering quality and value is not enough, you have to offer flexibility and as many options as possible to get the edge over less flexible, ‘ring up and ask us’ rivals. 
 
LONG TERM MARKET PREDICTIONS FOR OUR AREA
We feel that the larger vacation rental and holiday cottages will continue to attract more demand as long as they offer en-suites for some or all bedrooms.  Those that have no en suites will suffer.  Only the best occupy 2 cottages will survive, the lower quality ones are doomed.  This is partly down to over supply, partly to increasing expectations and partly to the discretionary nature of the spend for couples.  As ever, the mantra about quality and value applies so, there is no escaping the need to set prices accordingly.  Poor quality may cease to get bookings however low they set their prices.
 Bluebell again

01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack

 

From Country Holiday Lets

‘The eye’. Ambushed by history
For quality and value holiday cottages
01568 612467 for more.
info@countryholidaylets.co.uk. Useful for new cottage owners:http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack

There is a special depth of history and beauty in our area; it reveals a part of old England and Wales that is still with us and may always be here, for those who can listen and do more than just see.

A couple of weeks ago, I was asked to visit a possible new holiday cottage in a small village called Morton three miles north of Leominster. A rare survivor, it is one of a small chain of ancient villages dating back 500 years or more. As a small child, I thought I knew it well.

Strangely, I did not recognise the directions the owners gave me . Arriving at the ancient cottage, I found that it was part of the village that was quite new to me. The cottage sat quietly close to a weeping willow. As a small boy, I would have been entranced because, sometime in its history, it had been used as a lock keeper’s cottage on the long gone Leominster Canal.

This canal was largely financed by a grandee who built a Georgian Mansion of Berrington, about a mile away. He thought it a good idea to have what was almost a private waterway to send his produce to the market and to collect coal from The Mamble about 12 miles, several locks and an alarmingly narrow tunnel to the East; and this delight had been unknown to me for well over half a century.

This part of the ancient village is tucked away, hidden down an unmade track. You cannot go beyond the house because the remains of the canal block passage. In the distance, between the trees, can be seen a view of the 11th century Eye Church perched on what was once an island as if looking out over the marshes and surrounding countryside. For a moment, it seemed to peer at me, as I gazed upon it.

I looked around. Some things don’t change; it is as if time slows down and the rush and hustle of the World is held back. As I left, following track to the centre of the quiet village by the old school, it seemed as if fifty years had fallen away and not an hour had passed since I had ridden my small bicycle down that road to watch the railway trains from the bridge at Eye.

Experience gave me ‘the eye’ to the place as well as seeing it. It is similar to the distinction between hearing and listening. Seeing and feeling are allied. Something similar applies when looking at old houses which need restoration or, simply, rescuing before time and events make them crumble away. Some people have ‘the eye’ and the imagination to see through or around clutter, dirty confusion and careless dereliction, to see the what the future could hold.
Similarly, when I visit houses with a thought to advise how they might be used as holiday cottages or lets my eyes must not only see but they need to feel and sense the place.

I was called out to an ancient Elizabethan manor house to do just this a couple of days ago. But this was a particularly difficult task because it had been extensively and most excellently restored after a major fire. Sensing the place was difficult, because some aspects were ancient and others had been replaced with facsimiles, what could have been an easy had turned confusing as original nudged close to restored and, in a few places, the new.

In this case, it was necessary to turn off certain aspects of sensing a place whilst still looking. This was rather like deciding not to listen to confused talk for fear of being sucked into chaos whilst still valuing the need to listen. It is a very difficult thing to get this right and there’s always a danger of failing to listen when you ought to have listened. I felt the same way when being shown around that superbly restored Elizabethan mansion.

Such experiences are some of the greatest pleasures and challenges of working as a booking agent in our area. It is astonishing, also, how social patterns seem to replicate: history seems to repeat itself not only from one age to the next but similar dramas run in parallel a hundred times over across the country.

I looked at the remains of the canal and its turning pool in Morton. For a few moments it was no ruin or shadow of what it once was, but barges were at the wharf and coal was being unloaded to go up to the house a mile away. I blinked and the canal returned to the shadow it now is.

Perhaps, this sense has developed over the last few years as I have taken many thousands of photographs and visited many places. It is come as a gift. ‘The eye’ lends to seeing what listening adds to hearing. History is not dead except for those who will only see and hear.

I’ll try to dig up some photos for the next post.

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners:http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack

Recent post on Quality and Value: here

It’s more than business for holiday cottages. 31 July 2012

From Country Holiday Lets For quality and value cottages

(Given the subject of this article I though not to link any cottages here. Instead, a few local sights feature with links to groups of near-by cottages behind the photos)

Ring 01568 612467 for more information. E-mail: info@countryholidaylets.co.uk

Useful information if you are starting out as a cottage owner:
http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack
UNDERSTANDING WHY OWNERS LET OUT THEIR COTTAGES
It is surprising how many cottage owners are not in it for the business. There’s a spectrum from professional large scale lodge operations which are expected to make a return on capital to the other extreme where owners are happy to take a few bookings a year to help with maintenance and provide a small extra income on the side.

 

Georgian Berrington built on the lost village of Birriton (also known as Pyryton)

In between are a huge range of styles of operation. Each has its own distinct characteristics and every cottage owner needs a different style to ensure a good working relationship with us. I say ‘different style’ referring to the way we interact with the owners.

The most consistent style is the business approach. It is often the easiest to manage for people who have years of experience in business. The most difficult to manage is where a cottage might be owned by there or four siblings as inheritance from a relation. In some cases, it can be virtually impossible to work well without a clear decision maker and single point of contact.

 

The cathedral and medieval bridge at Hereford

Tread Carefully
In other cases, we have to tread carefully when dealing with close teams of partners. When partners make a decision, it is often very difficult to negotiate and advise to either finesse or request that the decision be considered in the light of our advice and second thoughts. It can be a very serious mistake to hammer away without giving both involved significant time to reconsider and digest and come back with any adjustments. In these situations, the trick is to suggest that another approach might be an idea and then send a message with as much backing evidence as possible.

 

Built by a Saxon King to try to stop the Celts from getting back their land. In places you can still see the ditch and ramparts especially near Knighton and Kington.

The point of contact will then share the new information and observations / suggestions and, hopefully, after some discussion come back to us with another ‘take’. Expecting to ‘knock up a deal’ and then pushing and wondering why nothing seems to be happening fails to understand how decisions are made in this case.

Oddly, this method of doing business is similar to the way many Japanese corporations act. Meetings are held but rather than ask questions at the time, the habit is to ask the critical questions in a following meeting; colleagues will have been consulted, the matter digested and sound thought out questions prepared. Many British business people have been caught out by this, surprised by an apparent lack of interest and curiosity, and then ‘thrown’ by a series of carefully planned and highly focused questions in a meeting a few days or weeks later.

 

Curious cattle by the track on the way to one of our cottages in South Shropshire

More than profit
There are other situations where owners really do not want to run their cottages as businesses. Some are owned by business people who wish to do things for other than making an immediate profit. In some cases, we have seen cottages fitted out for seriously disabled people complete with ceiling tracks and full modern moving and handling equipment.

 

Asleep for 800 years. An early Norman invader near Ludlow & Leominster (c1100)

These owners say that their main aim is to provide something extra which they think is important. I have, more than once, said that the niche market for this most appreciated service is limited and carries significant extra selling costs; they, more than once, have told me that making profit is not the main aim of the investment. It can be quite warming to come across hardheaded business people saying this sort of thing with the same determination that they would normally reserve for profit focused activity.

 

The restored Lion Ball Room built for the coaching market. Sometimes eight or more coaches stopped overnight at Leominster in the high days of the Turnpikes.

Understanding where people are coming from is absolutely essential. This ensures a more understanding, tolerant and flexible relationship between owners and agents. We, therefore, try to appreciate how decisions are made by our owners and their main aims when they decide to let out their holiday accommodation. They all want value and they all want an easy and positive relationship. It is our job to fit into these requirements.

 

From the bridge at Hay on Wye in late September

Getting this right is one of the most important aspects of a productive relationship. If this is good, the quality and management of the entire experience for guests, from initial sight of the cottage on our web site through to sending holiday feedback after their stay, is bound to be greatly enhanced.

It is about confidence and sureness of touch.

Useful information if you are starting out as a cottage owner:
http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack
Ring 01568 612467 for more information. E-mail: info@countryholidaylets.co.uk