Blog – Holiday Lets for Sale in association with Country Holiday Lets

This blog will take the place of the CHL google blog in due course.

A changing market for holiday cottages will punish low quality and reward high quality.

 

A couple of days ago, I visited yet another cottage which was a long term user of one of the large Legacy Agency services.  One of the remarkable aspects of all such cottages is not just that they tend to be some of the worst of worn out 1980s chintzy damp corn dolly landlord carpet places, but that they all conform quite rigidly to a horribly out of date formula and attitude.

‘Good enough for them’ is alive and well in the UK holiday cottage market.  It is quite astonishing that many similarly dated and often deeply unpleasant offerings are still in business getting many weeks lettings each year through legacy booking services.  The recent one had:  landlords ‘practical’ carpet;  no sofa;  worn out non matching chairs of different styles in the lounge; a truly vile uncomfortable bucket chair;  a bookcase full of damp and dated items; about 20 busy cutsey pictures of all sizes and unique frames dotted about on the walls of the living room and dining area;  a stained early 1990s plastic covered sink and drainer with cheap taps; an ‘economical’ kitchen top; those frilly glass pendant light shades which were all the rage in the early ’80s; one of those coffee tables with a brass tray top and with some re-used legs from a 1930s brown wood table; worn curtains; and all this was before going upstairs.

Upstairs was more of the same complete with economical mattresses; artificial fibre patterned bedding; millions of pictures; an anarchic, garish colour scheme and a bathroom straight from a low budget American movie from the late ’70s complete with cute flowery patterns on the glass of the shower cubicle.  It had a tacky four poster with decorative patterned curtains which could not be drawn around the bed.  The cottage benefited from an exposed wooden frame which is common local vernacular architecture.  This creates a fussiness to an interior before any furnishings are added.  The whole impression was of an anarchy of colour, pictures shouting for attention, clashing decor set off by a slight but pervasive smell from the dark patterned’ practical landlord’s carpet’ which seemed to permeate throughout.

The new owners were equally horrified and had already planned to sort out what is close to an insult to quality.  It was a mercy that I did not have to perform the all to common delicate quadrille required to dish out the bad news that putting things right will not be easy or inexpensive.   But, astonishingly, the previous owner was still getting bookings for what would have made me arrive and walk out in in 30 seconds.  Transparency in the holiday let and vacation rental cottage market has, still, a long way to go before high quality cottages get the bookings and rents the deserve.  Times are changing but, sometimes, progress seems to be painfully slow.  Although the brochure market is weakening it is, still, a very significant part of the demand for holiday cottages in the UK.

The new owners had already started to de-clutter.  I had taken a look at the cottage on the web site of the legacy agency;  where there was a vacant TV stand, yes, you guessed it, there had been a glass screened old fashioned cathode ray TV.  I, really, thought that such things were history.  Flat screen TVs are not that expensive  nowadays and it is an upsetting sight to see perfectly good flat screens on municipal dumps because, in  turn, they are considered out-of-date lacking the latest gadgets.  To serve up even older Televisions to cottage guests is bad news… it is, almost, an arrogant disregard for quality.

The good news is that the owners are sorting this disgrace… it was that bad.  Taking one less plain awful, bad value holiday cottage off the UK market is good news.  Meanwhile, something interesting is happening at the other end of the quality range.  A new force is entering the market and it insists on equal or better quality than that offered by hotels.

‘Commercials’… usually white collar, have been responsible for about 25% of all rents booked for in September.  This new source of demand came from virtually nowhere.  The reason is a combination of supply, that the right quality is available, and demand.  Companies have discovered that it can easily be 50% less expensive, without asking their staff to sacrifice quality, to put them up in holiday lets in favour of local hotels.  When a team of 5 or so are involved, savings of £800 per week are easily practical.  We are having to learn how to cater for this new demand and companies, in turn, are learning about how we do business.  This interesting development should, if it continues, increase occupancy for holiday lets in the shoulder and low seasons and just might ensure rates are steady or slightly higher in those periods after a long time of static or, even, falling rates.

These are interesting times.  At the one end, there are the horrors of quality (lack of) and, at the other end, there are modern holiday lets which could well prosper further with new demand from companies seeking better value for their staff when away on business.

 

September booking value index

It looks like it will end up at around 90%.

The good thing is that if the commercial demand persists, this could go some way towards higher index values in the last months of this year and the low and shoulder seasons of 2014.   Certainly, without the commercials in September, the index would have been closer to that of July, which was disappointing.   It is good to see quality being rewarded by a changing market for holiday cottages.  You can be absolutely certain that poor quality cottages will never benefit from this new development.

 

The index will be published in early October.

Blog from Country Holiday Lets for Sale. Early September.

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

THE AUGUST HOLIDAY LET BOOKING VALUE INDEX

As this is the first blog in September, here is the latest holiday home booking value index:

The value of bookings taken compared to our base year of 2012 adjusted for the rental value of cottages included in this survey plunged in June and July but August has seen a welcome recovery, with strong bookings for next year.

 The index for 2013 to date:

 Jan            Feb          Mar           Apr          May        Jun          Jul           Aug  

74.72       85.70     110.60     90.13      68.47     53.80     64.20     100.2%

100% indicates no change in market conditions.  Above 100% would indicate improving demand.  The index is similar to a manufacturing orders index in that it reflects the value of bookings taken during any one period mostly for stays in the months or the year to come.  It reflects market confidence and not the actual stays taken in the months recorded.

We are receiving many more enquiries from businesses wanting to find accommodation for short periods for managers and supervisors.  The economics are such that the savings can be as much as 50% on moderately priced hotel accommodation.  On recent booking was for 19 days for a site manager overseeing the modernization of two supermarkets.  His cost per night was around £49.00.  Here’s the thing, he is staying in a sleep four, 4 star holiday let in late October and early November.  Some hotels, still, even charge for WiFi;  it seems that they have a problem seeing customers as guests and they appear to display a contempt for people staying with them.  Surprisingly, included are American hotels, still clinging to this practice just as they took far too long giving up radically unpleasant charges for using the telephones.

DSCF9648PROGRESS FOR HOLIDAY LETS FOR SALE

Under a week into the project and things are working well. The holiday lets advertised have been visited by a healthy number of viewers from a highly focused source.

Our plan to attract people with a specific interest in the holiday let sector and who were highly likely to be responsive to advertised holiday lets is working as we expected. The best web sites provide highly focused information to draw people in and those same people will be attracted to the advertising on the web site. If you are thinking of buying a holiday let, a cottage or simply starting a holiday business then any generous source of information about that activity is bound to be of great interest.

In addition, our prediction that the specialist aspect of the business will have very substantial search engine benefits appears to be coming true. We have had huge experience battling in the cottage booking sector where the word ‘cottage’ is one of the most highly competitive and fought after terms around.  However, for holidayletsforsale.com the competition is vastly lower.

We are already getting organically generated search visitors which is  remarkable progress proving the formula: focus on what buyers want and get them to visit by providing them with highly relevant and extensive useful information.  Plus, of course, we are using the foundations of Country Holiday Lets as an extra highly effective contribution.

 

Some more obscure stuff about search terms etc:

We also benefit from many ‘long tail’ search terms. These are infrequently used but high conversion search terms. They are often several words but some can be less. Thus, Welcome Pack Template is a long tail search term meaning that there is little competition but that, also, those who use the term normally mean business.  We provide information on this area at length and have set up a dedicated page, named accordingly. Search engines like this arrangement and so anyone who puts in Welcome Pack Template will, in due course, see our page right up front and easy to click on. For these words we are already near the top of page two on Google.   In less than a week this  is remarkable progress.DSCF9524

Some businesses are able to use search engines free of charge and earn a living.  One I know of specialises in asbestos removal. The competition for the word ‘asbestos’ is as low as the competition for the word cottage is high.  This is why the asbestos people spend little or nothing on internet advertising where the likes of Hoseasons and its many brands spend tens of millions on pay per click with Google and other marketing.

The advantage we have is that the word ‘Lets’ is used by estate agents and the legal profession in preference to ‘cottage’ and those first considering holiday letting often use the word ‘let’ before they realise that the general practice in the UK is to describe all from tiny cottages to mansions as ‘cottages.DSCF9743

The software to construct a passably professional web site can be found on the internet virtually free of charge.  Again, for our sister business, www.countryholidaylets.co.uk we had to invest very heavily in a booking engine which is, we like to think, one of the most advanced of its kind.  We estimate that the cost of software for Holiday Lets For sale was about fifty times less than our expenditure for Country Holiday Lets.  The former is based on WordPress and the latter on Joomla / Jomres.

 

This is an exciting project.  If you feel we can help by way of advertising or simply to seek out information and ideas that are not yet included in our advice section do not hesitate to contact me.  charles@holidayletsforsale.co.uk  or ring us on 0044 (0)1568 612900

 

From Country Holiday Lets

June Market Report. Look for opportunities.
The Early June Report can be found below

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

Strange things have been happening.  Yes, I started the last post in the same way but change just keeps on coming.

Early July update(04 July).  If things continue to the end of the month as they have done in the first four days, the July index will be comfortably on the positive side of 100% and perhaps as high as 125%. 

Pictures featured are of our latest owners’ occupy 8 vacation rental in a stunning location by the picturesque River Wye. (The link is worth a look.  I hope to have River Cottage up on site shortly and will add its link to this blog).

River Cottage in one of the most beautiful locations in England

First:  

The Booking Index for June.  But what does it mean? 
Remember that this relates to the value of bookings actually taken in June; most will not be for June stays, but for stays in the following months.

The index is rather like a manufacturing orders index in that it predicts business health and activity in months to come as well as consumer / guest confidence in the months recorded.

June has turned out to be either the start of a very volatile period or an indication of a very difficult year still to come.  As you will see, the value of bookings taken compared to our base year of 2012 adjusted for the rental value of cottages included in this survey plunged.  It is too early to say what July might do but we will report two weeks in.

 The index for 2013 to date:

     Jan        Feb       Mar       Apr        May      Jun
     74.72     85.70   110.60   90.13     68.47    53.80

100% indicates no change in market conditions.  Above 100% would indicate improving demand.

Our impression is that there had been a slight increase in number of ‘deal chasers’.  Some are learning that charm pays but there are a few who still remark “It’s better than having the place empty.”  Saying this to an agent is bad enough but many owners say they hear it quite often directly from those trying to negotiate prices to very low levels.  It is as if the owners might be unaware of the cost of weeks without guests.  This sort of charmless style is a disastrous negotiating ploy and I am glad to see that rates are not going to uneconomic levels.

However, it does seem that some are applying more charm which makes the whole thing less fraught and, in some cases, I’ve buckled and contacted owners even though the hoped for rates were very unlikely to be acceptable.  In one case, despite my worries, the owner was equally charmed and took a short notice booking at a reduce rate.  Ironically, the negotiating charm of a deal chaser made us money!  But we are very aware of the risk of upsetting owners with constant enquiries about rates the would never, normally, contemplate. 

A slight increase in deal chasers may indicate that June’s index figure which, if not taken in context looks frightening, is more likely to have been created at least, in part, by volatility new to the market.

It is possible that 2013 will be a poor year caused by a combination of bad weather and the market reorganising and restructuring itself in the light of economic pressures, changing demographics and, perhaps, a larger number of people choosing to stay closer to home in favour of going abroad.  This latter, long awaited trend, has yet to be felt to any great degree.

Saying we can’t help is never easy
Owners rent out cottages for many reasons.  Some do it entirely for commercial reasons but the majority in our area have mixed reasons, which makes the market more complex and, from our point of view, challenging and interesting.  I’ll start with a new trend to give you a taste.

In the last 8 months, we have had several enquiries from owners of large houses who wish to rent them out for three months over the Summer period.  Unless they are quite exceptional, we find this arrangement uneconomic and impractical; however, I follow each one up in the hope of finding a jewel and to bolster general goodwill in the local community.  If things permit, every enquiry receives a visit for further consideration of owners’ ideas.

 One of at least 9 spectacular views of The picturesque Wye from River Cottage

This trend is new and indicates, in come cases, a growing financial pressure.  Some of these houses are spectacular; it was not so long ago that the thought of renting them out to the public for holiday lets would have been anathema.  I’ve no doubt that the idea is often stimulated by the wish not to waste a resource and to share good fortune, but the growth in this type of enquiry over the last few months has been marked.  It is also possible that there is some other reason but, in some cases, economics are certainly a factor.

There appears to be a trend away from amateurism and towards a more professional, planned approach.  Fifteen years ago, the idea of design and styling to suit the market was often ignored in favour of taking a residential property, adding a bit of chintz and, hey presto, you had a holiday let.  Now, many people enquiring understand that there is a market out there and any compromises towards what it wants must be kept to an absolute minimum.

The ‘hot tub conversation’ now happens two or three times a month.

 The cottage is that one straight ahead just as the beautiful river Wye turns out of view

For the last three years I have waged war against owners who use old fashioned TVs, present cluttered interiors and, in some cases, have a attitude problem towards guests.  The need for this campaign has significantly reduced.  As times get harder, it is becoming patently obvious that trying to run a holiday let on the cheap or being mean with what is offered to guests is a blindingly obvious way to fail.  People simply will not put up with this any more.

1980s interiors don’t stand a chance.  The glorious window, below, is to the right, out of shot.

Last week, alone, we have had to sadly say to two three owners that we could not help.  Had we taken on their vacation rental holiday cottages we could not been much use.  One was straight from the 1980s complete with chintz, pub carpet, those frilly clouded glass lamp shades and a tired sofas from another era.  It hit three non negotiable quality factors that many guests will not tolerate: bedding, carpets and the quality of the seating.  

Whenever faced with the problem of owners who do not or cannot invest, I always try to explain that the market is what is forcing our hand.  Even as I say this, all too often, I can hear that it was not worth saying.  Many people simply are not interested in what the market wants… it is as if they either do not believe an agent who stands to lose by walking away, or that they think they can buck the market.  Either way, I feel that we nearly always lose more than the time and cost in these situations because there will be someone out there feeling put out by our inability to buck the market on their behalf.

It is as simple as that.  I point them towards successful cottages rented out on the Internet and we have tried out a more oblique approach.

Although it may upset many people, we have much to  thank Trip Advisor for making everyone wake up and respect what guests want.  This, sometimes, wretched and unkind system has made a massive contribution towards understanding and revealing what the market wants and expects.

Anyone starting a self catering business should trawl through mountains of feedback and learn from the experience of others.  Others have suffered and learnt the hard way so you can benefit without any of the pain.

The outlook for vacation rental and holiday cottages.
If you take the index by itself, it is ‘head for the hills’.  But things are much more complicated.  There is no doubt that the market is rearranging itself but it might be well into next year before the dust begins to settle.  The March 110% figure might have been something to do with an early Easter, even so, it is evidence of volatility as was the strange booking drought for a few days in early January

Uncertainty is a major factor,  guests are thinking much harder and longer before committing.  Impressions on the pages where we advertise have not fallen in line with the index.  Our advertising spend has fallen a little over the year pay per click was down by about 20% in June.  

 This shows why we cannot help other owners who offer nothing special. Sometimes, you can see race horses cantering along the far bank of the river.  Yes, there is fishing.


We do not expect the July index results to make up for June.  At best, they may claw back to end up with and index of about 80% over the two months.  This means that stays actually taken in July are almost certainly going to be down and the pressure on stays during August will be significant.  How this month performs will dominate profitability for the year.

Autumn, Christmas and 2014 bookings, however, show real signs of promise.

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

Early June Market Report

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

Strange things have been happening.

For most of May, income to rental value of our cottages was down by about 5%.  Fortunately, the rental value of our cottages has risen by over 10% in the last year because more have joined us, so we were still ahead.

Then the sun came out and, contrary to expectations, booking frequency went sharply down.  This is the second time this year that strange booking patterns have occurred.  The first was during the second week of January and this, recent one, has been equally strange.  The photos were taken in this first decent sunshine for a year; they’re also here to brighten up what feels to be an unsettling report.

 On the way up to the hills above Worthen with the Stiperstones in the distance
Unless you take photos often, it is hard to describe the joy of decent light

The numbers of people visiting the Google pages where we advertise fell off around 40-50% over a four day period. (Impressions).   We are trying to understand what is going on.  One explanation is that, at about this time, bookings for stays more than 8 weeks ahead tend to fall off quite steeply to be replaced by shorter notice bookings.

This year, due to the appalling UK weather, confidence has hit the cottage guest market and economic uncertainty has added to a tendency to leave booking cottages until closer and closer to the dates of holidays.  It is possible that this has created a blank period between the end of 8 weeks plus bookings and the traditional shorter notice bookings.
 

   Trees have suddenly woken up

 Gorse on The Stiperstones


Others say that people really do not want to be bothered spending time in front of computers or gazing into tablets or other devices when the sun, after so many months, has at last re-appeared.

What is certain is that the first week of June has seen the second example of a new volatility in the vacation rental cottage market.  This could be a symptom of a long term change in booking patterns and, even, in the people who habitually stay in vacation rental holiday cottages.  During any change disruption takes place and it can take months or years for new patterns to settle down to create a new confidence which is somewhat lacking in the present uncertainty.

 People who think the UK has little to offer for holidays have not lived

We have had a variety of reports from independent operators, our own cottage owners and from useful sources such as www.laymyhat.com

The Lay My Hat sources are illuminating:  

http://www.laymyhat.com/forum/viewtopic.php?t=19158 
http://www.laymyhat.com/forum/viewtopic.php?t=19537
http://www.laymyhat.com/forum/viewtopic.php?t=19553

Regardless of recent up-beat reports of UK manufacturing turning the corner and other good news, these patterns are new. They clearly sign that carrying on the old way will be a recipe for failure.

 Common or garden wild flowers.  But the light could not be wasted.  Lovely.

Our Vacation Rental / Cottage booking index dropped nearly 60% for the first 7 days of June.  The maximum normal changes from one week to the next, excluding Christmas, are closer to 10-20%.  Something is going on out there.  As to what should be done… that is the 100 million dollar question.

01568 612467 for more. info@countryholidaylets.co.uk.

From Country Holiday Lets

Early June Market Report

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

Strange things have been happening.

For most of May, income to rental value of our cottages was down by about 5%.  Fortunately, the rental value of our cottages has risen by over 10 % in the last year because more have joined us, so we were still ahead.

Then the sun came out and, contrary to expectations, booking frequency went sharply down.  This is the second time this year that strange booking patterns have occurred.  The first was during the second week of January and this, recent one, has been equally strange.  The photos were taken in this first decent sunshine for a year; they’re also here to brighten up what feels to be an unsettling report.

 On the way up to the hills above Worthen with the Stiperstones in the distance
Unless you take photos often, it is hard to describe the joy of decent light

The numbers of people visiting the Google pages where we advertise fell off around 40-50% over a four day period. (Impressions).   We are trying to understand what is going on.  One explanation is that, at about this time, bookings for stays more than 8 weeks ahead tend to fall off quite steeply to be replaced by shorter notice bookings.

This year, due to the appalling UK weather, confidence has hit the cottage guest market and economic uncertainty has added to a tendency to leave booking cottages until closer and closer to the dates of holidays.  It is possible that this has created a blank period between the end of 8 weeks plus bookings and the traditional shorter notice bookings.
 

   Trees have suddenly woken up

 Gorse on The Stiperstones


Others say that people really do not want to be bothered spending time in front of computers or gazing into tablets or other devices when the sun, after so many months, has at last re-appeared.

What is certain is that the first week of June has seen the second example of a new volatility in the vacation rental cottage market.  This could be a symptom of a long term change in booking patterns and, even, in the people who habitually stay in vacation rental holiday cottages.  During any change disruption takes place and it can take months or  years for new patterns to settle down to create a new confidence which is somewhat lacking in the present uncertainty.

 People who think the UK has little to offer for holidays have not lived

We have had a variety of reports from independent operators, our own cottage owners and from useful sources such as www.laymyhat.com

The Lay My Hat sources are illuminating:  

http://www.laymyhat.com/forum/viewtopic.php?t=19158 
http://www.laymyhat.com/forum/viewtopic.php?t=19537
http://www.laymyhat.com/forum/viewtopic.php?t=19553

Regardless of recent up-beat reports of UK manufacturing turning the corner and other good news, these patterns are new. They clearly sign that carrying on the old way will be a recipe for failure.

 Common or garden wild flowers.  But the light could not be wasted.  Lovely.

Our Vacation Rental / Cottage booking index dropped nearly 60% for the first 7 days of June.  The maximum normal changes from one week to the next, excluding Christmas, are closer to 10-20%.  Something is going on out there.  As to what should be done… that is the 100 million dollar question.

01568 612467 for more. info@countryholidaylets.co.uk.

From Country Holiday Lets


Has the cottage / vacation rental market gone haywire?

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

It can be as unsettling as it is pleasing to see predictions turn out right. We are all facing a very different market conditions this year and things look like as if they have only just started.

The cliche applies, that change brings opportunities. Sticking to the old ways is no longer safe or practical and owners need to be flexible and highly responsive to prosper. Some will find things much harder than others depending on how niche demand develops.

DEMAND
Where April started off with a bang and then turned out much the same as last year for value of bookings taken, May has started off with a whimper. In the first 10 days of April, we saw twice the value of sales; in the first 10 days of May the value of sales is down by 55% compared to 2012.

But from 12-14 May there has been a sudden burst of demand for almost entirely occupy 2 rentals with a mixture of short notice and 8 weeks plus bookings. The tendency for lower occupancy cottages to heavily feature in short notice bookings was predicted and has turned out to be more than we expected. For the first time this year the occupy 6 and above rentals have lagged well behind the smaller cottages.

The road near to The Lookout. A new occupy 2 cottage close to Hay on Wye


Google impressions for our advertising pages are 24% down on last year for the same first 10 days in May. We have managed our advertising to reach the same number of paid clicks for the two periods with a small decline in total cost. (The impressions are the number of people looking at pages where we advertise. We have changed our advertising a little from last year but not sufficiently to make impression comparisons impractical).

The holiday let market in our area has become much more volatile as old patterns disappear. The occupy 4 lets are down a little but some occupy 2 two lets are taking a beating. Higher occupancy lets up to occupy 10 are, generally, doing quite well but there are one or two exceptions. We also notice that bunk beds, often a drag on business in this inland area, are being used more often.

Volatility is making predictions for the rest of the year very difficult. We still believe that short notice and last minute demand will be significantly higher due to pent up demand and a gradual return to confidence after a year of unspeakable weather. If your bookings are down in our area it is highly likely the dip is nothing to do with what you are doing and quite a bit to do with the state of demand.

A window view towards England The Lookout. A new occupy 2 cottage close to Hay on Wye

WHEN IS A SUPPLIER A CUSTOMER?
One of the really odd things about our booking business is that our suppliers (the home owners) are also our most important customers. This is a strange arrangement which seems to cut across the traditional pattern of suppliers – businesses – customers. Of course, the guests are customers from the booking perspective and we never forget that for both us and our major customers, we would be nothing without the guests. However, the relationship means that we need to treat OUR suppliers with double care combining the normal methods to ensure good quality and good value supplies with the style and approach appropriate for any major customer.

We, therefore, have the ultimate customers as the guests and the customer / suppliers as in the case of the homeowners. Some large booking services think that homeowners only need to be treated as suppliers and they sometimes let things slip, failing to treat them as very important customers.

Also, as predicted, we in the last few weeks a sudden rise in the number of owners contacting has taken place. For the last three years this time was normally quite quiet for approaches from prospective new owners to CHL, but we currently have five on the go. There are 3 low occupancy ones and 2 potentially first class occupy 8 holiday lets. One is on the bank of the River Wye in Herefordshire with startling views of the river and valley in both directions and the other is near Bishops Castle, again with views and both have the utterly essential extra of being in the hands of people who appear to be good managers and are good at listening and picking up fast.

As times get hard, we expect substantially more vacation rental cottages to appear on the market in our area. As ever, the key will be quality and good management. The recent viewings appear to bear out the impression that people are now investing more and not less as one might expect in increasingly difficult times, to give guests what they are looking for.

All this is excellent news for us where it will strike a death knell for cottage owners who have been surfing on repeat business and have failed to keep up investment in their holiday cottages. There is no doubt that this will be a very tough year for everyone. Many more will sink where others will either survive or prosper.

NEXT WEEK
Next week I shall write a bit about the pictures we take. My business partner is pressing me to use a more sophisticated camera but I am holding out still using one for the interior and another for exterior shots. There is a list of basic shots which are essential but an active imagination combined with a will to leap around the place as if still a teenager is useful, albeit, not that safe.

Modern cameras are utterly remarkable. The two I use are not three years old and have never let me down despite significant abuse. Taking the basic shots well and then intermingling them with outside or more interesting ones in an order close to the description is the trick.

01568 612467 for more. info@countryholidaylets.co.uk.

From Country Holiday Lets

March and early April Holiday Cottage Market.
For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

These observations are for an area around the borders of Wales and England including Shropshire, Herefordshire, parts of Glouster, Worcester, Powys and Monmouthshire.

After a bad start to the year, with a very odd collapse in demand in the second week followed by average demand over the following seven weeks to the end of February, things have picked up. But the recovery is a bit of a ‘Curate’s Egg’; it is ‘good in parts’.

Certain niches have not done so well, where others have kept up and some are prospering. Occupy 2 /3 is struggling but the better quality lets are keeping up. Occupy 4 is doing slightly better with the same quality affect. Occupy 6 is level pegging. Occupy 8 to 10 is looking quite strong; again the quality proviso applies.

In March, we managed to gather in about 25% more in total rents than last year. However, our income from booking fees did not rise quite so much because our policy of not charging fees to repeat guests is taking hold. We do not like the practice of expecting owners to discount rentals on our say so. This method does increase bookings but the owners take by far the largest hit where the booking agency only loses out a small sum being the commission lost on the sum discounted.

WAIVING BOOKING CHARGES
Our method, which is particularly effective for lower rental sums, gives help to the smaller occupancy cottages and at our expense. We are, of course, delighted with the extra income from generated bookings and these more than pay for the loss of income of the booking fee and less availability caused by more bookings. This is a matter of attitude.

The larger occupancy cottages are also helped, but as the booking fee is a lower proportion of the total spend, it generates less revenue when it is waived for returning guests.

Many larger booking services have absorbed the fee into the total to pay or they have simply increased the rent charged and then levy the booking fee charge to the homeowners. In the latter case, they then can advertise that they do not charge a booking fee to potential guests. In the former case the agencies advertise a total sum payable including the fee at an earlier stage.

We still use the old fashioned method of a separate fee but, now, we have included an explanation link to show how we raise income to pay for our service. We noticed what two people had said on our Feefo Feedback and, so, responded accordingly.

However, the market is the master. If this approach, which we think is more transparent, proves ineffective we will be obliged to choose one of the two options mentioned above. We feel this would be less transparent, but whatever our feelings, the market must be respected. Just as we responded to the need to explain what pet friendly meant by adding a link, so we have added a link to all cottage descriptions explaining how we raise income to pay for our service. Booking fee.

So, March was much better than expected for value of bookings taken. April, so far, has started off well. On the back of this, we have budgeted to spend a little more on Internet advertising in April. We did this in March, it was not entirely planned but we saw the bookings and ran with it, and it paid off.

It is absolutely essential for larger operations to keep a very close eye on the value of bookings taken and advertising spend. We failed to do this last August and ended up spending 30-40% too much on advertising. This was a very costly mistake and motivated us to radically improve our monitoring of advertising spend and results. This is now done on a daily basis. Recent improvements in Adwords have been very useful making it easy to graphically compare spend for selected periods of one year to another.

As to the reasons for changes in the market… this is very difficult. We have taken on several new holiday lets and they are priced realistically. There is some pent up demand caused by last year’s utterly appalling weather. When the sun comes out bookings seem to increase. In late March, the weaker low occupancy niches showed signs of life.

If we get half decent weather for the next few months, 2013 should be radically better than 2012 for holiday letting revenues. Any impact caused by the weak and frightened UK economy may be off set by changes in holiday behaviour caused by an increasingly tough economic climate.

Anyone who has settled what the market likes from their rents and who has the same quality of holiday cottage as last year should think long and hard before increasing any rates. The market is increasingly transparent and the arrival of hand held devices has increased the intensity of shopping around. With vastly better information, pictures, bookmarking and these new devices, competition has become much more open and fierce. This is good news for holiday cottages offering quality and value. For those living on repeat business and which are not quite up to scratch, it is very bad news indeed.

January was a poor month. February was lower than expected. March exceeded targets by at least 25% and April, so far, is encouraging. Mercifully, there is little sign of major impact from the very serious economic position the UK now finds itself in. The weather remains the most significant factor. Let us hope this remains the case for this year with some half decent weather to help us along the way.

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

From Country Holiday Lets

2013 is here
For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

 

In hindsight, 2012 was a bad month, the weather seriously damaged short notice bookings. What was particularly annoying was that none of our cottages were flooded out.. but the rain seemed to never stop falling. 2012 was the year from hell when it came to the weather. But it is pleasing that, for some reason, bookings held up far better than expected.

We estimate that the damage to cottage owners income in 2012 caused by the weather in our area was somewhere between 17% and 25% depending on niche served and the attractiveness of individual cottages. But the weather may have masked the impact of growing economic pressures, so this difficult time may have prepared owners well for things to come.

We are seeing owners who made vague enquiries months or years ago re-appearing indicating either that we are getting things right, or that conditions have turned and they have realised that every avenue must be taken to keep income up as much as possible. Economic pressures are beginning to be felt.

However, there are some good news stories. One of our major customers with ten lets in a medieval building near Ross on Wye had a sellout Christmas. Another owner, just north of Leominster, has developed their business to provide a good income; they modernised with en suites which was an inspired move. Combined with good management and a generous style, they are doing well. Perhaps this is because they have been farmers and grown their business over the generations so their cottage venture benefits from a similar application.

It is a real pleasure dealing with owners who care and do their best to manage well. When taking on new cottages, this is the most important feature.

Quality and good management are key and holiday let operators will prosper even if this coming economic crisis proves far worse than many predict. The cliche will continue to apply: ‘there will always be a market for good quality priced realistically and managed well.’

As for 2013

We are seeing more owners approaching us and have had to turn away some, recently, because the quality was not good enough… more so, however, because it appeared that their approach did not tie into our view of the necessity for quality and value. Yet again, astonishingly, I heard the words “that is good enough for ‘them’.” This sort of attitude upsets me and is normally the signal for a polite departure leaving things ‘up in the air’. With any luck, they will have come to a similar conclusion and feel that our approach is not for them.

Without a change in attitudes, such operations are doomed.

Technology will march on. Our experiment with Feefo will be very closely monitored. A fully automated feedback e-mail is to be sent out so that the Feefo making the system free from administrative effort.

It is still bruising and sometimes feels as if you have paid for a slap in the face when people are not so positive about your efforts to provide a good service. But this is the way things are going and pretending or putting up a false front is counter-productive. Early signs are that this experiment is going well.

A chat to a bank

Meanwhile, I found myself talking to a bank in early January for a possible long term capital loan to grow the business either later this year or early in 2014. The usual information was exchanged, cash flow projections, plans and how the business worked were all discussed. However, departing from usual practice to be very careful what you say to a bank, I blurted out that, quite frankly, we have no idea what is going to happen about this current economic crisis this year. Digging myself further into what I thought was a hole, I said that if things were to go the way some feared, we might not do so well. Immediately the words left my lips, my heart sank. Sometimes, being too frank or honest in dealings can be a serious mistake.

To my shock, instead of causing damage, it seemed to come as a relief to the bank representative. Whether this was because we were now a lost cause and so no difficult decisions were necessary, or because it was a pleasant change to deal with a potential customer showing a bit of realism, was not certain. However, it was clear that bank staff are as deeply concerned and uncertain about 2013 in a way that was last seen in the early ’70s when the Nat West nearly went under.

Meanwhile, we shall be constantly looking for new ways of doing business and improving our operation. Imagination and nerve as well as sheer hard work combined with a belief in the future are essential. Relying on historic goodwill, repeat business and doing things the same but, perhaps, only a little better will be a recipe for failure. Luck will, as ever, be important and seeing it when it comes our way will be absolutely essential.

Early January signs are good. Bookings are taking off as they should for January and February. Our adwords costs are shooting up, again, as they should. Web site visits are going up as expected and impressions on Google Pages where our ads appear are exactly as you should expect for early January. These are all good signs that the wider cottage market is still going strong. And, now, we have had two days without rain in Leominster.

2013 is going to be an uncertain and demanding year. Although I would have preferred a quieter more ‘business as usual’ outlook, I admit that the challenge is exciting. As Darwin said:

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

(Thanks to Lindisfarne, a contributor to laymyhat.com for this. See here)

From Country Holiday Lets

The holiday cottage market end 2012 and 2013
For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

 

We keep a constant eye on what rates other agencies are willing to pay on pay per click. You can get a very good idea of this with experiments on Google Ad words which is by far the most significant Internet selling and marketing system of all the search engines.

In 2012 there have been two marked changes in click value bidding in comparison to 2011. At most other times the maximum bids per click appear to have followed the previous year’s levels very closely.

The key areas of change were: from 15 July to 11 September 2012 and from 10 November to the 30 November 2012.

In the Summer of 2011 the bids per click plunged at one point to 47p; but in the summer of 2012, for the same period, the cost per click was 83p. This was an astonishing difference.

However, since 10 November the cost per click has declined from a peak of 77p to 58p and appears to be going lower.

The main drivers of the price of cost per click are the major legacy booking agencies although organisations like The National Trust do, sometimes, appear at high rankings. We tend to dominate the top ranking for our chosen geographically linked key words… at certain times of the day when we choose to up the bids.

These patterns are interesting. The decline in click bids from middle November onwards is telling. It could be related to a decline in conversions for the major booking agencies… if the cost per sale goes up, they may feel it is a good idea to cut marketing spending. It could be related to a plan to focus spending on advertising in the areas where holiday cottage density is the highest (ie. not in our area) to maximise conversion of all those clicking through. In certain cases, it could be related to finances and cash flow.

Christmas this year is not going to be as good as last year and last year was down on 2010. At one point, it was possible to charge super peak rates for the Christmas period; those days have certainly gone. Niches are behaving differently. The larger cottages are still doing reasonably well at Christmas where the lower occupancy cottages, being more or a discretionary spend, are not getting as many bookings. Contacts tell us that the moderate and poor quality cottages, especially the lower occupancy ones, are taking a severe beating.

The market is getting tough. There is no doubt about that. If the pattern of lower click bidding continues, we shall know that large booking services that sometimes are more willing to compromise on quality, are beginning to pay the price.

The telling statistic will be the cost per click in January and February 2013. These two months along, with the four weeks straddling June and July, are traditionally the peak periods for value of bookings taken as opposed to the dates of the holidays themselves. If your marketing cost per £ spent is high in these two months and you do not get that many bookings then you have a strong steer by early March as to how the rest of the year is going to turn out.

We shall, of course, be keeping a very close eye on these statistics. This year, we spent very heavily in the first two months but made the mistake of not upping our spend in the key four weeks, later in the year. Instead, we increased the spend from late June to the third week of August just when the cost per click (see above) was going through the ceiling and bookings made per click were going through the floor. This was a costly mistake.

Reflection can only give the ghost of an idea of what will come in 2013

Patterns dochange. The 2012 summer rise in cost per click took us by surprise and it cost us dear. This could be partly due to a reduction in short notice Summer bookings due to the weather from hell. It is quite likely that, this year, another surprise will come around the corner to derail our new plans. However the pattern of value of bookings taken has been quite consistent for some time indicating that failing to push the boat out on marketing at certain time could be a costly mistake.

You may say that revealing this sort of thing could be damaging. However the larger agencies take immense time, effort and expenditure to detect this sort of thing. If you take the time, and most of us have better things to do, to look at the rate schedules they set for their bandings of different niche holiday lets they do seem to match booking patterns and demand throughout the year. We, of course, take tips from this.

For instance, in 2011 it was clear that the first week and possibly the second week of June did not exhibit peak demand from the market. Sure enough, if you looked at the banding and rate schedules of cottages in certain occupancy niches, the rates per week dipped in the first and often for the second weeks of June.

Things are looking interesting for 2013. The real question is whether ‘interesting’ turns out to be ‘very challenging’ instead of different but just as buoyant. What is certain is that all owners must keep a much closer eye on the market to exploit every opportunity that comes their way. Gone are the days when you could plan advertising once a year and sit back to wait for bookings to roll in.

Brecon Villa. Occupy 10. Great for families. This is more of a dead ‘cert’. It is heated

2013 is going to be a difficult, if not tough, year. People who get it right will prosper; there is still significant life in the market. Failing to make the effort to keep up to speed could be a very costly mistake because things are going to change quite fast. I wish I knew what was going to happen because we could then do our marketing meeting, sort out the advertising and sit back to write this sort of stuff (or not) as the bookings rolled in.

For quality and value holiday cottages
01568 612467 for more.
info@countryholidaylets.co.uk.

 

 

From Country Holiday Lets

November booking doldrums and other stuff for cottage owners

For quality and value holiday cottages

The rate of taking bookings varies depending on the season and the niche market your holiday let occupies. Many cottage owners get anxious when the telephone or Internet seems to go on holiday for a week or two at this time of year. Do not panic, this is absolutely normal for UK holiday cottages; if you are taking bookings at all, you are doing well.

Inside Pheasant Cottage Occupy 4. 4 star S Shropshire

The year tends to follow a pattern:

January through to early March will see some quite serious booking activity, a small number will be short notice but the vast majority will be middle and long notice bookings for the late Spring and Summer. These two months often take more in terms of booking value for later stays than any other time of the year. Advertising on pay per click often sees two times the expenditure in the early months of a year, compared to late Autumn and the early Winter months.

The Granary, a recent new cottage with CHL. Occupy 10. N Herefordshire. 4 star

From mid March to late June, the patterns are not so regular but the rate of taking bookings and the gross value of bookings taken in each month falls steeply in mid March and, then, goes up and down, finishing higher at the end of this period. During these weeks, short notice bookings begin to take a significant share of all income from bookings taken. From Late June onwards, booking rates take off and the values of bookings taken recover to similar levels seen in January and February as short notice and middle notice bookings are now being taken for the peak season.

The three peak periods for the value of bookings taken tend to be January, February and the last two weeks of June plus the first three weeks of July. Then, contrary to what many might assume, the value of bookings taken in August falls like a stone as most people are scratching around for ‘deals’ for the peak period and are struggling because availability is rock bottom by the time they have, too late, thought to book a cottage.

A view from a window from another new cottage showing the ancient roofs. N Herefordshire.

After a dispiriting month for taking bookings, (for booking agents like us, at least) September sees the arrival of short notice bookings in earnest. The bookings become shorter and shorter in notice until the half term dates of October and, then, you are back into the booking doldrums of early and mid November with the associated panic this can cause if you are not aware of the patterns that affect bookings through out the year.

From the Third week of November, bookings recover with the majority being advance for the following year and a few extra ones mopping up availability for Christmas and the New year. One or two rather useful bookings also come in for late November and early December. These can be ‘the cherry on the cake’ as it is rare to have good occupancy from early November to the end of the second week of December.

So, don’t panic if you think things have gone quiet. If, on the other hand, things are quiet in January and February on the bookings taken front, either you have only one cottage and it’s just a statistical quirk, or you may need to reconsider your prices, marketing and website presentation.

 

 

From Country Holiday Lets

October Cottage market update and new things.

For quality and value holiday cottages

Late September / Early October has seen a fall back of about 10% on bookings per cottage. September was strong with a 20% rise in value of bookings taken per cottage.

2013 bookings taken to date, like last year, favoured larger cottages with very few occupy 3 cottages benefiting from advance bookings. The one or two exceptions are those with owners on site and who are known to be particularly hospitable and, sometimes I suspect, with touches like very generous welcome packs and other thoughtful extras.

Cottages that keep their rates competitive, offer clean simple interiors with white bedding and colour themes are proving more attractive. The demand for en suites is not abating and we think that providing one or more of these for the more popular large occupancy lets will be a good investment in the current market conditions. Guests are becoming less forgiving and the number of ‘deal breakers’ in what they see in the pictures is rising all the time. The bedding thing is on the edge of becoming a red flag.

On the economics front, factoring in the cost of advertising in September with the value of rental income secured, September was quite profitable. If you just take the formal dates of invoicing and the costs accrued in the same month, it was reasonable but not outstanding.

However, it did not trip us up as August did, where the income generated from sales efforts, to be realised in the following months, showed a very high cost of sales. That is, the cost required in advertising and other activities to secure a sale.

The distinction is critical. If you do not make it, you can end up thinking you have had a very successful month when, in fact, you have spent far too much on advertising and gained too little in bookings and booking values. August, last year, was a very bad month because we threw money at advertising without realising this distinction. August seemed to be a very profitable month but, operationally, most of its apparent profit had been secured by sales generated in previous months.

October will be better than August on this basis, but will be worse than September. This is because the last minute bookings will fall away, the weather and season has an affect and the majority of bookings taken at this time of year are for lower occupancy mid and low season low occupancy lets.

The complexity is that you we need to keep an eye on at least three sets of accounts.

1. Cash flow to make sure money is there when you need it.

2. The profit and loss for legal reasons at the end of the year and monthly for information.

3. The management accounts for each month to ensure that we spend carefully on advertising and appreciate the good months when we make a high value of aggregate sales from our spending and efforts.

In addition, of course, we have to constantly check and keep track of the homeowners’ account to ensure balances are paid, as they should be, and that we ensure all rental balance transfers are made, invoices and statements raised per arrangements. Strictly, the homeowners’ account has nothing to do with the trading account; it is a logistical service on the part of owners to collect payments and to dispense money appropriately when due.

Control of money flow, management accounting as well as financial accounting are all key to keeping a tight rein on the business. It took a little time to get this well set up and easy to run and, now, I have started to learn the other side of the business which is all about creating the web pages and dealing with the rates system.

Some of the more intricate details I shall leave for a later blog but the shock of having to turn on your mind again and start from first principles was surprising. People say that the older you get the harder it can be to learn. This is only true if you do not make the effort. In my case, it has been a bit of a struggle but I am getting there.

You can as little afford to make an error with the rates charged and implementing, sometimes, highly complex rate structures for individual owners, as you can to transfer in incorrect sum on a rental balance transfer. In many of these cases there are few cross referring ‘stops’ in the system to pull you up making attention and absolute insistence on accuracy essential.

It is a good principle to ensure that no one has unique knowledge of how things work but doing this is far more difficult than saying it. Meanwhile, the computer is playing up a little, so there is a break in proceedings which is a kind change from the normal effect created by IT problems. Instead of causing stress and upset, it has given me a short release from doggedly learning new things.

Running a simple owner based cottage operation can be more involved than many realise. When you are dealing with 70 or more of other peoples cottages, each with their own bespoke rates and requirements, real care is absolutely essential.

It is a great pleasure and does a lot for confidence to find, even though you are no longer at school and could be four or five decades on, that you can still learn and improve on things.

The key is not to become fixated or utterly convinced that one way is the right way. There are, often, many ways of getting things done. It is a common mistake to stick to one decision or approach from fear of having to learn or understand new things. Avoiding taking decisions on this basis is nearly always a mistake.

It takes some effort to learn how to take decisions in areas that are new to you but in nearly every case the effort to learn pays off. In the case of understanding how the market works and how advertising success needs better analysis, I did get there in the end… but we could have done without the costs caused by my delay getting there.

Coming back to the cottage letting market, the last few weeks are showing signs of many of the expected trends but something new is happening and this could be the first sign of major market change hinting at a radically changed economic environment coming our way.

The luxury of doing things the same way could soon be history and the need to pick up new ideas, skills and ways of doing things may become a necessity. I can’t say I am looking forward to all this but, to keep up, most of us will have to be as flexible and open to learning as we were in our 20s.

If you have any questions or observations about this or any of the other articles here, please do not hesitate to contact us through the e-mail below.

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk.

UK cottage self catering market 2012 to mid September. A warning has been sent out, but guests should do well.

From Country Holiday Lets For quality and value holiday cottages

at will not die. Each year, I search for that concerned and slightly funereal look on the mechanic’s face. A few weeks ago I wound myself up for the bad news only to be regaled with a hearty ‘I don’t know how you keep this car going so well’. But there’s never a day out on the road that I wonder when it will, finally, give up its loyal slavery to such a thoughtless and, sometimes, overly demanding owner.

Going home, today, I found one of those DVLC envelopes on the hallway mat. They had responded very quickly to my annual tax disc application. Every time these arrive, I think it an act of faith that the car will survive until the next time the government extorts £220 for running a car that can still do 50 mpg. Setting aside several thousand on the off chance the car will give up the ghost and be turned into tin cans or razor blades is increasingly onerous. Which brings me to the state of the market; in uncertain times we all want to plan as best we can.

When I park my car in such beautiful places I try to hide it as much a possible: although sound and reliable, such things should not spoil the view

SURPRISES
The year to date has held three major surprises: weather that seemed to have a vendetta against all UK holiday businesses; the extraordinarily robust nature of the cottage market, despite the deluges; and the changing nature of demand for self-catering holidays.

The weather was astonishingly bad but, contrary to what might have happened, we found that the average income per cottage year to date actually rose by 7% compared to the same period in 2011. The market appeared to hold up in the face of conditions including floods which should have utterly wrecked cottage rental income over the summer. The Olympics did not help one bit, if anything, they could well have reduced demand self catering holidays. We did not hear of one extra guest generated by the Olympics.

CHANGING DEMAND PATTERNS
Over 2012, there has been a distinct shift towards favouring higher quality cottages and niche market demand has altered. We have seen a fall off in the sound occupy 2 market in favour of the high quality 2 market but there has also been an overall reduction in the occupy 2 market. I am told that the mid to low quality occupy 2 market has seen a major fall in business. We predict that, next year, parts of this market will face wipe out. If you don’t care about quality and value, the days you can get away with such a poor attitude have ended.

The occupy 4 to occupy 8 range have seen consistent but no demand growth. However, it is more healthy in the upper quality end. As ever, the truism applies: there will always be a market for quality priced right. However, middle to poor quality is always in danger of being unsaleable at any rent.

Other patterns have radically changed. Over the last three years, there has been a markedly increasing preference for en-suites. One owner had a good occupy 8 with one en suite and two separate good quality family bathrooms. When she converted all to en-suites, (very small but well designed ones in two cases), her revenue doubled and within 15 months the entire cost of major improvements has been paid off.

September, itself, has seen an uncertain start with fits of business. Some days, we see 5 or 6 bookings come in and on other days, no bookings. The seasonal average for the first half of this month and August end is similar in proportion to cottage numbers as for last year.

We do have some cottages that appear to be doing very little business. There can be several factors, but four of the five are occupy 2. The 5th is in a strange location and could be victim to being neither in one geographical area nor another. These factors, although seemingly esoteric, can have a major influence on bookings. People like to feel that they can clearly identify the area they are visiting. Expectation is a major part of a good holiday experience.

CHANGES IN THE PAY PER CLICK ADVERTISING MARKET
Other factors are indicating major change. The pay per click bid rates did not go down to annual low levels in August as they did for the last two years, if anything, they went up to the rates you normally associate with boom months for taking high value bookings in January and February. We made a mistake and also bid high to keep up our presence. This was a mistake as the cost of sales went through the roof. The advertising cost of a sale should be between 25% and at the most, 50%. In August, we far exceeded this total. I would like to say someone else is at fault, but the over spend was entirely down to my mistake. Managing pay per click requires constant attention and must always be done on the basis of the cost of the sales generated and not on the monthly p&l. August looks an excellent month if you take the latter but it is what the advertising is doing for things to come that is important.

September normally sees a rise in cost per paid click, but it has significantly reduced in the last couple of weeks. This could indicate that the legacy agencies who tend to drive the top bids on pay per click in our area, have cut back with an increasing cost per sale. If so, this indicates that their part of the market, which includes many moderate and poor quality cottages, is suffering.

A FUTURE FOR QUALITY BUT STYLING IS IMPORTANT
The future should be good for good quality cottages styled in a modern way. Styling does not necessarily cost that much and when done right it can have a huge impact on bookings. All too often, owners are unwilling to remove their personal tastes from the business of holiday letting. I would never do the cushions on beds routine at home which is much loved by The Hotel Inspector but that sort of approach gets the business for holiday cottages.

The same practical approach should be applied throughout a holiday let. It does work however much it may clash with individual owner’s personal preferences. It is all very well saying this, but for a good cottage owner who really cares for service and it is hard to switch off when considering the premeditated cold specification of decoration, accessories and the sound cosmetic presentation of holiday cottages.

OVERALL
The year to date has been dogged by weather that appears to have wrecked what could have been at least 25% more busy. Demand for well priced quality has held up, perhaps, even increased. Owners of lower quality cottages are beginning to get a taste of what will come their way if they refuse to invest in modern quality and offer value. This year has been a warning for them.

When it comes to my battered and ancient car, it is a very different story. Next year I will, again, search the face of the mechanic to get ready for the bad news. Despite my utter lack of investment in nuts and bolts beyond keeping them safe and going, it seems to keep running as if to spite me and the sound rule that if you do not invest or care in what you are doing, you could come a cropper very quickly.

 

The UK holiday cottage market. August 2012

From Country Holiday Lets For quality and value cottages

The picture theme is spring and autumn variety in Hereford, Shropshire and bordering counties.

August turned out much as expected but advance demand is not quite a buoyant as last year.

SOME WAYS WE FOUND THINGS OUT
There are two sets of statistics that apply. 1. The actual stays and income from them that took place in August. 2. The bookings taken in August for that month and months to come.

Stokesay Castle Lodge from an unusual angle

It is important to distinguish the income from these two sets of data, especially if you are running pay per click campaigns or have changed long term advertising and wish to find out if your decision was successful.

We list bookings as they come in an number them in sequence. Against each record of booking fees, we put the commission we raise from collecting the full rental. From this, we can work out the income generated or to be generated from bookings taken in any one month.

Hundreds of miles of quiet beautiful roads like this

This information is invaluable to work out the effectiveness of advertising because the spend in any one month relates directly to the income the bookings taken generates.

Beginners often make the mistake of thinking that invoiced commissions for any one month should be set against advertising costs in that month. When we started, we made that mistake. The result was that we thought August was the more profitable than it really was. In reality, the bookings taken in August were of lower rental value than those taken in January and July because many of them related to stays in September, October and November.

Controlling and deciding on advertising plans in a business where advertising is the single highest cost is an absolutely essential skill. Getting it wrong can lead to bankruptcy for booking agents or simply snuff out any services trying to establish themselves. The need to run at least four types of accounts makes things, at times, quite complicated.

They are:

Financial Accounts for the Business

Management accounts including:
1. Cash flow
2. Notional allowance for advertising costs in the month and actual revenue generated, then and later, to establish rolling gross profit figures.

Financial control and reconciliation of the home owner’s account.

So what did we find out about August?

Early spring near Leominster where Ryland wool used to be the best in the World

A DIFFICULT BUT NOT DISAPPOINTING AUGUST
At the start of the month, we were about 30% below targets for stays in the month. Astonishingly, by the end of the month we had just exceeded invoice commission targets for stays but stay numbers were slightly down. The value of each stay had risen above targets so saving the day as higher occupancy lets proved more popular. Short notice and very short notice bookings had increased in proportion to total bookings for August stays.

However, the figures for income to come generated by bookings taken in August plus the short notice bookings were not so good. We are, therefore, hoping that the same increase in short notice bookings that applied in August will come on strong in September.

An audience. They came up to about three feet and then ran away

There is no doubt at all that the weather has severely damaged what could have been a really exceptional year. But, the astonishing thing is that, despite virtually every week suffering from deluges of rain, bookings have held up remarkably well.

We noticed a definite increase in telephone enquiries with the expected proportion of people expecting ‘deals’. However, equally, there was an increasing number of middle aged and elderly people appearing to shop around more and abandon loyalty to their habitual holiday cottages or favoured legacy booking agents. These changes have been a major source of extra bookings for Country Holiday Lets.

The Stiperstones in late Autumn… still beautiful

WHAT WE HEAR OF HOW OTHER AGENTS AND OWNERS ARE DOING
Information is patchy but one very clear pattern can be seen. Legacy quality cottages and agencies that feature them are suffering. Although repeat bookings are still strong for many old style cottages they have fallen off and, we think, will precipice in the next couple of years.

Cottages that have not modernised and remain stuck in the 1980s and ’90s are taking a beating. Agents relying on goodwill refusing to invest in keeping up with Internet competition today are already paying a heavy price.

A medieval building that would not die, near Weobley

The arrival of large listing sites over the last few years continues to eat into traditional agents’ markets, as guests transfer loyalty away to other sources of information. Now we have the recent amalgamation of Holiday Lettings and Trip Advisor which has increased the heat yet again.

Things are moving fast. The future arrived this summer for many out of date cottages and struggling booking agents. Sensing the weak position of many smaller out of date booking services, Holiday Lettings and Sykes, among others, have developed IT so the minnows can piggyback on the big services.

That they have done this is evidence of a market and evidence of the desperate position many smaller agents now find themselves in. Rather like the big insurance advertising sites seen on TV, such as Compare The Market or Money Supermarket, once on these sites, brands are watered down and are in danger of a slippery slope to oblivion.

So, August was not a good month for quite a few operations. Mid and poor quality cottages took a serious hit. Small legacy agencies, in general, now face some serious decisions that could either save them or consign them to gradual extinction.

Staunton on Arrow Church built close to a Norman castle Tump

We estimate that August bookings were down by 25% for mid quality cottages and 35% for poor quality.

THE GOOD NEWS
There is no doubt that guests are becoming more careful how they buy. Repeat visits are falling away as they search for quality which is, now, immensely more easy than ten years ago with the development of the Internet. Poor quality can no longer hide from comparisons with its competition.

Rates have not fallen for quality cottages where rampant discounting, sometimes by as much as 50%, has been applied by some legacy agencies in desperate attempts to ‘shift’ less than high quality cottage holidays.

The public is becoming more adept at using the Internet, better at using search engines, better at navigating web sites and more competent at making good holiday choices.

Part of the lost Leominster – Worcester line that would not die

As finances get tighter, so people will take more time and make more effort to get the most from their money. This will ensure demand for quality and value will hold up but it will be a death sentence for all those owners and legacy booking services that do not insist on focusing on what people want.

ENCOURAGEMENT AND A WARNING
August was a difficult month because it was clear that guests were becoming more demanding and are, now, much better informed. Service and attention to detail are absolutely essential.

The market is still confused and unfocused. The impact of the Internet has a long way to go before things settle down. On the demand side, people are still learning to live with and use the Internet and all the associated technology. On the supply side, there’s a large range of different types of services and approaches still fighting out a Darwinian battle to find out which ones will, eventually be the winners or morph into winners in the new Internet world.

August 2012 will be the first of many months before the dust settles and we shall know what the future will hold for us all.

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

 

Demand for Cottages in August and other bits

From Country Holiday Lets For quality and value cottages

AUGUST DEMAND
It can take a bit of nerve predicting what will happen; having egg on your face is something none of us relishes.

August demand for cottage holidays, in terms of bookings taken in this month and for the following months is following last year’s pattern quite closely. The expected upturn in bookings taken materialised after the third week in July when the Schools had all broken up; it is now following form, although it is slightly down on the exact pattern of last year.

NICHES
Also, as expected, demand has risen for lower occupancy cottages seeking out high quality and good rates. It is very value sensitive. As the month progresses and the top value cottages book out, so the other cottages will see a pick up in demand. We are still getting reports that moderate and bottom of the market cottages face a disastrous August.

Many owners still think they can carry on as they have for the last two or three decades. They are unwilling to accept that the market, now, has a greater choice than ever, is more transparent than ever and that it is easier than ever to book a cottage break. Old attitudes die hard, those holding them will find the cost equally hard to bear.

However, there can be some inexplicable changes in demand. We have one five star cottage that did attract several bookings last year and has seen a serious decline this year. Why this has happened is a mystery. In another case, exactly the opposite has happened.. again the reasons are quite beyond us.

CREDIT CARD SECURITY
We recently had an owner who was uncertain if newly arrived guests has paid for their holiday. They had just completed a long and difficult drive dodging flooded roads and other things, now, hopefully the last to be experienced this year and were a bit fraught on arrival. This spooked the owner a little so they wanted to check that all was well.

Late Autumn towards Bircher Common from the edge of Luston

I received the call and assured them that full payment had been made by credit card. However, to make certain, I checked the security and fraud status of the payment. The system checks, among other things, whether the address given for the card holder tallies with the registered address of the card itself. If a card is stolen these things are important. There is also an e-mail provision on the card system and if an e-mail is given this gives another indication for security. Other metrics apply.

Card payments can be clawed back in cases of fraud, so receiving money from a card transaction by itself is not absolute certainty that you have actually been paid. If a card is stolen, the typical trick is to then ask for a refund a day or so later. Under distance selling regulations, the full sum is due back depending on some other factors.

uyyuuy

The fraudster will then waltz off with the cash if you refund by bank transfer and not back to the card itself. Meanwhile, some weeks later, the card company will contact you and expect the same sum, again, because the card was stolen and the original payment was fraudulent as was the demand for a refund.

Just because a card payment has been made does not mean that the money received is secure. Card fraud has many forms and it is the job of a booking agent as well as that of the card services company to keep a very close eye and control on all card use to protect guest and cottage owners’ interests.

 

A001822529
Startling pink at Kempley with fine ancient wall paintings

Card payment systems are useful in that they remove the need to book off cottages and then wait for payment or a deposit. Owners frequently suffer from guests saying they will pay and never appearing or bothering to ring back. This can be hugely frustrating, especially if the planned stay is in peak season.

A card payment system cuts this out. However, on rare occasions, we do modify the rules but will never do so without permission of the owners. Certainty that money is picked up and that bookings are assured is one of the advantages of using a booking agent. Over the last 500 deposit or full advance payment bookings we have had only one cancellation.

I cannot say it is ever pleasant checking on payments. We have never had any credit card problems and are pleased to say that all payments have been successful and clear. This is largely down to the protections provided by Sagepay, our Card Services Company CardNet and our determination to make sure all goes well. You do need to be constantly careful because the imagination and cunning of fraudsters appears boundless and highly sophisticated.

AUGUST AND THE GENERAL OUTLOOK
August will be tolerable for holiday cottages which are well priced and are good to excellent quality. Some good value cottages are doing better than ever. September is shaping up, but it still has far to go, while October is looking quite good.

Moderate quality cottages will struggle at any price they choose to charge and low quality cottages will be toast. Many of these can be found in the early areas where cottages first developed for holiday lets such as in the Black and White Villages. When renting in these areas guests should be particularly careful although there are some outstanding ones to be found.

The Wye from Symonds Yat in S Herefordshire

Good, but not top quality cottages, will only prosper if they set realistic rates. Some are struggling because the owners refuse to either notch up the quality or accept that the market is turning against them. In effect, demand is much more price sensitive to good quality cottages than ever before.

Top quality still can command reasonable prices and benefits from good occupancy. Good quality is now open to more competition caused by over supply and more top quality supply.

DODGING EGGS
Predicting the market is always touch and go. Likewise, keeping a constant check and tight control on all money flows is a constant preoccupation. Good service is very much about care and generating confidence.

Sheep in Winter near Ludlow Castle

A strong leaning to avoid any egg coming our way should be sufficient in itself, but the need constantly provide good service to survive and prosper is not a bad secondary motivation.

We seem to be bucking the trend and are on target, despite the deluges this year, increasingly frightening economic conditions and a significantly over supplied cottage market.

 

The future for UK holiday cottages. 26 July 2012

From Country Holiday Lets For quality and value cottages

You can see more pictures and cottages here

SEARCH FOR VALUE
There has been strong brand loyalty to the legacy agencies which control over 65% of the booking market. But this is set to radially change with harder economic times on the way.
When money is scarse, people tend to spend it much more carefully and have a very low tolerance for poor value. With growing internet ability, better web sites and a wide choice old brand loyalties will evaporate.

South Herefordshire. Luxury in historic surroundings

The River Wye close to cottages and Goodrich

The quality of the cottages on many of the legacy brand booking sites is poor. Listing sites often have no quality requirements at all.

Many people have already been bitten. It is irritating having to trawl through dozens of cottages many of which are no-hopers. In addition, if you do land on one which looks okay, because there are so many others around that are substandard, there’s a much higher chance you could end up disappointed.
Growing internet transparency and search competence, coupled with mounting disillusion with the legacy booking brands is driving people to seek out the smaller booking services and the go it alone cottages.

There is no substitute for quality near Goodrich and the River Wye in Herefordshire

Everyone wants quality and value and it can be a real pleasure to find a booking service which presents a good quality range of cottages to choose from. The presentation and consistency of quality is reassuring and can, even, transform the searching from a trying chore, into a pleasure.

Of course, you should always be on your guard for those red flags which were covered in a post a few days ago. The quality of the photographs and the way the web pages are arranged should reflect the quality of the management at the booking service which will also give you a clue as to the way the booking service interacts with the owners.

An ancient building now with holiday accommodation from occupy 2/3occupy 12

SOUND HELPFUL MANAGEMENT
This is a big thing. A good relationship between booking services and owners means that they talk well together… that they listen to each other. As the basis of all good management, which will, of course mean good cottage management, is listening and getting things done, a competent presentation made by a booking service backed up by competent responses from that service is a very good sign.

Measured style and quality: luxury in ancient surroundings

We select cottages on the basis of how well they are managed. Several have been rejected not on the basis of the quality of the location or the building.. but that it appeared very likely that the owners were not up to scratch on the management front.
A holiday can be ruined in a top quality cottage by bad management as much as it is inevitably damaged if the cottage is not of sufficient quality. The future for UK holiday cottages is good for the guests and bad for about 30-40% of all the cottages now available. It is good for booking services that insist on quality and value and bad for legacy agencies and listing sites where quality cottages are drowned out by hundreds of bottom of the range offerings.

THERE ARE ALTERNATIVES
Do not keep unrealistic loyalties to big brand cottage booking and marketing services. Take time and search for rivals which sift out poor quality and major on making the search for a good holiday cottage a pleasure and not a chore.

A quality kitchen from a another converted cottage in the Wye Valley

The UK holiday cottage market. 24 July 2012

From Country Holiday Lets For quality and value cottages

You can also see more pictures: here
The Owner’s information pack is here

I went out, today, to refresh some outside photos of two sound, good value cottages. The owners followed our advice, and also had a very good idea of the market, themselves, and are now doing very well. If you click on the pictures, you can go to these cottages. The flowers are from their gardens.


THE MARKET

Meanwhile, here is some more information about developments in the market over the last few days. This sunshine will ensure August will be as busy as ever.

The summer rush booking period has started after the schools break up.It was a week later than usual, this year.Pay per click numbers have started a definite upward rise and our budgets for Adwords in July and August are double the average month’s expenditure.This pays because the number of bookings we expect to take in the next seven weeks for August onwards, if they are to follow the 2011 pattern, will be at nearly double the weekly numbers taken in May and June. In the July, August and September we take 50% of all our bookings.
There are signs that demand will recover for the occupy 2s and could be strong for August, September and October.This is partly because the larger occupation lets tend to require more planning and often book earlier.Occupy 2 is more of a discretionary spend compared to larger lets so demand for these tends to go up and down more readily responding to economic factors, the weather and confidence.The damage caused by the bad weather we estimate reduced bookings by about 20% across all cottages but the occupy 2s took the largest share of the pain with a 35-40% loss of bookings.
However, self catering did benefit, ina small way, from people who were going on camping or caravan holidays transferring to self catering accommodation.Self catering may have suffered, but camping, caravan and canal / river holidays have, in some cases, been decimated… particularly in East Anglia.The good side to this is that there is some hope of pent up demand for UK holiday breaks which could well come on strong now that the deluge of the last few months has done the decent thing and gone away.Bookings taken in the office have risen in line with the increase in web traffic and adwords clicks.
The stress some owners now face is, partly, revealed by the number of ‘invalid clicks’.This has risen quite sharply in parallel, strangely, with the recent rise in booking frequency and adwords clicks.On one day one or two people, we can tell this from web logs, thought it an idea to sit down and click repeatedly on Country Holiday Lets Adwords in the hope it will cost us for each click so they can damage and, hopefully, put us out of business.This, of course, will do nothing to increase the quality of their cottages or their own marketing.
In these situations, Google tends to give the targets of these efforts a little extra to be on the safe side which makes their efforts self defeating by, in effect, reducing our advertising bill by a small amount.However, the fact that invalid clicks have risen in a time when it should be all hands on deck in peak demand period indicates that there is a part of the cottage market that is in dire trouble. Shopping around for quality and value is essential.
The more pictures you see of a cottage the better. If you find a cottage presentation has, for some reason, failed to show a picture of the bathroom or kitchen, it is likely that either the owner has made a fundamental mistake, or that they do not want to show something that could lose them bookings. If you go ahead and book there is a risk you might be disappointed.
Some owners, who we do not work with, have suggested when we said things needed improvement that we just leave the pictures of those rooms off the web site. This is against policy and we will not operate this way. Consequently it is nearly always the sign for polite exchanges and departure without any agreement to assist.
This sunshine is going to make August as busy as ever for Cottage Bookings. Take a look at what we have still available. The flowers are from the gardens at Harmony and Serenity. Click on the picture to search our web site.

You can also see more pictures here
The Owner’s information pack is here