Disruption to the holiday let / cottage market. Since 2010

Up, down, could be better? How to get more bookings is our number one obsession. Talk shop here.
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charles cawley
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Disruption to the holiday let / cottage market. Since 2010

Post by charles cawley »

There have been some huge changes in the holiday let / cottage market since 2010 and there could be some scary stuff to come:

http://www.holidayletsforsale.com/chang ... ince-2010/

You cannot, at least, accuse this sector of being dull. What do others feel has happened over this period and what trends might dominate 2016?

I am not sure if this is the right place to post this.. forgive me if it should be elsewhere.

Meanwhile, November started off well for taking bookings and went very quiet for the last two weeks. Advance bookings for 2016 are only the same level as those for 2015 at this time last year. The patterns constantly change.
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tavi
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Post by tavi »

thank you Charles...

interesting stuff as usual.
kg1
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Post by kg1 »

Food for thought. Thank you.
HoneypotCottages
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Post by HoneypotCottages »

An interesting read Charles.

Andy
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charles cawley
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Post by charles cawley »

Thank you for your kind remarks. Oddly, for the first time ever, someone blocked @letsforsale on twitter (Holiday Lets for sale).

Despite this, we received several new followers. Someone did not appear to like our take on AirBnB. The idea that business is war, which causes US business colleges to admire Sun Tzu, appears primitive and very destructive.
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Ross Hugo
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Post by Ross Hugo »

An interesting read Charles. Did I get the feeling you're not a big fan of AirBnB? ;-)

The only thing I would add is a little hope. There are some really smart people out there who are building successful agency businesses through the imaginative use of social media, PR and search engines optimisation. Most of them do use adwords and the portals to supplement their own efforts but hardly any of them rely on them solely. Above all, they use local knowledge, outstanding customer service and niche marketing to grow these enterprises.

My experience of working with some of these agencies and seeing their growth, suggests things aren't quite as bad as you suggest. At least, I hope so!

Best, ross
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charles cawley
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Post by charles cawley »

Thanks, Ross.

We are trying to do this. Our twitter is close to 9,000 quality followers on CHL and close to 3,000 on HLFS but the Facebook stuff is not so good.

AirBnB, along with some others, are 'part service' and potentially or actually poor service agencies. There is no substitute for good service. Attitude is betrayed when words such as 'penalty' are used towards owners if they step out of line. Most still say they 'pay' owners. This betrays an attitude. Owners pay agencies and not the other way around. What really happens is a 'rental balance transfer'. An agent conducts a logistical exercise collecting money for owners; it is the owners' money.

I do believe there is a good future for full service agencies (not to be confused with managing agents) and that quality will out. What angers me is the disruption caused by the likes of AirBnB that could last for years.

Their marketing is particularly primitive; it is vulnerable to brand smearing in that it does not segment, as Wyndham does, into multiple brands. Theoretically, a nasty incident in California could cause them to lose bookings in the UK.. this illustrates the arrogance and vulnerability.

Meanwhile, the maturing of the market as it sorts out which business models are the best is disrupted by a mountain of cash in the hands of wannabe monopolist gatekeepers.

Yes. I am no fan of AirBnB because it has all the signs of a hubris damaging not only to itself but to many others.
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ianthy
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Post by ianthy »

Thanks for the report - makes interesting reading. I am not a big player with just 2 STR properties but love them or hate them Airbnb is here to stay. Single handed they have changed the STR market – we need to learn to live with it and stay included. Go back 6 years, I only needed OD and my season was filled. Now it seems you really do need to have a marketing strategy that allows you to fill as much occupancy as possible, flex prices and appeal to as many types of guests as possible.

Airbnb has one of the most flexible sites and as for their marketing – where they go others are following. Live Like a local and rent out your home while you are away, free photographer is now being banded about by HA/FK etc., I think we will see a fight between the 2 giants HA and Airbnb, at this time they appears to be 2 different types of guests but as time goes on Airbnb will close out the differences that makes folks book with HA as opposed to Airbnb.

Sadly, I think the smaller, niche players will also become casualties despite offering high levels of personal service – they will find it difficult to compete. In recent weeks OneFineStay - the higher end niche player has emailed all hosts to say biz is down by up to 50% in some locations. They are now looking at corporate biz - guess what Airbnb has been hovering up the corporate biz for the last few years and just kicked up a gear in recent months. Love them or hate them Airbnb is here to stay.
Last edited by ianthy on Fri Dec 18, 2015 11:12 am, edited 1 time in total.
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charles cawley
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Post by charles cawley »

I agree that loss making AirBnB is not going to go away quickly given the mountains of cash thrown at it.

It is not flexible in terms of being being easily able to mirror higher rates per night for different combinations of days in a week and also different seasons or short periods such as Bank Holidays.

It can be done but, in many cases, it is not easy. I have seen some owners ditch the idea that per night rates are more in demand at weekends and go straight digital. A few are already twigging, especially those who tend to get more short breaks, that this is a very costly approach.

AirBnB is a part service agency. It is doing well because every booking it gets for owners is partly subsidised by its ambition to become a dominating gatekeeper. If it achieves this ambition owners will pay for it, you can be sure.

However, as its formula is based on part service, it is vulnerable to brand smearing and its model can easily be replicated although it will cause huge damage, it will sink away. In addition it is attempting to sell to two very different markets self catering and BnB; their niches are different and people tend to buy differently. A holiday is a very different proposition to using a BnB to go to a funeral or for a couple of days as a business stop over.

Unlike Amazon that provides great added value with massive warehousing and logistics... AirBnB provides little or nothing beyond a rather nice subsidy for home owners.

Time will tell.
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