In previous articles I established
that there was a real estate bubble that was already imploding,
combined with a self-catering tourism crisis cause by massive over-supply.
Although the actual numbers of tourists has increased significantly they
now come to Spain in smaller groups for shorter periods.
The hypothetical demand for each property available has fallen from 21
weeks to under 5 per year.
Renting property owners
with modern or updated properties in popular resorts will be
least affected but the "golden" years for property rentals
are long gone and the self-catering sector is unlike to ever
recover its former strength.
Optimising your Rental Income.
Useful advice for property owners who intend to make
the best of it -
If you rent directly
– Remember that it is now a buyers market and clients will be shopping
around for the best value.
Also remember that there will be unoccupied properties during most seasons
including August - Off-season weeks will make a great difference to your
Clients will be looking for spacious, newly-built or
recently modernised properties with vital items such as modern
furnishings, central heating, air cond., washing machines, modern fitted kitchens
Other items, such as a dish-washers, security alarms, secure walls and
gates, 100% private pool and/or sunbathing areas, heated pools etc. will
make a difference to your overall return.
If your property is old, has sparse mod.cons. and you have a tight budget
- then do not try to improve it by halves! It is better to make the rentals
really cheap or let long-term.
- Early bookings are all important and you might have to sell some weeks at last
moment discounted prices.
Set a fair price for your villa by researching similar properties in the
Advertise this as the price and show a discount for early-bookings (say
20% before 31st January. Don’t even suggest last-moment reductions at this stage and always
state the date that the early-booking offer ends.
As soon as this period ends then try to sell at the full price.
When you get to 6 weeks before, start your last-moment discounting (20% – 60%).
back on these just because the market is depressed could be a false
economy. Receiving a key through the post is
considered by some as the worst aspect of self-catering and this is no
longer necessary. There are agencies everywhere who will hand over keys
and maps or provide key safes for an annual rental.
If you use local “clandestine” services you should find that, from now on,
local agencies are not that much more expensive and
provide a tax
Additionally, many of them provide “Joint Venture” rental contracts – so
you could have your cake and eat it as well!
– The cost-effectiveness of magazine advertising
is loosing ground in favour of Internet advertising sites but even this medium is not
as effective as it was.
Beware of the sites that offer a really cheap
yearly ad. rate and/or commission.
Don't take notice of their popularity claims. Check it out
yourself by typing into a search engine the keywords
commonly used by searchers e.g. “villa holidays” combined with the resort
Their ad should appear on the first page,
best the first 5 results. If you cannot find them easily then your clients won’t
Don't take too much notice of sponsored listings e.g. "Ads
by Google". This means
they pay for clicks and it is not so effective as generic results. They
could stop at any time and so will your enquiries.
Click through to their home page and check their Google
Rank. For a localised site 2 or 3 is the best that they will
get. If they don’t have a Google Ranking or if it is low
then it means that they pay little attention to page
optimisation and or that it is a new site and, as soon
as they stop paying for clicks, they will disappear altogether.
If you need a Google Toolbar to search or see the rankings then
It is not even as simple as that these days,
with so many owners using these services. The top sites have
100's of 1,000's of ads. for your area.
Yours could be buried somewhere way
down the list.
The best solution is to have several sources
Good Ad. Presentation is Vital! You
know your property intimately but does your description
properly and fully describe it?
Potential clients just have the text you provide and a few
you are not good a photography then employ a professional.
Most photos need careful optimising for the Internet.
Hang onto Your Clients! - Do your best
to ensure that they enjoy their holiday and encourage them
to come back. E-mail them regularly - after they arrive
back, in January (with an early booking discount offer),
twice more if they don't rebook and then with your last moment
Always Remember: The very best clients don't complain
- they just find another supplier!
Plan your Campaign! - Don't put all
your eggs in one basket! A typical good plan -
Advertise on at least TWO Internet sites
after careful research for the best for your area.
advertise in your local paper for (say) 4 weeks of the
prime booking period.
a good rental agency in your area that provides services
plus a "Joint Venture" rental plan.
This is quite important so that you
stay on the right side of the authorities.
Absurd to pay all this for advertising plus
commission when the agency makes a booking?
Not at all, just sound economics! The advertising and
commission is all
paid for by just 2 weeks extra booking.
Don't neglect "foreign" markets! - The UK still only
accounts for 40% of visitors to Spain. You will find strong
competition here as the Internet is absolutely saturated
with English-language advertising sites.
The Spanish market (for example) is developing strongly now
that incomes have improved and rental prices have fallen.
Most Spanish, French and German Internet browsers have their
PC set to show pages in these languages - so they probably
won't find you!
Here is the main advantage of also booking through an agency
or tour operator. Most of them have already realised that
there is little point in advertising to less than half of
the market and have pages in at least 4 languages.
If you rent exclusively via an agency, villa rental company or tour operator –
If you have been with
them for a while and they have looked after you and your property then
your are extremely lucky and probably have a better than average
They are all reducing their
portfolios in order to favour smaller programmes of higher quality
properties - for which there is still a healthy market.
The final article in the
How the Spanish authorities could react to the
tourism crisis. Why owners who
rent should take great care about there situation with the
© Mike King July 2007