A recent report published by Unity Marketing entitled Forecast for Luxury Travel Through 2010: A Luxury Trend Report provides light at the end of the tunnel. As many of our property managers and owners know, the luxury travel sector has been one of the categories slower to recover from the most recent recession.
Data collected by Unity Marketing shows spending on luxury travel was down 22 percent for the first 3 quarters of 2009 when compared to the same period in 2008. In plain-speak, luxury travel was slower going into the recession and is slower coming out as evidenced by the continued discounting and incentives offered by marquee hospitality brands and resort areas.
The report looked at both business and leisure travel. While the majority of our partners are “leisure oriented” we at The Society understand some of our partners are intrinsically tied to the business and corporate travel markets.
Concerning the business traveler, the report mentions “More business travel will be planned on reduced budgets”:
75% of business travelers expect to spend less or the same on business travel during the next 15 months; yet will be actually increasing the pace of business travel.
Business travelers will be looking for “value” from the brands they patronize.
Increased demand for budget and business-oriented hotels and dining options.
Lower demand for luxury business hotels, dining and 1st class air.
Deluxe and luxury hotels which catered to business travel must revise their messaging to attract the luxury pleasure travel market.
Concerning leisure travel, the picture is much brighter. In general when the affluent travel for personal pleasure, they are more likely to move up-scale into lodging considered 4-5 star.
While pricing has been the buzz-word for the past few quarters, as we climb out of the recession, increasing rates will not be on the immediate horizon. Most lodging entities reacted to the recession by driving down rates increasing supply while demand has remained static. The end result, an uphill climb to rates of the years pre-recession.
What we suggest our property managers and owners do:
1) Enhanced Differences: Competitive pricing while conducive to many bookings is complex, especially when pitching a vacation home rental. In reality you will not be able to compete apples-to-apples with the Ritz-Carlton down the street. Thus, we suggest “play up your differences” such as:
Coming off the summer 2009 vacation season, there were glimmers of hope on the horizon. The term “staycation”, popular amid the depths of the economic downturn during the first quarter of 2009 seemed to slowly be eradicated from the popular press. Hotels and resorts lured clients by offering $99/night rates with value-added amenities thrown in (children eat free at Ritz-Carlton). Gas prices stabilized with a national average of $2.49/gallon a 37% decrease when compared to July 2008. Better economic news was the catalyst to spur travelers to consider at minimum a short vacation within their drive-time markets. Those opting for air travel were surprised by higher air-fares (due to reduction in capacity) and an increase in over-sold flights.
The following White Paper recognizes the changing outlook concerning vacation culture.
The acceptance of “last-minute bookings” as the new normal
Reduced rates/REVPAR (Revenue Per Available Room Night) for the foreseeable future
Increase in incentive/corporate travel as businesses exit the recession
The value orientation proposition
Even during the past two quarters of economic uncertainty, the growing popularity of vacation home rentals continues. Although supply has exceeded demand at present, future growth coupled with a diversity of supply worldwide may provide a healthy balance in the marketplace.
Last season, those looking for cost savings eliminated private and class lessons. While many consider lessons a splurge, we at The Society consider it a perk of the vacation. Note, if you have a family or group of friends, most private instructors can take up to 6 participants: a great way to spend the day and it’s cost effective. Whether class or private, instruction offers the following advantages:
Skip the Lift Line: how enjoyable during prime vacation periods.
Increase Skill Set: When you ski/board techniques improve, makes the vacation more enjoyable.
Hidden Trails: A good instructor knows the mountain and will also know where the best snow conditions are.
A New Challenge: Break the bad habits (like me, not bending in the knees) and challenge yourself to exceed status quo abilities.
Aspen & Snowmass: The resorts of Glamour Gulch have been most proactive in their marketing department. Look for discounted lift passes, rental equipment and a $50 voucher for those who purchase 5 days of private instruction.
Copper Mountain’s new “Discover Private” program allows skiers who don’t want to spend $475 for a full-day private lesson to pay $150 for two hours of private instruction.
Winter Park is offering four half-day group lessons for $99 if purchased in advance.
Vail Resorts is offering small-group “Adventure Sessions,” with loosely structured lessons and lift line-cutting privileges for $119 to $129 per skier.
We at TheSociety.com would be remiss if we were not to advise the value and protection offered by reputable property and estate management companies. However, we also understand the attraction of the “do it yourself” and the many factors which influence one’s decision to “go it alone” or hire professional assistance. Thus, we share below some tips from the pros for those who wish to “go it alone”.
One of the most important aspects of the rental process, literally a contract between you and the renter of your vacation residence. While some agreements are voluminous and others are limited in length, we suggest a middle ground to 1) protect your home and valuables and 2) not intimidate your renter.
Work out the terms of the rental verbally with the renter until you come to an agreement that is acceptable to both parties.
Fax of e-mail the written agreement containing everything discussed. If using e-mail we suggest creating a PDF to protect the integrity of the document.
Give the renter two - seven days to return the signed agreement and the deposit for the rental. The time frame for hold should be based on demand and season.
Hold the renter’s dates for the period advised after you have faxed or e-mailed the agreement to the renter. The rental is not yet confirmed, but you should not make any other lease agreement for that time frame during the “HOLD” period. If another renter is interested in those dates during the “HOLD” period, let the renter know that you have a hold for a potential renter for those dates, but you will contact them on [a specific date] if your property is available or that you are willing to take a back-up reservation with the provision that it is a back-up and not enforceable until an actual agreement has been executed by both parties.
If you receive a signed agreement and funds, the reservation is confirmed and subject to the cancellation policy spelled out in the agreement. If you do not receive the agreement within the “HOLD” period, feel free to take other rentals.
TheSociety.com is well respected for their “white papers” concerning the many challenges in today’s marketplace concerning the marketing, promotion and recognition of luxury vacation rental homes and resorts. While many entities have embraced the “discounting mantra”, we do not agree with this.
According to Michael McFadden, Co-Founder of TheSociety.com: “The pie {supply} has gotten bigger yet demand remains stagnant i.e. vacationers are on a diet. Once an entity embraces the discounting manta, two issues arise, a potential loss of prestige and the inability to raise rates when demand returns.”
Our newest White Paper “Do Not Let Your Winter Bookings Hibernate” offers an overview of the present marketplace, future forecasts and most importantly 12 marketing ideas to increase your REVPAR and procure a loyal clientele.
Please e-mail us with your contact information at info@thesociety.com if you would like to be notified when the white paper is released. Please place “white paper” in RE line.
Whether you are working with The Society, consulting an owner listing on VRBO or answering an advertisement on Craigslist, here are a few tips post-reservation to make your vacation home rental experience worry-free:
Estimated Time of Arrival: Be sure to advise your host i.e. owner, manager, managing agent the approximate time of your arrival. Your host will be most appreciative knowing what time to turn over the home. Even if you may be arriving early morning (not uncommon in Europe from North America), request an early check-in if available. Many estate agents will allow an early check-in gratis versus many hotels which will require the prior evening be booked. Same with late arrival as prior notification will allow the agent to have lights on when you arrive and as many of our managing agents have been known to provide, a welcoming meal service from a local chef.
Estimated Time of Departure: Yes, it’s not something you wish to think about. A client in the Hamptons mentioned a 5:00PM airline departure from the NYC area and based on Mapquest, advised the managing agent they would leave the residence at 1:30PM for the 2-hour drive and be at the airport with 1.5 hours to spare. The managing agent correctly advised they should depart at Noon due to the heavy westbound traffic from Eastern Long Island to New York City. The managing agent’s advice saved the family from 1) missing their flight, 2) being stranded overnight in Queens, New York and 3) provided sanity and the option for the family to stop en-route for an excellent “clam-roll” on the Montauk Highway.
Special Needs: We recently worked with a client who mentioned they were traveling with a family member with special needs and they were concerned about the open access to the pool area with the home they had chosen. We were able to discuss the issue with the estate manager who suggested a similar home with a pool which was gated and could be secured to prevent unsupervised access. The client was thrilled and we were glad we were able to facilitate the client and their vacation needs.
Note: Not every vacation home is correct for every client. While property/estate managers should be asking questions, many do not. We suggest, as clients and travel agents, that you take the initiative and open the discussion; it is your vacation, make it the most enjoyable it can be.
Even though our summer vacation season is just winding down, we have been surprised and pleased with the up-tick in inquiries for the Thanksgiving and December holiday season. A few tips we have been sharing with our clients:
Thanksgiving Flights: If at all possible, no matter the destination, consider flying out Tuesday night or first flight Wednesday morning. By midday Wednesday, airports are congested and if a flight is delayed, you may not be traveling until Thanksgiving Day.
Flying on Thanksgiving Day: For a bargain, consider flying on Turkey Day. While morning flights may be slightly more expensive, later in the day flights are less in-demand and well priced. Yes, your traditional Thanksgiving meal in flight may be a turkey sandwich, with the money saved, consider taking the family out to a fine meal when you arrive.
Avoid the Sunday Return: Consider flying back on Saturday morning or extending your trip to Monday. Sunday, like the Wednesday prior is always a busy day for flights and airport operations. Coupled with questionable weather at various departure points, you may be delayed until Monday anyway, so consider staying over Sunday night and beat the crowds and travel in comfort on Monday.
Off The Beaten Path: Consider a getaway to Europe. Yes, it is a long flight, however, Thanksgiving in Europe is quite enjoyable, reasonable flights (consider leaving Wednesday evening, you arrive in Europe Thursday morning, a non-holiday). You can spend three nights in Europe and return on Sunday. We suggest a “city-escape” i.e. within close proximity of a major airport and non-stop flights if possible. From one of our clients personally, one of my most memorable Thanksgiving Dinners, Reindeer at the Marriott in Copenhagen, Denmark.
Early Season Skiing: Most resorts in the Rocky Mountain West are open by the Thanksgiving holiday. While we cannot guarantee all runs will be open, between the attractive rates and restaurant specials, a ski resort long-weekend getaway is a viable option. BTW: From the East Coast, you can leave on Thanksgiving morning and fly non-stop to Colorado and Utah and be on the slopes by late lunch. Ask us at TheSociety.com about options.
I always advise clients to make multiple copies of their passport (the identification page including picture) prior to travel. I advise leave one to two copies at home with a family member or friend who you can easily contact and take two copies with you when you travel. Why?
1) Lost, Stolen, Misplaced: Let’s assume you loose, misplace or have your passport stolen. If you have copies while you are traveling you can go to an American embassy or consulate and have a replacement passport issued. The copy including picture and number will assist in the process. If your family or friend at home has copies, they can be faxed/scanned to you or a new passport can be issued in the United States.
2) At Hotels: It is not uncommon for a hotel to request to hold your passport overnight. This is for a security check. While it is unlikely the hotel will misplace your passport, having copies in your possession is just smart, just in case of a mishap.
3) Carrying Copies: When traveling I always suggest keeping your passport in an in-room safe or similar. Do NOT carry your passport i.e. pickpocket, dropped out and so forth. A copy should suffice for most common identification needs. Please note, some currency exchange operators will require your physical passport
In our June 16th issue, we mentioned “The Top 10 Tips to Survive The Summer” would be posted soon. We apologize for the delay. Our “tips” have expanded to 16 and the blog posting has become a “white paper”. We are proud to offer the following for your review, please click on the link for the posting: Salvage the Summer Season and Beyond
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Last season, those looking for cost savings eliminated private and class lessons. While many consider lessons a splurge, we at 
We at 
One of the most important aspects of the rental process, literally a contract between you and the renter of your vacation residence. While some agreements are voluminous and others are limited in length, we suggest a middle ground to 1) protect your home and valuables and 2) not intimidate your renter.
I always advise clients to make multiple copies of their passport (the identification page including picture) prior to travel. I advise leave one to two copies at home with a family member or friend who you can easily contact and take two copies with you when you travel. Why?