2020: The year best forgotten… or not!

Reflection is one of the greatest abilities of mankind, especially after a year like 2020 where everything went pear shaped in a matter of weeks. All the best laid plans for literally every person in the world took a tumble and many of us were like the proverbial deer caught in bright headlights. Daily livelihoods were suddenly threatened in a way most of us could never have imagined – and what lay ahead was the great unknown.

Looking back on my monthly ramblings from earlier in the year, it becomes apparent that we have endured a tsunami of unimaginable proportions in a region that is so reliant on tourism for survival. Nothing could have prepared us for what transpired and from April until October, each and every one of us involved in the tourism industry, directly or indirectly, experienced waves of bewildered emotions, frustration, concern and panic, as we watched our incomes waning in an alarming way.

We have seen shifts in the property market the likes of which may never be experienced by other generations in their lifetime. Every aspect of the market, whether short-term or long-term, residential or commercial rentals, sales, builds and renovations… you name it, it took a beating. Nightly and monthly rental rates took a complete dive and whilst this had a huge impact on many hosts’ ability to survive from month to month, it was a cleansing process which served many purposes.

Whilst recovering from this will take time and has left numerous casualties along the way, nothing can beat the survival instinct of people who have a will to succeed against all odds. The creativity displayed by local holiday rental hosts has been astounding, to say the least. Many people have used the forced ‘downtime’ to update their accommodations, rebrand their listings, refresh their linens, clear out their clutter. And in doing so, they have given themselves a clearer view of the world around them.

People’s motivations have changed and creative ideas have been put into action. The next round of tourists will experience a reignited eagerness in their hosts, all excited at the prospect of getting back to being the passionate hosts they are, welcoming guests who are longing to get away from their own stressful lives and to relax and unwind.

One development emanating from this year’s madness has been a sifting out of many of the below-par accommodation offerings. Some of these existed as an afterthought rather than as a strategic intent to provide a quality experience to tourists. The net result is that serious hosts who have embraced the tourism industry and act as knowledgeable and experienced guides to guests have survived the year. And so they should.

The true value of tourists has suddenly become important again and this is one of those positive aspects that comes out of a year like this. We all know how we react when something we have had for years is suddenly taken away from us and through that, we learn to appreciate everything so much more, and with a different level of understanding. Whilst there will always be the opportunists in all walks of life, a shake-up like 2020 forces us all to reassess what is important and what is not.

From discussions with many local hosts, it seems that bookings for the holiday season are at a very high level and while we might not see that many international tourists, it sure does look as though South Africans are planning on enjoying and supporting local. The fact that larger houses sleeping between 8 and 12 guests have had to reduce their rates quite dramatically has not deterred owner hosts from accepting the bookings. There is a general acceptance that “it is what it is” and better to be back in the swing of things than to be moping about lost rentals because of the market squeeze.

We are all hoping for a year-end that catapults the memories of 2020 into oblivion and sets the scene for a year of economic recovery, social reintegration and a bright light to head towards as we adjust our way of living for as long as may be necessary. As my last chirp for the year, I wish all The Village NEWS readers a spectacular festive season and extend CabinCare’s best wishes for a relaxing and inspiring start to 2021.

Brace yourselves – the tourists are on their way

The sunny days have finally arrived and holiday rental hosts are like bees in a hive readying themselves for action – sprucing up accommodations and amenities in the hope that they will capitalise on the wave of tourists expected in the coming months. It’s been a long time since we’ve seen so much action – and so many rubble skips on the sidewalks of Hermanus!

The biggest and most unexpected surprise is that whilst some of us were still dreaming of welcoming international tourists, our dreams have actually come true with President Ramaphosa’s announcement that all international travel restrictions have been lifted. As long as the countries from which tourists travel allow them out, and they arrive with a negative Covid-19 test result not older than 72 hours from the time of departure, this season could well play out very differently than anticipated.

It remains to be seen what adjustments will be made to nightly rates in the next few weeks. Up until last week we saw many of the high and mid-end establishments left with no choice but to drop their rates in order to get a piece of the 2020 season’s holiday rentals pie. Some hosts had even chosen to delist for the season as their target market is way above the means of most travelling South Africans and enquiry levels had plummeted when compared to the same period in 2019. Now, with the prospect of many international travellers changing their plans, we could be in for a season of note.

South Africa, and in particular the Western Cape, is still one of the most sought-after destinations and with the current state of the pandemic globally, it will be a gem of a destination for those seeking plenty of outdoor spaces, of which the Overstrand has an abundance.

Many of the local market’s holiday rental properties had been moved to long-term rentals over the past few months and whilst there are many available, we will no doubt see a shift back to some of them being listed again for holiday rentals this season. It doesn’t alter the fact that either way, there will be an oversupply of both types of accommodation.

Only two weeks ago Grant Smee, property entrepreneur and managing director of Only Realty, said that even though lockdown is largely over and some international tourists are permitted, he did not see many of these units returning to the short-term market in the near future.

“This is owing to a number of factors, including uncertainty about the reintroduction of higher lockdown levels (which we now know is not happening in the foreseeable future), commitment to long-term lease agreements (generally six to 12 months) and the restrictive rules around international tourists that will probably limit their influx and keep demand low.”

Whilst the latter is about to change, the good news for those property owners who are in the short-term market, though, is that domestic travel levels will certainly increase and provide opportunity for short-term lets over the festive season.

According to Smee, “I do foresee demand increasing for the more affordable short-term properties. However, luxury short-term letting will see limited demand and be coupled with the need to discount their normal rates.”

As mentioned in previous articles, owners who are looking to take advantage of any demand that will return to the short-term letting market will need to make certain their property provides excellent value and a unique offering, with the location, price, quality and overall experience ensuring that it stands out from competing units.

“Without this additional input and effort, short-term letting may not meet the owners’ financial needs and this could mean that the certainty and security of a long-term let, although providing lower income, may be a better option,” said Smee.

Scanning the news articles across the country shows that quite a number of short-term holiday accommodation and Airbnb units along the KZN South Coast have been converted to longer-term rental over the past six months. It is unlikely that those who currently have long-term tenants in place will be able to convert them back to holiday units for the forthcoming season, as most will have at least a 12-month lease in place.

Now the only thing we need to focus on is getting our houses in order, preparing for a better season than anticipated and continuing to spread the word of what an incredible destination and holiday experiences we have to offer in the Overberg. It’s been a long, dark and unstable time for us all, but we have come through it and there is a spring in the step of many who never thought this year-end period would provide something to look forward to – which it now does.

Changing trends in holiday rentals

As increased numbers of holiday rental hosts feel the momentum pick up, so the spirits of those involved are soaring at the prospect of a return to a semblance of normality. There are reports of increasing enquiries for year-end accommodation and hosts are anticipating a reasonable influx of South African visitors.

With few international travellers expected, heightened competition is developing in this market and many hosts are doing their utmost to spruce up their accommodation offerings in order to compete in what, this year, will be an over-flooded market. This leaves holidaymakers with a wide choice, especially as there are no clear guidelines on nightly rates.

Research on Airbnbs in the Overstrand shows that, for example, quality accommodation for a six- sleeper can range from R1 800 per night to R3 500 per night. Whilst normally one would be able to ascribe this discrepancy to the difference in quality of the amenities, appliances, décor and finishes, this year very similar properties offering the same amenities are on the market at vastly different rates.

The nightly rates for 10-sleeper properties range from around R3 500 to R12 500, with a few notable exceptions – for which most South Africans would have little appetite – at up to R24 000 per night.

A new trend, which is very much a sign of the times, is for people to list their properties directly on Facebook, Gumtree, or any other website that is not a formal booking platform, like Airbnb, Booking.com and the rest. Whilst this is an alternative means of sourcing guests, there are some red flags for travellers to consider. The main reason people avoid portals like Airbnb is due to the fees they charge both guests and hosts, but with that comes a level of security and protection otherwise not guaranteed.

Most of us are aware of the recent debacle in Camps Bay, Cape Town, where a group known as ‘activists’ booked an Airbnb for a weekend under false pretences and then stayed on as squatters to highlight housing and land issues. From a legal perspective, this was undertaken in a deceitful manner and with criminal intent, as stated by the owner’s attorneys, and the end result was that the case went to court and the culprits were forced to vacate or face eviction.

The point here is that anyone offering holiday accommodation directly to guests has no protection whatsoever should a similar situation occur. Unless the guests are known personally to the owners, or family or friends who can vouch for them, you are opening yourself up to all kinds of risks if something goes wrong. One of the key advantages of listing on a recognised platform is that there are strict vetting procedures for hosts and guests, and various forms of protection are in place.

If letting directly, owners need to introduce some system of guest validation and verification, and should consider implementing strict checks to protect themselves and their properties. They should have an appropriate rental agreement and consider additional checks on prospective guests’ financial liquidity, or possibly require larger deposits. Having no rental agreement in place is highly risky and could result in untold legal complications, should things go wrong.

In the Camps Bay incident, the owner could immediately call on back-up and assistance from Airbnb in support of their stance against the guests. Many Airbnb hosts were panicked by these unexpected events and Airbnb responded appropriately with the following message:

“We want to reassure you that protecting Airbnb’s host community is of key importance to us. We are keeping an open line of communication with the host and are reviewing all reasonable options, as overstays go against our terms of service.

“At Airbnb we are continuously working on ways to make our community as secure as possible for everyone. That’s why, before booking, guests are verified by asking for their government ID, legal name and address, and Airbnb only charges for reservations at the point of booking.

“In addition to these deterrents Airbnb also provides hosts with the security of a Host Guarantee which provides protection for up to $1 million for guest damages to properties.”

Whilst many hosts are trying to minimise their expenses and achieve the highest possible income, renting directly to guests can bring about huge challenges and it’s that protection that one pays for when listing on a recognised website. That said, there is no doubt that the ‘new normal’ will bring a change to many of the traditional ways of going about holiday lets and hopefully the result will be a positive one that benefits all parties.

Gearing up for an uptick in visitors

Within days of writing last month’s column on the shifting of the holiday rental market, the country went to Level 2 of lockdown, and Airbnb and holiday rental hosts were delighted to hear that it was all systems go and they could all reopen for “business as usual”.

Many hosts reported increased enquiries for weekend bookings and many have been made for the upcoming Heritage Day long weekend later this month. Some of the better-known and established guesthouses/Airbnbs/hotels are also reporting a distinct uptick in December bookings. The energy and excitement is palpable and there is a huge sense of relief amongst the majority of tourist-oriented hosts.

This follows two years of steady decline in the demand for rentals, not only due to the Covid-19 pandemic but also other key factors such as the Cape Town drought and the 2018 riots in Hermanus. With an oversupply of accommodation and lower tourist numbers, many Airbnb property owners were forced to enter the long-term rental market, and this trend is not only gaining momentum but also driving down the nightly and monthly rental rates.

Clearly this season is going to be a highly competitive one when it comes to available accommodation options. Tourists are going to be so spoilt for choice and many hosts have asked me how they can capitalise on this dynamic. With the strong possibility that international borders may even open before next year, quality accommodation at the right price point is going to be key.

My advice to all hosts is to spend some time on the relevant portals (Airbnb, Booking.Com, Afristay, Lekkeslaap etc.) and see what is offered and at what rates. Look at the quality of décor, amenities, location, home comforts and special offers and check against your own to see if you are realistic about the rate you are offering. Some owners are showing increased reluctance to take anything less than what they did in December 2019, yet they wonder why there are no enquiries like before.

Tourists are aware that there are good deals to be had and from personal experience I can see they are applying more due diligence, spending more time researching quality/price options and being cautious in ensuring that they take advantage of the great deals available. Overzealous hosts who do not adjust their rates accordingly may well find that they lose out on a good flow of bookings and the downward pressure on all rental rates, be they long term or short term, mustn’t be ignored.

If international borders do open before the end of 2020, there will undoubtedly be an influx of overseas visitors and they will get the pick of the pile, with the exchange rate being in their favour. Whilst this bodes well for many establishments, hosts have to remain smart and flexible with their rates in order to ensure that they don’t lose out.

Another visible trend emerging is that of homeowners whose properties are not appropriately appointed for holiday rentals, yet this year they are listing them in the hope that they can make a quick buck in the process. Whilst one cannot criticise the intent in tough times like these, guests need to be very diligent when making their bookings to ensure that what they see is what they get.

Another tip for those searching for holiday accommodation is to look at the reviews and history of bookings that the desired property has. If you are considering a new listing with no reviews and want to be sure that you aren’t going to end up with a horror house, try and get someone to view the accommodation for you or ask for video clips. Photographs are very deceiving and you can end up with a holiday experience that you’d rather forget you ever had.

Whichever way we look at it, there are going to be disappointed and disillusioned hosts who are not adequately geared up for holiday rentals and whose expectations of rental income are unrealistic. The oversupply is increasing and those who have got it “right” in terms of the overall accommodation offering and comforts offered are going to win hands down.

Exciting times in reigniting the spirit of our town are ahead and with great anticipation for a renewed awakening in the Overberg, we have so much to look forward to and to be grateful for.

Holiday rentals – is the market shifting?

The Women’s Day long weekend was an inspiration to all in the Overberg and spirits are soaring amongst management and staff of hotels, guesthouses and all graded or accredited establishments. Whilst the traditional Airbnb host still fails to comprehend the stance of the Tourism Minister, and rightly so, that has not stopped people from accepting bookings and welcoming guests, albeit at a distance.

It is clear that the majority of citizens have reached the peak of their frustration with the regulations and, with a sense of camaraderie and mutual respect, all hosts are going out of their way to get back to business and provide accommodations while implementing the strictest of cleaning protocols.

The formal establishments are obviously not complaining and kudos to them for all they do to make the tourist experience a memorable one. The wide range of self-catering accommodations listed on the online portals like Airbnb, Booking.com and the rest are all starting to gear up in the hope that there will be a surge in intra-provincial travel like we saw over the Women’s Day weekend.

A lot has been written about the cleaning protocols for self-catering accommodations and Airbnb is one of the companies that has released detailed instructions on the process to follow. Many people glibly think it is a ‘no-brainer’ but when one looks into the detail of what needs to be done, then the realisation hits that it takes time and thoroughness to ensure that accommodations are Covid-19 ready.

As part of the preparation for this new era of hosting, people need to ensure that their listings reflect the status of their compliance to hygiene regulations, as this is something which guests are now concerned about with most booking enquiries. Whilst the guidelines set out an endless string of the obvious, it is worthwhile for all hosts to familiarise themselves with these.

The question has been asked a number of times as to what the Hermanus holiday rental playing field will look like moving forward. Prior to the arrival of the Coronavirus, there was already an oversupply of holiday rentals as a result of the 2018 riots, compounded by the ever-increasing stranglehold on the economy of the country that we have become familiar with. We saw many new listings appear across all the portals but more and more the nightly rates were being driven down as holidaymakers found themselves spoilt for choice.

A quick research exercise on Property24 gives one an eye-opening picture of what has changed in the past number of months. There are a lot more properties listed for long-term rentals, many of which were traditionally holiday rentals. There is also a phenomenal number of properties for sale and some suburbs are showing a higher number of listings than six months ago.

These are all signs of the overall impact of both the economic crunch and the Coronavirus fall-out which has changed the face of the rental and sales market for the foreseeable future.

The interesting dynamic is that in both the long-term rental and sales markets, pricing hasn’t necessarily seen the decline one might have expected. Of the 171 rental listings across the broader Hermanus area, 62% are in the R 10 000 to R 20 000 per month rental bracket. Only 3% (five properties) fall below R 10 000 per month. If one then breaks this down further by suburb, the trend is very much the same.

Another interesting point to note is that there are over 800 listings of properties for sale in the area, from Arabella to Voëlklip. Sandbaai leads the pack with almost 180, followed by Westclliff with 153. The listings in Onrus (114), Vermont (103) & Voëlklip (102) also show that price flexibility does not appear to be the order of the day and, according to most of the local agents, only correctly priced properties are selling quickly.

The one factor that is clearly evident is that many people can, for a multitude of reasons, no longer hold onto their second properties and are not getting the expected return on investment from those that were purchased as income-generating holiday homes. The uncertainty of how long it will take to rebuild a revenue stream from these properties has also taken its toll on the desirability of owning a holiday home.

So the future remains a mystery, for now. Market dynamics change by the week and we can only continue to find ways to spread the word about what a perfect holiday destination the Overberg is – and to attract the South African public to our shores whilst waiting for the international borders to reopen.

The good news is that many of our fellow countrymen who have not been here before will realise what they have been missing and that will hopefully have an impact on rebuilding the local economy.

Holiday rentals – where to from here?

Holiday rental hosts around the country are eagerly awaiting clarity on the state of confusion that exists in this market.

The government’s amended Lockdown level 3 restrictions stated that all hotels and establishments – except accommodation establishments not formally accredited and licensed, such as private homes for paid leisure accommodation – were allowed to open if they are providing accommodation for people travelling for the purpose of business permitted under Level 3, for international tourists who remain in South Africa, or if appointed as quarantine facilities. Therefore, no accommodation establishments are allowed to open for leisure purposes.

The point of contention seems to be the reference to “home sharing” which, whilst it was the initial focus of Airbnb when it first started, is certainly no longer the case. Airbnb has become a lot more diverse than that; yet it appears as if our government still does not have a clear understanding of what the likes of Airbnb are all about. According to Wikipedia, Airbnb offers “arrangement for lodging, primarily homestays, or tourism experiences”.

The question is: Are these regulations a subtle means to focus on the formal, graded and licensed establishments at the expense of all holiday rental hosts? In times like these, when having a family on their own in one place might be safer than trying to practise social distancing in a hotel, it seems as if the ministry and those opposed to the Airbnb industry are using this to their advantage and trying to justify why it shouldn’t continue to exist.

The official response from the Airbnb SA team is that the regulations sound confusing and that they have reached out to the ministry to provide some clarification. “If we take the grim view of what we are seeing then it’s possible that the government is asking the majority of Airbnb hosts not to host and we think that’s unfair. How can a hotel open and not a self-catering accommodation option, for example? From a health perspective that’s difficult to explain.”

On Thursday 9 July Airbnb’s SA representatives had a meeting with the representative from the Department of Tourism and the only feedback we have received at the time of writing is that there is “no change” to the regulations as currently stated. The only positive aspect is that Airbnb were not asked to shut down the booking platform, as happened in the UK over Easter and in Hawaii, amongst others. So listings remain bookable but only for business and not leisure travellers.

One cannot but wonder how much of this is also driven by the ongoing issues that graded establishments and hotels have with the entire Airbnb, booking.com and the rest of the online booking portals.

Social media is awash with comments for, and against, the existence of “ungraded or home-based” rental facilities. Yet spend some time researching and you will quickly see how many graded and formally accredited establishments have also listed their accommodations on many of the online platforms which the naysayers are supposedly against.

The reality is that the days of being able to afford the higher costs of staying in hotels or graded establishments are over for many local travellers, and will be for some time to come. International travellers always have the exchange rate benefit, so cost is not a driving factor for them.

For now, however, the focus can only be on attracting SA-based travellers. Besides the ‘local’ experience of staying in self-catering accommodation, which is what the Airbnb-type platforms offer, it is absurd to expect holiday rental hosts to just shut up shop and stop operating.

One does not have to be a medical practitioner to know that it is a lot safer for a family group to be staying in one house on their own that staying in multiple rooms in a hotel where the risk of contamination is unquestionably higher. Somehow this logic is lost on so many people.

Whilst many do agree that regulation of the informal holiday-rental industry should happen, the government made a half-baked attempt to do so at the end of 2018 and to date there has been more dust and hype about this than anything else.

If regulations are going to succeed to satisfy all parties, they will certainly need to be properly debated and articulated, as has been done in many countries around the world, and with sensible and appropriate input from Airbnb’s own experience of working with governments on a global scale.

In the meantime, the hard-hit accommodation sector in the Overberg continues to try and survive daily. Proof of the carnage is clearly visible in the huge increase in the number of Airbnb properties that are now available for long-term rentals and the increase in the number of houses for sale. This is certainly a trying time for all in this sector and one can only hope that common sense will prevail, sooner rather than later.

Sharing is caring – spread the word

While most of us are in a recovery stage from the initial shock of the lockdown’s impact on the tourism industry, now is the time to get creative and be an ambassador for our region by whatever means possible. Each and every person involved in the tourism sector needs to make a concerted effort to attract South Africans to the Overberg when regulations allow local leisure travel to recommence.

Whilst the jury is out as to whether this will extend to international tourists before 2021, there is a captive audience of SA travellers who need to hear about what we have to offer.

Whether you have a 2-sleeper or 10-sleeper Airbnb, traditional guesthouse, boutique hotel, B&B or self-catering facility, you need to spread the word and start creating an awareness of the Overberg, the likes of which has never been seen before.

Social media is now the prime tool through which we can reach tens of thousands of people by simply making clever and creative use of platforms like Facebook. As mentioned in a previous article, the mantra “When the going gets tough, the tough go marketing’ has never been more applicable than it is now.

Each and every tourism facility should have its own Facebook page or website. If you don’t and are wondering how you are going to rebuild your guest bookings, it is critical that you create a presence to capitalise on the wave that will come. It is a very simple process to leverage posts from other companies/media/tourism agencies/art galleries and the like that are posting good news stories about the region. These are the posts which you should be sharing with your network of contacts in order to broaden the reach.

There is a wonderful term in advertising and marketing called ‘Spaced Repetition’, which simply means that the more you see information over a period of time, the more likely you are to remember it. This is what we want potential tourists to experience, so the more they read and hear about the Overberg, the more likely they are to remember it as an option.

The key tips to spreading the word are the following:

  • From your Facebook page, ‘Like’ the pages or join the Groups of other companies/media/tourism agencies whose posts you want to see. Examples of these are Hermanus Tourism Bureau, Hermanus Online Travel Magazine, Hermanus Western Cape, Village Explorer, My Hermanus, all of the Wineries’ FB pages, all of the Festival FB pages… the list is endless but should be focused on those aspects that will be of interest to tourists.
  • When you see those posts, pick the relevant ones to share to your network and add a narrative to the post share that personalises it for the reader. The relevant posts are those that will attract the reader to consider making the Overberg their destination of choice whilst overseas travel is restricted.
  • Those of us who are proactive on Facebook will know that every week we get a link to that week’s edition of The Village News. By simply sharing that link to your contacts, you are increasing the reach to such a degree that you are bound to touch people who may never have considered coming to the Overberg for a holiday.
  • Once you have the hang of it, this process will not take much of your time on a daily basis and the more you are posting from your page, the more you will increase your visibility when sharing posts of interest to tourists.

The point is that in this Covid-19 world we are now living in, it is no longer enough to simply rely on listings on the holiday rental portals, even if your facilities are listed on many of them.

In the upcoming months there are going to be even more properties listed for holiday rentals, which will yet again have a downward impact on nightly rates because of the oversupply. We are already seeing traditional holiday rental properties being put onto the long-term rental market and in time, potential long-term tenants will be spoilt for choice.

Even some of the well-known B&Bs are considering this as an option, particularly if their historical guest bookings have been from overseas guests. Whether the rentals will be realistic or not remains to be seen, as traditionally this market has pegged long-term rentals at rates above what is realistic for the majority of accommodation seekers.

This is one of the most exciting times to realign, readjust and reassess your priorities. By climbing on the ‘spread-the-word’ bandwagon and shouting from the treetops just how great our region is, our communal effort can only but bring the desired results. After all, considering how much misinformation and fake news was fed to us all via social media since the start of the pandemic, imagine the impact of truth being fed to all our combined contacts, consistently and repeatedly.

Holiday rentals – preparing for the new normal

At the time of writing, we are still on Level Four of South Africa’s lockdown and the future of tourism is still hanging in the balance. Like me, I am sure many of you are well and truly over all the negativity, panic and conspiracy theories we have been exposed to.

The question remains, however, what do we do to prepare for the future of the holiday rental market? We entered this era with an oversupply of Airbnbs and listed holiday accommodation, as well as a diminishing scale of tariffs over the past 18 months, since the highs of the pre-riots era. The quality of the accommodation was dropping and it had become more about the buck and less about the holiday experience for visitors.

Most hosts are now wondering what actions to take to be ready for the next wave of tourists when the new normal commences. Before getting over-zealous, there are certain facts to keep front of mind in planning the way forward:

  • The first wave of tourists will probably comprise South Africans who haven’t toured the country for years; they have tended instead to travel internationally for their holidays.
  • I suspect there will be even more people trying to list their properties, so the competition may be even fiercer than before, with far fewer visitors coming to our shores in the 2020/2021 season.
  • With holidaymakers spoilt for choice, differentiators and quality will become key factors when booking and it goes without saying that sanitisation protocols will also be top of the list.

One of the biggest challenges we are faced with is to get as many tourists as possible to visit the Overberg. Listening to Clinton Lerm’s interview on The Village News Hour on Caledon FM on Tuesday 12 May, I was reminded of a mantra from my years in the corporate world: ‘When the going gets tough, the tough go marketing.’

To date, most Airbnb and holiday rental hosts have relied on the region’s media to raise the flag for the Overberg. Whilst that has proved effective, a more concerted effort by everyone in the holiday rental market needs to be made to appeal to South African residents to consider our region as a preferred holiday destination.

Many Airbnb hosts do not have their own websites and rely purely on the listing to create awareness. As Clinton accurately indicated, tourism- and hospitality-minded hosts need to do their bit to create a heightened wave of awareness.

There are multiple ways in which this can be done, but if all serious hosts start spreading the message through their own websites and Facebook pages, it could have a major impact. The more positive stories about the area and its attractions are shared, the wider the outreach to South Africans, who may never have considered coming to this region for a holiday.

Now is the time to think about what possibilities you may have to attract guests in what is likely to be a minefield of accommodation options. You can also plan your maintenance now so that providers can kick in as soon as their lockdown restrictions have been lifted, and you can spruce up your amenities in order to attract guests.

If ever there was a time to declutter, it is now. Believe me, there are Airbnbs so filled with ‘stuff’ that guests are discouraged before even making enquiries. This is the perfect opportunity to donate to charities and to support the less privileged in our community who will be caught up in an increasing state of poverty for a long time to come. Or, if you prefer to support animals, then HAWS and the other animal welfare societies are another option.

Get creative and do things like rearranging furniture (simply changing a room’s layout could be a great way to give the space a fresh feel); change door handles (whether it’s the front door or the kitchen cabinets, adding new handles could make things look more interesting); do some creative painting (so many things will be improved by a simple repainting project eg. doors, chairs, fences, cabinets and even staircases), or repurpose objects – an old stool that’s no longer in use could make a great bedside table, or a wine rack could be used in the bathroom as storage space for towels and other small items.

The challenge is out there. It’s up to us to create so much awareness of our spectacular town and region that the next wave of tourists wanting to discover how amazing this country is, will make their way directly to us.

Accommodation sector taking a hard knock

As we all adjust to life in lockdown and the uncertainty of what lies ahead, writing about the state of the holiday rental market might seem like a slap in the face by a close friend. If ever there was a time in my life when I wished I had a crystal ball on my desk, it is now. The global future has never been as difficult to imagine as it is at the moment. Some older folk are even comparing the cataclysm of this pandemic to that of World War II.

In our small part of the world, where the local economy was starting to show positive signs of recovery after the 2018 riots, the lockdown is having a devastating impact on the short- and long-term accommodation sector. There isn’t anyone with a hotel, guesthouse, bed & breakfast or Airbnb room-to-let that hasn’t taken a financial bath in the past two months and the predictions for the rest of this year are already looking pretty gloomy.

There are many scenarios that could play out in the next few months and no one can be sure which way it will go. The biggest concern for many who have relied on their rental income as a means to survive month by month is that the income stream has simply dried up, overnight. In the same way as the world is forced to endure what some see as a global cleansing, so we in the Overstrand are going to see a change in tourism dynamics that even the most astute hosts and business owners may find hard to comprehend, never mind the adjustments that will have to be made.

One encouraging change I have observed is the extent to which many people seem to have had an epiphany in terms of who they are and how they’ve been living, and how this will impact their lives moving forward. Humanity has been forced back to the basics, and the compassion and support shown to those less fortunate in our community have been profound. I doubt that many people will come out of this unchanged in one way or another, and I hope that some of our arrogance and lack of consideration will change as we are reminded of what is important in life. I know it has done that for me.

The one thing to level the playing field is that we are all in this together, whether we like it or not. For once, this is not a political positioning of the powerful, as nothing is more powerful right now than COVID-19. If ever there was a time to behave with humility then this is it. For those of us with Alpha-type personalities, it is challenging to say the least. We will need to adapt to the new restrictions as, for once in most of our lifetimes, we can only plan within a short time-frame until some sense of normality returns.

If I dare make some predictions about what could transpire in the next few months, the one obvious focus for all accommodation providers will be a new approach to sanitation and cleanliness, the likes of which we haven’t seen before. Once the tourists start returning to our shores they will want all kinds of reassurances that hygiene protocols are in place.

Many hosts have asked me the question we all want answered: When will normality return? Taking all things into consideration, and being realistic rather than blindly hopeful, I suspect we will not see a real pick-up in numbers before the end of the year. This prospect is shattering for all concerned, but it is largely out of our control and in the hands of the powers that be to determine when the “new normal” will become a reality. What we will need to do is to make sure we have a plan in place in order to adapt quickly to whatever the outcome will be.

If there is one thing I can predict, it is that the spirit of survival of South Africans and the incredible levels of positivity and camaraderie to be found in this town will make the transition to the new normal a united one. We have a tough and bumpy road ahead, but as long as everyone accepts that we are all in this together we’ll be able to remain positive rather than fretting about what we cannot change.

Airbnb evolution and 2020 trends

Many homeowners who rent out their properties are unaware of how this concept of ‘home-sharing’ came about, and the impact it has had on the entire tourism and accommodation industry. In the early years, home-sharing did not enjoy a good reputation as it was a very hit-and-miss operation where the properties left a lot to be desired, yet were usually cheap and convenient.

In the mid-2000s, when the first company (HomeAway) went online with its rental business, homeowners could advertise their properties through classified ads. While this was the first ‘marketplace’ for rental properties, it also came with several problems. Guests had to make bookings directly with hosts and when multiple platforms were used, calendars weren’t up-to-date and hosts often didn’t respond to requests.

Air BNB Trends

In 2008, when Booking.com became the first online travel agency to integrate vacation rentals, properties often only contained the bare necessities with no kitchenware or other amenities. Some processes were still manual and a lack of end-to-end automation made the entire process complex and open to all kinds of misrepresentation.

When Airbnb entered the market about 12 years ago they targeted the urban market rather than the vacation rental market, and their growth since then will be recorded in the annals of history. This market represented a different type of customer and grew significantly until the company had a tremendous hold on the vacation rental market.

Airbnb’s impact on the short-term rental industry upset the marketplace entirely, as staying in an Airbnb was cheaper than staying in a hotel and allowed guests a much greater choice of accommodation and an opportunity to experience the local way of living. It offered a more personalised hospitality experience than traditional establishments could provide.

Whilst many alternative platforms exist today, Airbnb still has the largest number of global listings and their charges to hosts remain at the lower end of the market, in the region of 3 – 3.5%. The majority of other players are charging between 15% and 18%. (However, it is fair to say that Airbnb does not necessarily generate regular bookings just because their commission is the lowest.)

As the years have gone by, much higher levels of sophistication have come into play and homeowners and hosts have found numerous entrepreneurial ways in which to attract guests and to give them a memorable ‘come back again’ experience. A fine line is now drawn between a guesthouse and a traditional B&B and an Airbnb, and the subtle differences lie not only in the pricing but in the quality of amenities and personal touches.

Sadly, this has created a myriad of issues between the formalised accommodation sector (i.e. hotels and star-rated establishments) and the holiday rental sector, resulting in a level of competitive unpleasantness that raises the hackles of many in the formal sector.

Looking at the state of the industry today, it’s clear that hosts can generate a decent income provided they up their game. Whilst low-end rates will still attract the younger generation, high-end travellers expect a level of quality similar to that of a hotel.

It is of critical importance for hosts to understand that in season, guests booking for a longer rental period (10 – 20 nights at peak season rates) have a different expectation than out-of-season guests who might stay for 1 – 3 nights.

After conducting wide-ranging international research, a few trends spreading across the short-term rental market are worth noting:

  1. Airbnb’s are becoming more professionally managed

    In light of increasing competitiveness and a current oversupply of short-term rentals, owners are moving away from self-managing rentals and appointing professional hosts to manage the entire process for them. Part of the reason is that traditional hotel guests who have higher expectations are staying in top-end Airbnb’s and expecting the same level of professional management.

  2. Availability and bookability are more relevant than the number of listings on a portal

    Many hosts are attracted to the portal that has the highest number of listings. This can be very misleading, as a significant percentage of properties are available only in peak season and not at any other time of the year. With reviews and high ratings being of key importance in search rankings and booking suitability, the more a property can be rented out and the more (good) reviews it receives, the better the chance of more consistent bookings.

  3. The market continues to focus on ‘local’

    Travellers choose Airbnbs to experience a ‘local’ flavour during their stay. The local hosts who understand the market and tourist facilities are able to make guests’ stay that much smoother and more enjoyable. They can create a unique, personal experience that allows guests to embrace the culture of each city or country they visit.