Credibility of building service providers being challenged

With the economic effects of the past 18 months being felt across the spectrum, the latest run of casualties in Hermanus is within various sectors of the building trade.

Most conversations with builders and associated service providers are peppered with phrases like “we are looking elsewhere to find building opportunities”, “people won’t pay the high rates that are charged in the Overberg” or “land or homeowners are bringing in builders from Gauteng as it still works out more cost-effective than using locals”. The messages are all similar and it does leave one wondering about the state of our building trade.

The larger, well-established and entrenched building firms are carrying on regardless as they have a good pipeline of projects. While they may be the more expensive firms to use, they do generally provide the highest quality finish, which is sorely lacking with many of their competitors.

The same applies to the plumbers, electricians, carpenters, aluminium suppliers and the rest who are deemed to be “too expensive”, yet only get called in after the “cheaper option” delivers a sub-standard result.

Many of the medium-sized builders are looking elsewhere for opportunities as fewer new builds are planned for the foreseeable future and there as so many competitors chasing a tiny piece of a shrunken pie.

The “bakkie brigade” builders, who are often the cheapest and less focused on exceptional levels of quality or customer service are vanishing overnight as more and more homeowners hold back on their building or renovation spend, or no longer use the same builders as before, due to the reworking that constantly has to take place.

Whilst we have to take our hats off to those with an entrepreneurial spirit who are providing quality service and workmanship, the number of disillusioned homeowners with horror stories of bad delivery is increasing.

In the past month, we have seen numerous examples where companies have been entrusted with a contract, in many cases based purely on being the cheapest, and the quality of work delivered is beyond unacceptable. That should not come as a surprise as when the price is “too good”, the end result will most likely be sub-standard. Fortunately, there are the odd individuals whose services are affordable and who provide the level of workmanship that dreams are made of.

We have witnessed situations where clients have been billed for a particular product and related service, only to find out six months later that the product they paid for is not what was used – and they have to fork out a heap more money to get what they thought they already had.

There have also been cases where contractors use a reputable, branded product’s packaging, but an inferior product is used to do the job. That is a blatant rip-off and downright unethical, but the responsibility does also lie in the hands of the homeowner who must do due diligence when selecting a contractor.

So the question is: What can homeowners do to avoid the pitfalls of bad quality worksmanship and service delivery?

Firstly, people are not taking the necessary precautions to reference check the builders or contractors. It is imperative, depending on the nature of the work to be done, that you look at the quality of the contractor’s work done elsewhere, speak to their clients about their experience and any pitfalls they had. Don’t just look at the visible result, but delve into the details of the work that was done.

Many contractors have a brilliant ability to “put lipstick on the pig”, but when that lipstick fades away after a few months, the pig is still there.

Unless you are 100% sure of what you are getting, you have every right to get comparative quotes and we always recommend that you do so, at least until you have a track record of successful performance with a specific company.

If embarking on a large renovation or new build, it is advisable also to check which sub-contractors the prime contractor uses, as that could also be a point of contention once the job is underway. Alternatively, involve your architect or an independent third party, neutral to the prime contractor, to ensure that you are getting the best deal for the budget at hand.

From our personal experience, the prime contractor could be exceptionally good at what they do, but it often happens that they get dropped by a subcontractor who delivers a bad end result and tarnishes the builder’s reputation. That is a two-edged sword though, as it also highlights the level of effectiveness of the prime contractor’s supervisory and project management capabilities.

Tourists are attracted by the ‘wow’ factor

After what has been a seemingly long and thankless year for many holiday rental hosts and agents, the brief taste of summer that we experienced before the recent rains has triggered a spark of optimistic preparation amongst many hosts.

There are so many ideas being touted about how to make a real difference in the guests’ experience with the ultimate objective of getting great reviews, recommendations and returning guests. That is, of course, if you have a mindset that is focused on tourism first and revenue second. The other side of that coin is an eye-opener of note.

Every serious host will know that first impressions really do count and the few extras that require a nominal investment will go a long way towards making the start of a guest’s holiday an inspiring one. Hosting is not just about meeting and greeting. Irrespective of the level of accommodation offered, some form of investment, be it in time or money, is required on an ongoing basis. This includes making an extra effort in communicating with guests prior to arrival to clarify and manage their expectations.

Experienced hosts will automatically have all the basics in place – thoroughly clean accommodation that is uncluttered and tastefully furnished, with all the required facilities and amenities in place, including decent linen and towels (not threadbare and rough). Those less experienced, with a mission to “make a buck” above all else, will find that whilst they initially do get bookings, the post-experience may not prove to be as rewarding as expected. And in a market where the oversupply is voluminous, if you don’t go the extra mile you will not see the financial return you may have expected without doing something different.

Every living person loves a surprise, so when you make a booking somewhere and you get a quick, professional and warm response, it immediately makes you feel close to euphoria that this may be a sign of what is to follow. An approach that demonstrates a willingness to help goes a long way towards building a relationship with incoming guests, so that when the day comes to greet them, it is like meeting up with old friends.

Add to that a few extras when they arrive and you are off to a good start, as your guests start ticking those review boxes in their minds. So many people think that the inevitable chocolate on the pillow does the trick, but you can achieve so much more with a few creative ideas that will remain a memory for the guests long after they have left.

In this technologically advanced age, don’t assume that every guest is techno-centric or even wants to hassle with Uncle Google when trying to find places of interest. A well-prepared guide book on local activities and experiences always goes a long way to assist guests in planning their stay.

Add to that the latest copy of the local newspaper and you could save your guests a ton of time. Pro-actively offer advice and remember that whilst lock-boxes are a good idea for late arrivals, there is nothing quite like a personal, enthusiastic welcome by a host. Put on your tour guide hat and spend some time educating your guests on what to do and where to go.

As the nightly rate rises for more upmarket accommodation, there is an unspoken expectation that guests will get their money’s worth. A welcome bottle of wine, an appropriate flower arrangement, fruit or snack bowl, starter kits for the kitchen and bathrooms (specifically in self-catering options) and even discount vouchers that you can arrange with some local restaurants and spas will immediately be noticed and remembered.

Always try and get as much information on your guests through pre-arrival communication and determine if there are special events that they may be celebrating. Follow that up with appropriate action to add to the positivity of their experience.

Top of the list in managing expectations is being upfront in the description of the property and accommodation. Never use misleading pictures or descriptions. There is nothing worse for ratings than a guest arriving at their holiday destination to find a damp, semi-dusted excuse for a holiday rental with only the sparsest of amenities, unless that is what you booked.

And do not forget that there are certain must-haves in SA like braai facilities (not just a hole in the ground with a grid), Wi-Fi (a 21st-century reluctant necessity) and appropriate security, depending on the location of your property.

In planning your personal approach to attract returning or referred guests, keep communication front of mind before, during and after their stay. This will add a dimension to their experience that will knock “invisible” hosts out of the park.

Commercial property rentals – what is really at play?

While researching the state of the commercial property rental market in Hermanus, I stumbled across the story on Facebook about the demise of Mock Turtle, a once-thriving nightclub and dance bar, which was forced into closure due to a string of circumstances. While the story left me somewhat dumbfounded, it stuck in the back of my mind as I listened to tenants and landlords giving their views on the current state of the commercial property market.

As is often the case, when business is tough and people are struggling to keep their doors open, the emotions and sensitivities are at a peak and anything that threatens a business’s viability becomes a challenging conversation between tenants and landlords. What has been highlighted by the conversations I have had, is that there are more than just two players involved. Reading the Mock Turtle story is a must for anyone trying to get to grips with the status of this market and its impact on local businesses.

One consistent message I received is that unless the tenant-landlord relationship is one of partnership and collaboration, there will continue to be dissatisfaction when times get tough. There also appears to be a distinct difference between the relationship with a “corporate” landlord/managing agent versus a private landlord, who manages the relationship with the tenant directly and not via a managing agent.

The two main issues are the duration of a commercial lease and the annual increases that are applied. There are many arguments in favour of both the landlord and the tenant’s viewpoints, but it is apparent that unless there is flexibility in the rules that apply, both parties could come off second best when a dispute over either of these issues arises.

There are landlords who are willing to negotiate with existing tenants who need to downscale their premises in order to survive. There are also those who refuse to consider any flexibility and would, therefore, lose the tenant and sit with an unoccupied space, similar to what is happening at the higher end of the residential rental market. What is really of concern to many is the other factors that are impacting on businesses’ budgets and survival.

A classic example is that of some companies who moved out of the CBD, at quite some expense, to avoid the impact of the planned upgrades and re-establish themselves elsewhere, only to see delays in the upgrades which to this day are anyone’s guess as to what will happen and when. It is all good and well to blame the opening of the Whale Coast Mall on most of the CBD’s woes but it does go way beyond that when differentiating between a large retail chain brand and a small business entrepreneur who wouldn’t be able to afford those rentals anyway.

The net result is a catch-22. The CBD looks lonely and set adrift by day and by night, with the exception of a few areas populated by eateries, art galleries and bars. There is nothing inviting for visitors as they enter town after Gateway Centre and the closer one gets to town, the less appealing it looks. Both landlords and tenants are frustrated as both are impacted by circumstances that they do not necessarily have control over and each blames the other for their respective woes.

When times are tough, the smallest of issues can become exaggerated out of all proportion, whereas during the good times, they are hardly noticed. So whilst conversations of survival are key to sustain the needs of both landlords and tenants, there are times when both parties simply will not agree because of the emotions at play.

The Mock Turtle story (search for the name on Facebook and scroll down to the post) adds another dimension to the conversation and, whilst every story has two sides (or in this case a lot more), one has to wonder to what extent the approval processes for business licences or rezoning play a role in the challenges being faced by business owners and landlords, as delays of this nature affect both parties. If it can happen to an establishment like Mock Turtle, it could happen to any business that is trying its utmost to survive but gets stifled by red tape and procrastination.

Then there is the old guard who, despite the realities of the world, do not get it that progress is inevitable and nothing anyone does is going to change that. So, yearning for the “good old days” when Hermanus was just a holiday town becomes a pointless exercise when a larger percentage of the local population is striving to bring more tourists into town, which will bring growth and change with it anyway.

One can only hope that collaboration and communication between tenants and landlords brings about a better solution for all and that regulatory and approval processes are supportive of business entrepreneurship rather than a noose around its neck.

Read the Facebook post from the owners of Mock Turtle below

How Hermanus Municipality and Big Business is Killing our Town.The inside story of what has happened to the Mock…

Posted by Mock Turtle on Wednesday, 11 September 2019

Mock Turtle
11 September ·
How Hermanus Municipality and Big Business is Killing our Town.

The inside story of what has happened to the Mock Turtle.
(A bit of a read, but I feel it is time to share the shocking backstory.)

It is just after 3am and I cannot sleep. I have been rolling around in bed for the last hour trying to convince my brain that it needs to calm down and give my body a rest.
No luck, so I get up and aimlessly walk through my dark house. In 3 hours I have to start my day and I know it will be another stressful one.

This is how it has been going every night for the last year. By now I know that it is stress that is keeping me up.

I’ve read articles on sleep deprivation and, to my dismay, have learned that sleeping 4 hours a night combined with constant stress may very likely kill me.
Great! Another thing to worry about – a small, dark thought creeps in and for a moment I think: “Well, if that happens at least I will finally get some rest and my worries will be a thing of the past.”
With shock I realise that a part of me actually relishes the idea of death, of leaving my suffering behind. I quickly stop this train of thought. I cannot think like this.

I have a husband and 2 small children – I have to be there to protect and take care of them, to guide them through this broken world.

This is my story. This is how I came to be where I am now.

In 2008 we moved to Hermanus from Sun City Resort where I grew up. My husband (then fiancée) had a job offer at the Arabella Hotel and I had decided to start my own business.

My family has a long history with Hermanus that spans many generations. This is where we had our family holidays, where my mother conceived me, where I had my first kiss, where I started married life and bore my children. It is the final resting place of my brother and grandparents. It is also where we’ve all planned to retire eventually.

In June 2015 I bought Shimmi’s nightclub, which was located in Hermanus Village Square Mall.
It was a beautiful little nightclub, which had been operating for almost 15 years.

As I have worked in hospitality and events my whole career, it was the perfect thing to add to my business. I loved it from the first moment and put everything I had into creating a phenomenal venue and guest experience.

We changed the name to Mock Turtle and also started opening during the day as an eatery and cocktail bar. We were doing great, becoming the most popular party spot in Hermanus. We hosted year-end parties and private functions for multinational businesses, building an impressive following. We had international visitors and celebrities that visited us year on year. In 2018 we were extensively featured in multiple episodes of MTV’s reality TV show, The Challenge.

In 2016, a year after buying Shimmi’s, everything started changing. Village Square was sold and the new owners had other plans for the mall. They wanted to turn the top floor into a hotel with guest apartments and made a deal with a well-known hotel group in town. One by one the businesses in the mall started closing their doors as their leases were being cancelled and their shops turned into guest rooms.

In 2018 they started building guest rooms (with dry wall!) right next to Mock Turtle – something that worried us greatly, as we knew this was going to cause problems for us.

On 3 December 2018 those units next to us opened (without even being fire & safety compliant or approved by all local authorities). From then on we received noise complaints almost every day – mostly because of activity inside and outside of the mall – people making a noise in the public parking lot and streets etc.

I had many meetings with mall management, my argument being that there will always be noise complaints from those rooms regardless of our being there or not, as it was not built correctly or ideally located. Today we are no longer there, and the noise complaints from their guests continue, so now they just reply with “It is the CBD, and the area is always busy and noisy”. You just have to read the online reviews for those guest units to see for yourself.

Regardless, between the mall and the hotel group they hatched a nefarious plan to give us the boot. Using made up allegations against us, trying to force us out of the venue (and we were not the only ones – just ask some of the previous tenants who have gone through the same thing).

Fortunately I had all the evidence (written, photo & video), which we’ve collected over many months, proving that they were not truthful. So off I went to see my lawyer. I had a good case and would even be able to prove that their legal statements made under oath were false and full of mistakes.

When I met with the mall to discuss my concerns they basically told me: “We are big and you are small, we will drown you in legal fees and sink you.” Telling me that their loyalty lay with the big hotel group, not with the small businesses that lease from them; that they want to change the image of the mall and don’t want “those” kind of people (our patrons) in the mall any longer.

Do they even care that “those” people were some of their own clients, hotel guests, golfing groups, high rollers, celebrities and artists, not even to mention our very own locals who’ve also supported the other businesses in the mall?

My lawyer advised me that we can fight their case and will most likely win, however, he advised against it as he had dealt with a similar case with them before. In the end they will just appeal the outcome and drown us in legal fees.

Thus, in January 2019 we gave up and went searching for a new venue to move to – not an easy feat if you run an entertainment venue which comes with extensive licencing and special zoning permission.

I was lucky to find a new venue nearby, located in the middle of the CBD. I did not just blindly take the first place I found – before I signed our lease I visited Town Planning, the Municipality & the other powers that be. I wanted to hear from them if they thought the area and venue would be suitable for Mock Turtle. If it was worth investing the last money I had in the move and saving my employees’ jobs.

It was confirmed that it would work well, as it was in the middle of all the other bars and pubs in town. It would also fit in with the municipality’s old-town renewal plans, as the area is to become a new tourist hotspot and due to our popularity we would draw new feet to the area.

We were so excited! The premises were already business zoned, and I only needed to put in an application for special zoning permission to run a place of entertainment. After this I went to see Plan Active, who would assist me with the zoning permission application process (at great expense), as I had no idea how the process works.

I was worried about not being able to trade for the time that it was estimated the zoning permission process would require. Paying salaries and rent without income for months is not something anyone can afford, so I asked our local Designated Liquor Officer what we could do with regards to trade in the interim.

I was advised that I can apply for a temporary event liquor licence, as zoning permission is not applicable with such a licence. We could thus bridge the municipal waiting period and open for trade on weekends and some holidays – just a few days of trade per month to carry us financially until the municipality and town planning had finalised their process.

I informed all the authorities of our plans going forward and signed the lease at the end of January. I submitted and paid all our applications and in March we started a costly R200 000 refurb in the venue (after we had received our building plans from the architects).

We made sure our fire & safety compliance was in order, received our population certificate from the municipality and our event liquor licence was approved. At the end of March we were ready and opened our doors for business on Saturday, 23 March 2019.

We had a wonderful soft opening that was well attended. Everyone was excited to see the new venue. We had no idea what disaster was heading for us next…

The very week after our opening we received a complaint from a lady that operated an unlicensed B&B nearby, without the knowledge or permission of the municipality. She was furious that we dared open a place of entertainment near her business, stating that Mock Turtle was operating illegally (she never even came in to verify our compliance documents, which are displayed on our wall as required by law). She laid a complaint with the local authorities, saying we were operating without a liquor licence (which of course was false).

Hypocritical much???

The biggest shock for me was when other business owners and employees came to see me after this and informed me that she had gone around to everyone in the area, asking them to complain about us so that we could be shut down because us being there was going to lower everyone’s property values.

I have come to accept that she is just one of those miserable humans that will always be unhappy and have problems with others. She is not well liked in town either as she has made problems for other businesses as well, from what I have been told. Sadly, she does have supporters here, because in this town, like all others, we also have quite a few trolls who think they own the town and want to prescribe to everyone else what they can and can’t do.

Regardless of our right to operate, we were informed by Town Planning that we need to get a costly impact survey done and could not trade until this is completed – we had to do this to satisfy the authorities that this lady’s complaint was baseless.

So we had to close our doors again right after Easter weekend for this. The survey was done and we passed with flying colours. In June we opened for trade again, after being closed for 2 months.

By now it was winter and Hermanus was out of season. Trade is slow at that time of year. I was also running out of funds from carrying a non-operational business for months. On the 1st of July I had to close my doors again and let all my employees go, as I realised that I will not be able to keep financing the business until town planning and the municipality finished with their zoning permission.

We had gone through the costly zoning application; we followed the prescribed rules and made the necessary changes that were required of us. In April we were asked to immediately pay R4 070 to the municipality to place our notice of application in the newspaper as they wanted it placed that same week – I paid the amount on the Monday so that it could be placed that week.

The notice ended up just sitting on a municipal desk for a whole month before it was placed, stretching out the waiting period even further.

Finally we had our comment period in May, after which the last commentary had to come from the municipality. It is now September and we are still waiting for the municipality to get their final paperwork done. I keep phoning and following up on progress.

For the last month, all they can say is that they are waiting for one person at the municipality to confirm that we have enough parking bays (even though we have 2 huge public parking lots right in front of our premises and Town Planning and the Liquor Authority had already confirmed we had enough parking).

Sadly, due to this turn of events, Mock Turtle will be closing permanently next week. I wish that I could have continued the Mock Turtle legacy, but I simply don’t have the funds to trade anymore.

I have given my cooperation with everything, doing all that was requested of me. Smiling and always polite, I accepted what came my way, even though I was breaking inside. Unfortunately this town has a clique that does not support change. They want growth, but they expect everything to stay the same.

Today I decided NO MORE! It is time that something is said and I am hoping that everyone will share the hell out of this post.

People need to start speaking up and making themselves heard. As long as we are stuck with this municipality and the handful of spiteful Hermanus residents, Hermanus will just keep on sinking its own citizens.

WE NEED CHANGE! We need people who will put the welfare of our town and its people first, and not only think of personal gain. We cannot afford to continue being run by and prescribed to by bigots and people that clearly do not do the work they are being paid for.

Just look at our town – closed shops on every street and in every mall. Wondering what the unemployment stats for Hermanus are these days.

This whole drawn-out process has unfortunately also completely bankrupted me. I am losing a successful business that took 12 years to build. My losses are in the millions.

I had to eventually sell my car, my wedding ring, clothes and everything I possibly could to pay my bills. I have lost my medical aid, my savings and may even lose my house in the next few months.

My 7-year-old son has Aspergers and has to go for regular occupational therapy, which is now no longer covered by medical aid, thus he cannot attend sessions. Neither will I be able to get the much-needed knee operation to fix an injury that has been paining me for months.

My family is living from hand to mouth these days. In an effort to keep food on the table for my kids I have actually started skipping meals myself, only having something every other day. Thinking of the 15 Hermanus locals who’ve also lost their livelihoods due to this just breaks my heart. They also have families and kids who are now paying the price.

I am thus ending this chapter of my life, and hoping to make a new beginning elsewhere.

Lastly, I have to mention the people that made this nightmare a little bit easier.

• My employees. Thank you for your loyalty and the excellent service that you provided over the years. For sticking by me and sharing in the dream we had for Mock Turtle. I wish you all the happiness in the world.

• David Williams from Barnies. Thank you for helping me build my dream and supporting me when I was at breaking point. You are a giant amongst men and the most loyal person I know. The world will be a better place if there were more people that had your integrity and compassion.

• My landlord, Brigitte Sabbe. You have been an amazing source of support and have stuck with me through the whole process, at huge risk to your own business. I wish that we could have worked together longer, as I think we see the world in much the same way. I also hope that you light a huge fire under our lackadaisical municipal staff’s butts to get them moving. I know you also have other tenants who are struggling to open businesses due to the municipality not handling applications in a timeous manner.

• Fabio from Tosca’s, who always had a friendly word to share and kept us fed during the long refurb hours.

• Linda & Ria at Coastal Trusses, where I still have one last refurb bill outstanding – thank you for your patience and the compassion you have shown to another suffering business in town.

• And to all you party animals who’ve supported us over the years and during this almost year-long waiting game – it has been real. We have made crazy memories and we had great fun while it lasted. Our FB page will stay up as a reminder of all the good times we had at Mock’s, as well as the damage that a poorly-run state entity can cause to a well-run business.

*** For the next week I am opening the venue for private viewings as I need to find a new tenant.
The venue is a beautiful piece of art, and I am hoping to find someone that is willing to take it over as is.

All trade equipment will put up for sale to try and cover my losses and pay my last bills, however, I will give the new tenant first option to buy everything, should they wish to open a restaurant, coffee shop, pub & grill or such – that at least we are zoned for.

Interested parties are welcome to contact me directly.

Rental accommodation: its time to adapt or die

As the countdown to the Heritage Day long weekend and Whale Festival began, many hopeful Airbnb and short-term accommodation hosts were prepping for what they hoped would be the start of a new round of guest bookings. Cleaning and garden services were running ragged as hosts did their utmost to get properties ready to exceed guests’ expectations and to make their visit a memorable one.

One could see the branded vehicles of companies like Smart Cleaning Services, Broomstix, Home Genie and Butlers as they made their way around town. It does appear that the winner of the battle for guest bookings, however, was the long weekend rather than the festival weekend. On top of that, there were also a number of cancellations, largely due to talk of the Land Party’s march which deterred visitors from even trying to come through.

There are always two sides to every story and whilst some hosts continued to welcome guests, many were once again disillusioned about the lack of bookings for the Whale Festival weekend. In conversations with hosts, there is a clear picture forming of misunderstanding on a number of levels.

Hosts that had a reasonable flow of guests were mainly those accommodating 2 to 4 guests and particularly those in close proximity to the CBD. In a few instances, the establishments were fully booked but the main drawcard was not the festival. There were more families in town due to the school holidays and in many cases lower-priced accommodations were sought. Many of the larger properties accommodating 6+ guests did not achieve the bookings they desired and in some cases the nightly rate was just too high for even the more affluent of travellers.

It again begs the question that I have touched on many times – is it realistic to expect family bookings in large houses outside of the December/January season? At this point in time the answer seems to be an emphatic NO. With that goes the reluctance of owners/hosts to accept a reduced rate and continuing rather to take nothing than have some return on their investment. The oversupply that we are all so aware of does nothing to help. Many travellers no longer spend what they used to on holiday accommodation and even those blessed with thick wallets are cutting back on their budgets as we continue to be battered by the global, South African and local economic status.

With a fair amount of criticism expressed on social media, I am of the opinion that the volume of negative reactions to various aspects of the Whale Festival will only continue to deter visitors from our shores for
this festival, unless something
changes.

I read more and more letters and articles which are on the verge of begging and pleading with our town “leaders” to drive initiatives that will enhance our national and global visibility. Somewhere this is getting nipped in the bud, while we continue giving credence to Einstein’s saying that “Insanity is doing the same thing over and over again and expecting different results”. That witticism seems to hold true for many locals who feel that nothing will change their attitude to the Whale Festival until a complete rehash of the ”same old, same old” takes place, to quote one of the comments on social media.

For the foreseeable future, the 2 – 4 sleeper units in the right place at the right price will be the sweet spot for both guests and hosts. Larger properties will continue to lose out during the off-season unless the owners/hosts come up with a different approach to attract bookings. In many cases this will not be possible, as the focus is more on generating income than on driving tourism.

Whether you agree with this sentiment or not, if you are a host, you have an impact on the tourism sector of Hermanus. That is what this town is all about and unless we all take a reality check and adapt to the tough market we are faced with at the moment, we’ll continue to wallow in a pool of negativity.

Hermanus rental market still treading water

The past six months have been filled with hope of seeing some renewed traction in the property rental market. Whilst feedback from most of the agents I spoke to was “no change”, the positive aspect is that the sentiment in the market is upbeat. As is typical of Hermanus residents, there is a lot of optimism that we will soon (if we haven’t already) be turning the corner on the issues that have plagued the market in the past year.

It will come as no surprise to the informed that there is still a major oversupply of unaffordable long-term rental accommodation and that demand for short-term rentals continues to be impacted by the fact that more houses have been listed. Some agents report that houses in the R 10 000 p/m and above bracket are remaining vacant for up to four months, after which they are either taken off the market or prices are reduced marginally.

There was a somewhat misguided perception that there would be a sudden upswing after the elections but, like with so many other economic markers, this did not transpire. Similar to a buyers’ market where buyers have more negotiating power, a trend has developed where rental tenants who are spoilt for choice are negotiating rental prices down, on properties that would be top of their list.

Some examples show a negotiated drop of as much as 30%. Good tenants with an existing lease are the winners at the moment, as owners are not forcing annual increases because they know they may not get another tenant immediately and then lose the ones they have. In a few instances, owners are more sympathetic about the financial issues of good tenants, with some even allowing a managed payment plan for rent, rather than going through a lease termination and possible eviction process. Some tenants are even cancelling long-term leases as they find the same or better accommodation at lower prices.

Annual rental increases are in the 3 – 5% maximum range. The days of a standard 10% increase levied by owners are long gone as they stand the risk of losing those tenants to lower-priced yet equally suitable accommodation.

A few new trends have become evident and time will tell whether these become permanent or simply a side-effect of the current market state. The one of most concern to rental agents and homeowners with Airbnb-type online listings is that accommodation seekers are trying to bypass booking on the portals. Having identified a property that suits their holiday needs, they try to approach agencies in the area to get them to contact the owners directly for a rental opportunity.

That then triggers a different negotiation around the commission for the agent and the rental income for the owner, and has the potential to create a lot of confusion and illegal transactions. By doing this, no-one pays the portal commission or service fees and the entire system is bypassed.

Another developing trend is that more and more people with listed properties that are not getting bookings are advertising the properties on various social media platforms, partly to avoid paying commission to the rental agents with whom the properties are listed. Whilst there is nothing to really stop them, they take a huge risk by not having any form of documentation or agreement in place and then handling the payment process directly, with no backup should any aspect of the booking become problematic.

Other comments from agents are that more shared rentals between families and friends are taking place to enable them to afford decent accommodation. Owners sometimes only find out about this after the tenants have moved in and, whilst not happy with the arrangement, they are not covered by anything in their rental agreement other than a clause referring to the maximum number of tenants. These days the CPA protects tenants so much more than landlords that it becomes a battle not worth fighting.

There have also been a number of disappointed homeowners who bought their properties with the specific purpose of renting them out for additional income, only to find that the market status as “sold” by the sales agent turned out to be anything but a “return on investment” opportunity.

A key point mentioned by almost all of the agents spoken to is that the community and tourism representatives responsible for the multitude of festivals, the wide range of sporting initiatives and marketing of Hermanus as a preferred destination should be doing a lot more to a) review all those that no longer serve the purpose of bringing income to the local market and b) align all of these initiatives to become a greater drawcard for international tourists.

It is fair to say that a lot of collaboration needs to happen in our community in order to spread the word globally. When it comes to holiday destinations, Hermanus and the broader Overstrand locales should be high on the list, leveraging all the festivals and events that happen here throughout the year.

Airbnb responds to proposed SA Tourism Amendment Bill

As an information junkie who probably spends too much time researching information on various topics, I stumbled across a 22 page letter dated 10 June 2019. Sent by Airbnb’s Regional Policy and Campaign Lead for Europe, Middle East and Africa to the Director General of the Ministry of Tourism, on the hot topic of proposed regulations around short-term rentals. This appears to be a fairly well-hidden communication which is critical to our understanding of the various viewpoints on the matter.

The letter is focused on the Tourism Amendment Bill, which proposes changes to the Tourism Act #3 of 2014 that will impact the core services provided by hosts on the Airbnb platform and is a comprehensive commentary of Airbnb’s view.

Having already worked with more than 500 governments around the world on measures to help hosts share their homes and follow the rules, Airbnb welcomed the opportunity to do the same in South Africa. They made no bones raising serious concerns as to the current wording of the draft Bill and its significant potential for unfairness and for disadvantaging a large part of the South African population.

Their view is that a collaborative economy increases consumer choice and helps thousands of regular people to make a little extra income to help make ends meet. By providing a clear regulatory framework – highlighting regulatory best practices and removing unnecessary and unjustified barriers to entry as well as growth – they view South Africa as a potential leader in this space that could harness the tremendous economic, social and environmental benefits of the collaborative economy and spread its benefits fairly to all residents, regardless of background and race.

Airbnb made one thing very clear: while they support the fair and proportionate regulation of home-sharing and experiences, regulations must be designed in a way that are unbiased and appropriate to the type of activity that is being regulated. Not to mention that the regulations must open doors instead of closing them to more citizens.

Their concern around the current wording of the Draft Bill, in conjunction with a number of public-facing comments made by the Ministry, is that the Ministry is considering regulations that are based on several misunderstandings of home-sharing and experiences, and their significant contribution to South Africa. This is a topic which I have written about a number of times so that all interested parties get a proper understanding as to what Airbnb is really all about. It is way more than simply a mechanism by which one facilitates short-term rentals.

In Airbnb’s opinion, the current wording of the Bill can introduce fundamentally unfair approaches which may disadvantage residents who are currently benefiting from platforms like Airbnb and making a difference to their neighbourhoods. An example of this is the definition of “short-term home rentals” which is very broad, with no clear explanation of what constitutes a “temporary basis”, or to which specific short-term home rentals it applies.

Furthermore, it provides for the Minister to introduce “thresholds” with respect to all short-term rentals without making a distinction between different categories of activity, or without determining to what those thresholds will apply. This will create uncertainty for the host community and could result in measures that are disproportionate and not related to local realities and challenges.

Airbnb clearly states that it supports policies that enable innovation in authentic and healthy tourism, that brings travel to the forefront of the economy, with participation from South Africans across geographic and community divides. They promote fair and equitable regulation which supports the right of home-sharers and experience hosts to continue welcoming guests from all over the world, benefiting their local communities as well as the South African economy.

A key point in their communication is that regulation should be fair and equitable on a model that one size does not fit all. In the same way that a small bed & breakfast does not follow the same regulation as a hotel, so home-sharing cannot be subjected to the same regulation as a bed & breakfast. Determining what should apply to all and what should apply only to certain categories, encourages fair treatment of the different realities and diversity in the market. Regulation should thus depend on the type of activity, rather than the platform on which the service is listed.

Airbnb cautioned against approaches that disregard the very real and already thriving home-sharing and experiences community. This would be detrimental to the destination, as South Africans have really embraced this opportunity and millions of guests have experienced the vibrant reality of South Africa beyond the picture that is traditionally presented to tourists – and keep returning for more.

They also caution against attempting to protect existing players in the market (e.g. hotels) since the absence of simplification and clear rules that apply to them, combined with the introduction of measures that will make the destination less accessible, will ultimately have the opposite result and end up hurting even those the legislation was aiming to protect.

Whether the Ministry of Tourism will in any way take the contents of the letter seriously remains to be seen and we can only be hopeful that Airbnb’s experiences worldwide will bring a sense of sanity to the minds of those proposing these Bill amendments.

The full content of the letter is downloadable at airbnbcitizen.com

Airbnb regulations – the wait continues

While the time is near when large numbers of tourists are expected to visit the Overberg, the wait continues for the planned changes to governmental regulations around The Tourism Amendment Bill and short-term rentals.

It is interesting to note the extent to which Airbnb itself has become a financial force to be reckoned with in the South African accommodation sector, but the potential for it to be negatively impacted is still very real.

A survey conducted by Airbnb, based on host earnings and guest spending for 2018, showed that Airbnb’s estimated direct economic impact in South Africa was about R1.018 billion. A list of the top 30 countries by revenue shows that South Africa entered the list at No. 22, ahead of Denmark, Switzerland, Austria and Argentina, but way behind Australia, Portugal, Greece and Croatia.

The survey was the sum of host earnings, based on internal Airbnb data, and estimated guest spending. The guest spending figures were based on nearly 12 000 responses to a voluntary survey, says Velma Corcoran, Airbnb’s country manager for sub-Saharan Africa. According to her, the organisation is helping to spread tourism benefits to families, communities and local businesses.

“It’s never been easier to travel to, and stay in, South Africa’s smaller towns. Visitors are discovering local hospitality and hidden gems they might otherwise have missed, while supporting new economies and revenue streams that help make local communities stronger,” says Corcoran.

She adds that there has been a significant increase in host earnings on Airbnb in smaller towns. “Mossel Bay, for example, saw a year-on-year increase of more than 80%, and Saldanha Bay saw an increase of almost 60% over the same period. Host earnings in Garden Route towns such as Knysna, Plettenberg Bay and George increased by 48%, 58% and 74% respectively.”

The survey found 84% of hosts recommended restaurants and cafes to guests; 69% recommended cultural activities such as museums and festivals; and 51% said Airbnb had helped them afford their homes.

The downside is that with oversupply and disillusionment, a decline in the number of Airbnb property owners is predicted. Airbnb is on shaky ground in many parts of the world, and it could be a matter of time before the trend loses favour with South African property owners.

There is already an oversupply of these properties in the country, and many owners have been left disillusioned due to the complexities involved in managing this rental system. For these reasons, real estate professionals predicted a decline in the number of properties purchased for Airbnb rental purposes in South Africa this year.

Hermanus is a classic example of how the rise in short-term rentals has made it almost impossible for residents to find long-term rental properties at affordable prices, while in other countries with regulations already in place, contraventions of local by-laws are being tested on a daily basis. Even though there has recently been a slight shift in the number of long-term rental properties available in Hermanus, these are still at the high end of the rental market and not where the real need exists.

The consequence is that there is little rental stock available for permanent residents and long-term rentals rocket. Some permanent residents are forced to live in adjacent towns and travel to work in Hermanus on a daily basis

Some of the regulations in place internationally would be a huge deterrent for South African hosts if they were to be implemented. In Denmark, Danish tax officials and Airbnb have an agreement that will ensure that short-term rental income in Denmark will be automatically reported to the authorities.

In Paris, you can’t rent an apartment for more than 120 days a year but you must first register your apartment with the local authority, which would have immediate tax implications. In London, you can host for a maximum of 90 days in a year, after which listings will become automatically unavailable on the Airbnb site as part of an agreement between Airbnb and the UK officials. Amsterdam has a maximum 30-day limit that a property can be rented out for.

Portugal has implemented more rigorous legislation and since 1 July 2017, properties posted on Airbnb, Booking.Com and other platforms need to be enrolled in the national tourism register, and property owners must fill in a required field with the registration number of their accommodation. The platforms will be subject to sanctions if they market non-registered properties.

Whichever way you look at it, if the SA Government does its homework thoroughly, it could attempt to make life very difficult for short-term rental hosts and this is bound to have a resounding effect on the entire tourist accommodation industry, especially in towns that are primarily tourist destinations, reliant on this source of income to survive and prosper.

The seasons are a-changing – prepare for guests

Anyone involved in the short-term rental market will tell you that it has been one of the quietest periods in a long time, which has taken its toll on cash reserves and property maintenance. We still have to remain hopeful that the tide will turn and with that will come the tourists to revel in what the Overberg has to offer.

During these off-season quiet periods it is opportune to take a hard, critical look at the property you have listed on one of the holiday rental portals (e.g. AirbnbBooking.cometc.).

Even though the supply of available rentals increased dramatically as the noose tightened around cash-strapped owners, and the number of visitors dwindled, many of these properties are not in an appropriate condition to warrant positive guest reviews and repeat bookings. In a market where there is an oversupply of accommodation, it is even more critical that your preparedness for guests outshines that of the other hosts.

Rather than wait for the first seasonal bookings and then do “necessary” maintenance of the property, start earlier and plan for this before it is too late. One of the biggest issues ends up being the availability of contractors as we get closer to year-end, when everyone suddenly wakes up to the work that needs to be done and cannot get the right level of workmanship timeously.

I am constantly reminded of wise words from decades ago when I was told “the world waits for no-one” – and never will a contractor wait for you when you have last-minute requests at their busiest time of the year.

As a simple guideline, take a good look at the exterior of the property and ask yourself: Will the type of guests I want find this appealing? Remember that first impressions are lasting and if you want to leverage referrals or repeat bookings, then guests need to be impressed from the outset.

Don’t ignore the condition and cleanliness of window frames, gutters, outdoor areas, pathways, driveways and gardens, as these are often the first aspects people notice when scouting for rentals. A negative impression could impact on bookings at the outset, never mind post-vacation reviews. It may be a better idea to get honest opinions from other “unbiased” people who appreciate the standards that you would be expected to provide for your guests.

One of the top priorities is the cleanliness of accommodation. I am constantly amazed at how much grit and grime still remains in homes after a “professional spring clean”. One just needs to look at areas such as behind toilets, the tops of extractor units, fins on fans, door handles, skirting boards, tracks of sliding/stackable doors, behind blinds and curtains, and on staircases. Don’t forget those areas that attract spider webs and then, the worst of all – kitchen appliances that appear to be clean but have grime in hidden places and crockery and cutlery that have not been properly cleaned.

Next in line for the critics is the quality of the linen and towels supplied. Of course the “comfortable bed” is a no-brainer for a holiday, but if the linen has become worn and faded then the time to update has arrived. And where so many establishments feel the need to follow the “trendsetters” and provide everything linen-related in white, remember that it is the colour most difficult to keep clean. Try bringing in some tastefully-chosen linen and towels in colours that will enhance the impact of the accommodation and are likely to have a longer lifespan.

The death knell for many guests is the amount of tasteless clutter that some people insist on displaying in their holiday rentals. Whilst these are often hand-me-downs from family members (even if they do have loads of sentimental value to you, your guests have no connection to them), make sure that they add appeal to your property rather than deflect from the positive aspects.

Family photographs and religious icons are a no-no. Ensure that you do not leave drawers full of old and broken kitchen utensils and that what you do leave for guests is in proper working order.

The one thing a holiday maker does not want is the hassle of keeping the accommodation clean with old, broken or semi-functional items like brooms, mops and vacuum cleaners, so ensure that those are in an acceptable condition.

Whether you have seasonal bookings yet or not, be prepared at all times to avoid the nightmare of dashing to find cleaners and maintenance providers at what is always their busiest time.

Surviving retirement – re-invent yourself

As the cold of mid-winter grips our town and tourists disappear from the scene, it is a good time to reflect on the impact that seasonal trends have on what is a holiday and retirement destination for many.

Surviving RetirementWe constantly hear conversations about the economic state of the town, province and country, and the financial challenges many business owners and retirees are facing at this time, yet they fail to realise that they themselves are a potential solution to some of these challenges.

Retirees in particular may have a source of income at their fingertips, yet either fail to identify it, or are unsure how to take the first steps into the unknown. The one factor that has changed worldwide is that retirees may no longer be in their late 60s and beyond, and deemed by large sections of society to have reached their sell-by date.

The South African political scene over the past 25 years has had such an impact on the careers of the baby boomer generation  (between 55 and 75 years of age) that there are many ‘pensioners’ in their mid-fifties to mid-sixties who find themselves excluded from employment opportunities, yet are not financially placed to spend years in the unemployment wilderness. South Africans have never been the best ‘savers for a rainy day’ and only a small percentage of the population is financially secure on reaching the ‘official’ retirement age.

The key to taking the reins and changing the situation for oneself is to start a process of ‘re-invention’, a metamorphosis which many may resist or avoid, for fear of the unknown. Nevertheless, it could be the source of more than just additional income, but also one of new challenges, social interactions and an unexpected new spark in your life.

The place to start is to identify all the skills and talents you have that could open doors for you. These could range from creative to financial, even to culinary, or you may have a community orientation where your life or work experience could afford you the base from which to launch your new-found persona. You may have hidden talents which could become a source of income if nurtured, and could trigger a new kind of satisfaction and excitement in your life.

Begin by looking at hobbies that you are particularly skilled at, or ideas you have had an interest in exploring, but never pursued. Don’t ignore the career skills you may have developed and used over the decades, as they may still be of value to others. You just need to identify the need and get the message out. Create a platform either via social media or some other method of communication and let the world out there know what you are capable of.

Focus on those attributes which you may never have considered revenue-generating options but could, in fact, be just that. Avoid self-induced objections, like “so many others are doing that”, as you cannot be the judge of whether they are as good or as creative or as talented as you are. One thing to remember is that in a town like this, social media and, to a lesser extent, print media, are what drive everyday communication amongst residents and businesses, and, like it or not, they are as much a reality of life as is the cell phone.

I am constantly amused by how many people of an advanced age have resisted embracing technology, yet have taken to smart phones with such enthusiasm that they themselves (and their offspring) find it difficult to believe how adept they have become. Yes, it may take you out of your comfort zone for a while but that is often necessary, to clear the head and consider what a life shift could do for you. Any small change could be a form of re-invention and if you can adapt to the world of technology then you can surely adapt to a world where you use your hobbies, educational and creative talents to your own and others’ advantage.

To Retire does not mean To Expire. On the contrary, it may just be the impetus you need to usher in an exciting new phase of your life that could enhance everything, from your social and financial well-being, to your lifestyle and outlook on life. Take a good look at all your strengths and work them to your advantage.

Retirement: Are you ready to scale down?

The cycle of life becomes very interesting as one gets older and hindsight proves to be the “exact science” that people talk about when reflecting on the past. We spend so many years accumulating “stuff” as we build our careers, homes, families and assets – and then one day we reach that point where it’s time to scale down and simplify our lives in so many different ways.

Most of us have some kind of emotional and sentimental attachment to many of the items we have accumulated in our lifetimes, yet so often a large portion of those sit well hidden in the back of a cupboard, storeroom, in a loft or garage, doing nothing but gather dust and triggering the occasional memory when we stumble across one thing whilst looking for another.

We have observed so many fascinating and humorous conversations between spouses who are deciding on what to do with the accumulation of everything from clothing to ornaments, crockery and cutlery (especially all those sets that were inherited decades earlier and never used), children’s toys and mementos of days gone by that also remain hidden in boxes for some eventual awakening in the distant future.

The only problem is that you wake up one day and the distant future suddenly becomes your today. And when you decide that you no longer want the hassles, frustrations and unjustifiable expenses of living in larger homes and properties, which have become storage facilities filled with clutter and memories, you are then faced with the daunting challenge of deciding what to do with it all.

Most people do not fully appreciate the importance of understanding how to deal with this process, which can be anything from inspiring, enlightening and uplifting to the other end of the spectrum where trauma, emotional upheaval and panic kick in. The first question you need to ask yourself is: “Am I ready for this?”

You only need to watch one episode of any of the plethora of TV series that focus on the impact of hoarding to know that this is a very difficult set of circumstances to deal with, particularly when it coincides with that time in your life where you both want and need to remove extraneous items from your living space.

Hoarding is a distant relative of “collecting”, “stockpiling” or “accumulating”; yet the three words have very different meanings and connotations, some very positive and some very negative.

We recently observed a situation where a client was upbeat about the fact that they had reached that stage in their lives where they could start the scaling-down process and simplify their living conditions and responsibilities. All the plans were laid out, ideas were thrown around and decisions taken as to what would remain, what would be “archived” and what would either be sold or donated to charity.

The change was going to be very dramatic by anyone’s measure, yet the client was all for it. Within a very short space of time, however, the emotional impact was so overwhelming that they halted their plans in order to reconsider their initial decisions.

Having spent the past two years going through a few iterations of “scaling down” ourselves, we could fully appreciate the dynamics of the client’s experience. We reduced the amount of “everything” we possessed to reach a place in our lives where we had what we needed rather than what we wanted. The experience of minimising our living space and possessions has been beyond invigorating, somewhat like removing weight from your shoulders and being left with the sensation of having light wings with which you can fly.

But the key to this is that we were mentally ready for it, understood the implications and embraced the experience, whilst at the same time saying farewell to more accumulated “stuff” than we may have initially intended to. What is very important to realise in this process is that whilst you may be reducing the clutter factor, you will not be doing away with the memories related to those items – and that, in our opinion, is what matters most. It does become a “mind over matter” scenario and one clearly needs to be mentally and emotionally prepared for the upheaval.

We took a hard line on the decluttering process and for months we lived with the best advice anyone ever gave us: “If it hasn’t been seen, used, touched or thought of in the past year, it is time to remove it from your life”. Whilst this is still a difficult process, it proved to be the best decision we could have made and with each passing day we felt less encumbered and more relieved. All in all, it has been a stimulating experience which has set the scene for an uncluttered future.