Holiday lets are the investment opportunity of the decade … here’s why ….

by Vanessa Warwick

10:36 AM, 22nd November 2011
About 8 years ago

Holiday lets are the investment opportunity of the decade … here’s why ….

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Holiday lets are the investment opportunity of the decade … here’s why ….

I’m an unashamed fan of U.K. coastal holiday lets. My husband Nick and I first started investing in them in 2008 as we saw the economic climate deteriorating and reckoned that people would start holidaying at home again. We’re now the proud owners of two high-occupancy holiday lets – one on the island of Portland in Dorset, home of the 2012 Olympic Sailing events, and one at an award-winning development at Camber Sands in E. Sussex, one of the U.K.’s finest sandy beaches.

I believe that, as we approach 2012, we are entering a “golden age of holiday lets”. Allow me to explain.

Recent news suggests that aviation fuel price hikes and new legislation and taxes are going to dramatically increase airfares in 2012. Combine that with social and political unrest in such traditional holiday destinations as Greece, Turkey, and Egypt, and you have some very compelling reasons for holidaying in the U.K.

On top of that, we have the Olympic Games in 2012 along with various other high profile sporting events, and the World Athletic Championships has been confirmed for London for 2015. International focus is very much on the U.K. over the coming years.

There is also a noticeable rise of the “stay-cation”; people are taking several shorter holidays as opposed to one long summer holiday. This is good news for holiday lets close to areas of high population density, such as London, as you can tap into the “long weekenders” market, all year round.

Additionally, it is worth noting that holiday lets are a global marketplace and portals such as Holidaylettings.co.uk and HomeAway allow you to tap into this huge arena at a very nominal cost.

In times of recession, people also turn to nostalgia to comfort them (The new British Airways advert is a great example of this). This again is good for U.K. holiday lets. We all remember childhood holidays of building sandcastles on the beach, donkey rides, and playing amongst rock pools, well now we can take our own children to a U.K. beach to experience this, and re-live our own happy memories in the process!

Wherever you are in the U.K., you are only a maximum of 73 miles from the sea. We’re an island nation and we’re slowly rediscovering our beautiful coast and realising that holidaying at home has a great deal to offer, whatever the weather.

This picture of the stunning beach at Camber Sands is one such example:

Despite all this, we, as holiday let owners, cannot rest on our marketing laurels! It is a competitive marketplace and only the best will achieve above-average occupancy.

We do use an agent for our holiday lets (the excellent Richard Smith of Beside the Sea), but we also augment that with our own marketing efforts.

It might surprise you, but when it comes to marketing holiday lets, we can draw some parallels with the fashion industry. You should always be working one season ahead and you also need to engage “lifestyle aspiration”. Just like people buy clothes with their eyes and hope to emulate celebrities, they also “buy” their holiday with their eyes and hope to emulate a certain lifestyle, and this is something you can tap into.

There is a phenomenon known as “anticipation happiness”, something I came across recently in an interesting article.

It was about some research into when people are happiest, and this little paragraph below caught my eye:

“… When doing a study of vacationers, the happiest people were the ones in the weeks leading up to a vacation. It was all about anticipation. Again, it looks like our brain rewards us more for working toward a goal than for actually arriving there. The study actually suggests taking more frequent, shorter vacations. You know, so you can spend more time anticipating them”.

So your holiday let marketing needs to engage this by using great photos, video tours, and also framing written content around your holiday let that allows the prospective guest to imagine themselves there. This is a sure-fire and proven way to fill your low season months and increase your cash flow. It certainly worked for us anyway!

This picture has proven to be a winner for us:

The way we did this was to create a marketing “matrix” for each property.

First of all, we created a calendar of events in the area throughout the year, and also seasonal events like Valentine’s Day, Mother’s Day, Bonfire Night, Christmas, New Year etc.

On the second layer of the matrix we listed all the attributes, or shall we say “assets” of our holiday let, such as “adjacent to amazing beach”, “1.5 hour drive from central London”, “watersports mecca”, “40 golf courses in 30 miles radius”, “birdwatching”, “area of outstanding natural beauty”, “close to historic town of Rye”, “close to 1066 attractions”, “sunniest part of the U.K” , “fine dining on the doorstep” and so on.

On the third layer of the matrix, we then listed ideas for “packages” such as “Valentines Weekend” where you would arrive at the cottage and find a bottle of champagne, some chocolates, and some roses.

Working approx. 6 weeks ahead, we then created blogs and marketing material around the events, focusing on the “assets” that this allowed us to highlight.

We also used some different photography. For instance, for Christmas, we found a picture of the beach at Camber Sands covered in snow.

This allowed us to frame a blog and marketing material around spending Christmas in a cosy cottage and going for long, bracing walks on the beach. We also showed photos of our cottage with Christmas decorations and gave the option to have a COOK! Christmas dinner included in the package. It’s important to note that “the most up to date information is always the most relevant” – therefore there is no point in your website or marketing never changing to reflect the seasons.

All these efforts led to 100% occupancy from May to mid-October, an average of 3 weekends booked per month in low season, Christmas and New Year bookings, and we’ve recently taken our first Summer 2012 booking!

So, there is holiday lets gold to be had, if you are prepared to make that little bit of extra effort, and also create a high-class product and guest experience – but that’s another blog. 🙂

Finally, on the subject of holiday lets, it’s worth checking out this recent video I recorded about a small window of opportunity for anyone with U.K. or E.U. holiday lets to claim a potentially significant tax rebate. I have, and I recorded this interview to let others know so that you can do the same.

If you want to contact Amit fo find out more, his email address is a.prasanna@gp-ca.com

Thank you for reading my blog, and if you have any questions about holiday lets, or indeed anything to do with property investment, please feel free to post them on the Property Tribes forum, the U.K.’s busiest landlord and investor community that I founded with my husband Nick. It’s free to join and you’ll find it a very professional, friendly, and supportive place where Landlords happily share information, strategies, and best practice for the greater good of the community.

You can also find more of my property musings at my blog at www.yulpa.com/blog


Vanessa Warwick is a former TV presenter turned professional Landlord, consultant, and speaker. Along with her husband Nick Tadd, she founded Property Tribes, which is now the U.K.’s busiest online Landlord and investor community. Nick and Vanessa have just launched their new tech product, Yulpa, an on-line “property office/filo-fax” that helps you organise and manage your entire property life in one place. It comes with an iPhone app that does auto due diligence on any property being considered for purchase. Vanessa and Nick have a portfolio of high end apartments in North and East London, family houses in the South East, holiday lets on the South Coast, and a penthouse apartment in Larnaca, Cyprus.

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Comments

12:08 PM, 23rd November 2011
About 8 years ago

What a great article with very relevant points on the marketing matrix. I particularly like the use of images to help create anticipation and the suggestion that marketing needs to change to match the seasons. I'll be linking to the article in a blog post this week, and will send you the link

12:20 PM, 23rd November 2011
About 8 years ago

Technically running a holiday let is NOT a trade (as your expert says it is many time sin this interview). Furnished holiday lettings attract some special tax reliefs, as if the letting was a trade (but it is not actually a trade). I think you should make this clear as this fact it has other tax implications - eg inheritance tax. http://www.leftley-rowe.co.uk/documents/Property%20tax%20booklet.pdf explains this quite well.

Vanessa Warwick

12:26 PM, 23rd November 2011
About 8 years ago

Thank you so much for commenting Heather, and for the kind offer to link to this blog.

I get so excited when talking about holiday lets! I just can't help it! It's very gratifying to help create happy memories for people, so I think we have to take the mentality more of a hotelier and think of our customers as "guests".

We also allow pets in our holiday lets, which has increased occupancy. People do not want to stress their pet out by putting it in kennels (or pay the high costs of doing so), so many people like the option to bring their pet - cat or dog - on holiday with them. We charge an extra cleaning fee if pets are staying, but we also include a treat for the pet in the Welcome Pack. The little touches make such a difference to the overall experience.

Holiday lets get traction from repeat bookings and word of mouth, so satisfy your guests, and you will find bookings coming in. You can then take your foot off the marketing pedal a bit!

Hope to see you on Property Tribes soon!

Vanessa Warwick

12:34 PM, 23rd November 2011
About 8 years ago

Thank you for commenting John. I will ask Amit, the accountant featured in the video, to respond & clarify as I am not a tax expert. 🙂

12:47 PM, 23rd November 2011
About 8 years ago

Re: holiday lets being treated as a 'trade'

John - thanks for your comment. You are quite right, and I should clarify that in the video I was referring to the treatment of losses and capital allowances being treated 'similar to a trade'.

13:02 PM, 23rd November 2011
About 8 years ago

Thanks guys - by the way I really like that matrix idea and will be having a long think about it later!

Vanessa Warwick

13:08 PM, 23rd November 2011
About 8 years ago

John, the matrix is a bit of a "ball ache*" to do. (*Using one of my husband's expressions). But once you have done it, you have a plan to work to that you can just replicate every year, with a few minor tweaks if necessary.

It's a really good exercise to do to create vertical marketing streams, as "niche" is always good in marketing. You can dramatically increase occupancy and the season.

And remember, there's no such thing as bad weather ... only inappropriate clothing. So the weather cannot spoil a U.K. holiday if guests come prepared!

Ian Ringrose

14:47 PM, 23rd November 2011
About 8 years ago

Thanks for revealing how to get such good occupancy. (No one will ever claim you are a passive investor!)

How do you know what price to set each week?

Vanessa Warwick

15:01 PM, 23rd November 2011
About 8 years ago

Ian, thanks for commenting.

A long time ago, in a galaxy far, far away, there was a property investor called Vanessa who thought she could buy loads of houses and then go and relax on a beach ... ".

FAT CHANCE! 🙂

There is no such thing as a "passive property investor" in my book.

Ref: weekly pricing. The market determines it. See what other people are offering that is of a same standard and then try it in the market place and fine tune according to results.


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