Recommendations for Holiday 2017
WIMCO is in a unique position to assess the health of the market. We now represent over 344 villas for rent on St Barths (not including those under renovation and thus not available),
and we track availability in each one, regardless of the source of the booking. This gives us a comprehensive (although not complete) view of rental activity on the island. Here is what we saw:
- Number of holiday nights rented declined by 8.7%, despite a 7% increase in the number of villas available to rent.
- The expansion in available room nights means you have less leverage to hold out for a premium price, or for stays of more than 10 nights.
- Average nights rented for a holiday booking was 9.0, a 7.5% decline from 9.7 nights last year.
- Only 21% of all villas tracked received rentals of 11+ nights (probably even lower than that as some “owner direct bookings” were actually the villa owners themselves staying in the villa)
- Holding out for 11+ nights proved disastrous for many villa owners.
- For owners who held out for 14 nights the avg discount was 14.4%, a loss of 2 nights.
- For owners who held out for 11-13 nights the avg discount was 11.5%, a loss of 1-2 nights.
- Last minute bookings in December had an average discount off retail price of 25%. The discount rate of price for November bookings was 12%.
- Many of villas in the ultra-premium price tier went unrented this year
Where the Holidays Fall; How that Impacts Length of Stay
The calendar changes year by year. For example:
Note: a full 50% of clients arrive after December 25th, a limiting factor length on stay.
How Less than Optimal Holiday Pricing Impacts Reservations
Realizing maximum revenues for this season will not be achieved by waiting for a full priced offer for the maximum number of nights.
FACT: from September on, bookings made in each month show an increasing discount from list price.
FACT: between March and December, the number of nights booked decreases as Holiday Period approaches.
Between March and December, the number of nights booked decrease as the Holiday Period approaches.
Between March and December, the price accepted also declines as the Holiday period approaches.
Many owners discount their prices. The discounts appear small, rising to just under 20% by December.
Yet, the combination of fewer days and greater discounts results in a dramatic total discount, in excess of 51%.
In the example below, a villa is seeking $38,000 per week (the holiday rate) and looking for 14 nights.
FACT: if your villa is not booked by July, you will likely be accepting as much as a 25% - 50% discount.
Why not take an appropriate discount in July, rather than risk collecting less at the last minute?
Many clients requested more reasonable rates prior to September, or opted for other destinations
(or in many cases waited for discounted rates in December).
Minimum Night Stays: 10 Nights Recommended
FACT: average number of nights for holiday rentals this past season was 9.7 nights. Few villas were successful in holding out for 14 nights, and many villas turned down 10 night requests in the summer and fall, (which in most cases would have generated more revenue than was ultimately achieved.)
. We forecast that most clients will request Saturday Dec 23 to Tuesday, January 2.(checking out the morning of Jan 3), 8 nights. We recommend that villa owners set a 10-night minimum stay, then revisit that number in late September / early October if necessary.
We need pricing in place now to process inquiries for you, so we have rolled over the Dec 2016
price list to Dec 2017 for all villas.
If you wish to change your prices, you may log in to the WIMCO Villas owners' portal at portal.wimco.com. We welcome the opportunity to consult with you on pricing as well.
In Summary: Moderation Recommended
This year we encountered more resistance to holiday rental pricing than in any year in recent memory. St. Barths has and will continue to have cachet, however, the holiday price premium in place on St. Barths versus other islands, and versus the winter season pricing, has led many clients to seek alternative destinations. We are available to discuss this in more detail as it relates to your villa, and want to thank you for your continued support and partnership.