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Elite Havens CEO: Why luxury villa rentals are the right format post-COVID

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This article is part of our Rental Scale-Up vacation rental management conference series. This is an extract from our May 2020 conference: “How villa and holiday rental managers are navigating the COVID-19 crisis in Southeast Asia and Oceania.”

Vacation Rental Management Conference: Elite Havens’ Jon Stonham

Jon is CEO of Elite Havens, Asia’s largest luxury villa management and marketing company. Established in 1998, Elite Havens features a spectacular handpicked portfolio of more than 300 private luxury villas in Bali, Lombok, Phuket, Koh Samui, Sri Lanka, Japan, India and the Maldives. The principles of consistency, personalised service, attention to detail, and secure bookings are the foundations of Elite Havens’ long-term success. Prior to Elite Havens Jon founded one of the region’s first OTAs, asiahotels.com, which he sold to Orbitz in 2005. Elite Havens was sold to Dusit Hospitality Group in 2018.

Vacation Rental Management Conference: Video From The 2020 Southeast Asia & Oceania Conference

  • Elite Havens’ guests are usually families – often multigenerational or extended families.
  • They also receive a lot of group business, like wellness retreats.
  • The villas also host hundreds of weddings per year.
  • Over the last 10 years, Elite Havens’ business has shifted from mostly European guests to now more guests from Asia and Russia.
  • Elite Havens has guests staying at their properties right now, usually for long-term stays whether to “hide out” during the pandemic because they don’t want to be in their home city or country. Some guests cannot go home because borders have been closed in their home country.
  • Jon believes a villa is a good alternative to a hotel from a social distancing perspective. You can enjoy your own personal space and avoid interacting with people beyond your family.
  • Jon believes families will be the last group to rebound. Parents will be hesitant to travel with kids before they know it’s 100% save.
    • He thinks young people in groups will be quick to rebound. They’re more risk averse and miss social contact. Villas offer a perfect setting for social gatherings in a secure place.
  • A big factor in the future of travel is governmental restrictions. Not only in the country you’re traveling to, but what you need to do when you come back. Even if people can travel to Bali, for example, you might need to quarantine for 14 days when you return home, which nobody wants to do.
  • Air travel is also a piece of the puzzle – we need to be able to rely on flight schedules, otherwise there’s the potential to get stranded.
  • Another hurdle to cross is the potential that tourists could be spreading the virus, which would endanger property staff.
  • Jon’s properties have always upheld high standards for hygiene and cleanliness, so that hasn’t changed. But now interaction with guests has changed. Elite Havens always wants to provide the level of service that the guest wants, and lately they’re noticing that guests would prefer to be left alone or have less personal contact with staff. 
  • Jon’s advice to property managers getting through their first crisis is to remember that people have very short memories. The industry is always changing – after SARS, MERS, financial crises, etc., people always start traveling again.
    • But maybe after the coronavirus crisis guests will shift away from hotels and toward villas, but the hotel industry certainly won’t disappear entirely.

Vacation Rental Management Conference: Full Conversation Between Jon Stonham And Thibault Masson

Thibault:

Dear RentalScaleUp club members, thank you for joining us. Now I am with Jon Stonham. John is the CEO of Elite Havens. As you may know, Elite Havens is the biggest, largest Villa rental management company in Asia. So it’s a great pleasure to have Jon here. And first, how are you?

Jon:

I’m very well thank you. A little bored of being at home.

Thibault:

So it’s a pleasure to have you because we’ll be able to cover some great interesting topics together. And of course we were talking about what your business is because it’s, it’s a very interesting business which touches upon Villas, luxury and the whole region. But also we’ll be talking about the road to recovery to COVID-19, right? Who’s going to be traveling first? What the expectations will be now, I think it would be very different or somewhat different. Who will be traveling first, as I said, convenience of age for example. And then we talk about, for example, the advantages of villas. Why would villas be a good place to capture this new demand coming up? And then also we finish with a notion of standards. When we talk about luxury, for example, luxury villas, obviously standards have always been there, but what’s new here and what again how’s it going to play out to capture this new demand coming up? That’s going to be very interesting to hear. So John, maybe can you share a bit about your business?

Jon:

Okay, well, Elite Havens is yeah, probably the largest luxury villa rental company in Asia. We have properties in Thailand, Indonesia, Japan, Maldives, Sri Lanka. And the hot news at the moment is we’re just moving into India in the last couple of weeks. So we now have properties in Goa and outside Mumbai. All the properties are luxury properties and the fact that they’re the top-end villas. We’re very careful about what we choose. They’re all fully staffed. And they’re all privately owned as well. So effectively, someone builds a second home, they give us the keys, we look after it, and we rent it out on a, on a, on a global basis for them. And so we have just over 300 properties across the whole region. We manage the properties and we market the properties. And we’ve been doing it now for, since 1998, so for 22 years

Thibault:

And in, in normal circumstances who are, who will be your guests into the, of makeup or, or for origins who are the guests of Elite Havens?

Jon:

Yeah, I mean, the vast majority of our guests, you know, 80, 85% of families and either individual family units or multiple families holidaying together or multigenerational families, you know, so if you look at it and say an Indian client, it’s not, it’s not unusual for the whole extended family to come. And a villa is that perfect environment for them to do that. You know, you have that luxury of having your own private space. You, you have the luxury of being flexible. So, so for families it’s, it’s really the perfect venue. The second biggest group probably is, is groups, you know and that will be groups of friends, you know, whether they’re coming on a golfing holiday or they’re coming on a wellness retreat or just just getting together. And the third biggest market for us is actually private weddings.

Jon:

We hold something like 450 weddings a year in our villas. And so it’s a very private and a very personal experience and a villa works well for that. So those are the biggest markets in terms of geography. Wow. It’s changed dramatically in the last 10 years. So 10 years ago, Europe was a big market. And as Europe has had its catastrophes financially that’s been replaced by Asia. So our biggest market in Asia is actually Mainland China for say Thailand. Our biggest market for Bali is Australia. And then, you know, all the other constituent countries within Asia. I have a very strong supply side. Russia, the middle East, both strong supporters of the villa concepts. They like privacy, they like personal service. They like the chefs, they like to like everything a hotel does, but they want it for themselves. And so those are the, so geographically we actually have about 120 countries, but those are the main countries which use them now.

Thibault:

Hmm. Thanks for sharing John about this. So you really have this regional footprint that’s extending, just heard and thanks for sharing as well as the makeup of your I would say, usual guests, families, groups, private weddings are super clear. So what’s happening right now? What do you do, do you have guests staying right now at your place and how are your places and how different are they from these usual groups?

Jon:

Yes, we do have guests. And I wouldn’t say there are normal guests. Most of our guests are hiding from Corona or a COVID. And they’re looking for a place to stay long-term just to bunk it down. In some cases it’s because they don’t want to go home. In some cases it’s because they haven’t been able to go home. So for example, a lot of our Russian guests in the moment do not want to go back to Russia. Whereas some of our Australian guests actually can’t get back. So we probably have, you know, 20 or 30 villas, which are full at the moment and they’re full with long term guests, but they’re very much not our client. You know, they’re either an individual who wanted to get away from a hotel just wanted some personal space. I don’t think we have any family staying with us at the moment. It’s usually individuals or a couple of individuals who are staying and it’s usually just to escape. And they want to have the, I guess the social distancing, but in a very comfortable environment. Very different from our normal clientele.

Thibault:

And talking about the road to recovery again, we mentioned you had families, groups and, and, and weddings prior to this happening. And so who do you think is going to come first? I think I have an idea that’s, it could be some certain groups coming back and enjoying the Villa among themselves. So can you, can you share about your view, what’s going to happen and who will be these, these first travelers?

Jon:

Yeah, I think, I think that the main thing we’re learning or it seems to be sort of coming out is that the Villa is a good alternative to a hotel. You know, you have the group, constituent group staying there is your group of friends. So it’s, it’s, it’s social distancing already. You’re, you’re not in a mass market environment where a hotel where you don’t actually know who the other guests are. You don’t know where the guests have been. You may even, you know, you don’t even know where the staff have been. Okay. So with a Villa, you know, you have your own personal space for a group review. And I think people are now perceiving that as being the way to go in terms of to get a holiday, but to have not just the luxury of privacy, but the safety of privacy.

Jon:

And people are saying, well, okay, that’s a good environment for me to bring my family. I think what we’re seeing, I mean, we’re seeing bookings for next year already. Mainly the first group of people are doing bookings at the moment are weddings because people plan quite a long way ahead. And I think most people who are doing their wedding saying, well, I think this is probably going to be over by next year, so I’m going to plan my wedding. I think the last group we’re going to see coming back is families. I think most parents are going to be a little bit more risk-averse. And so the actual act of traveling will only happen when they feel it’s safe now when it’s safe. You know, that’s a good question. We are seeing bookings for Christmas already. In fact we were getting quite busy for Christmas.

Jon:

I think people perceive that that might be the time to travel. I think the first group which we’ll see traveling or the younger generation. When we were talking earlier, I mentioned I’ve got a 21 year old daughter. She would be on an airplane tomorrow. She thinks she’s indestructible. She thinks this coronavirus is a complete pain up the backside for her and it’s actually a constraint on our social life. And so I think we’ll find that the younger generation who are more at risk you know, that, that, that, that, that happy to take those risks, they’ll travel first. And I think they’ll travel in groups because one of the things they’ve missed is this personal contact. No, we’re all Zoomed-up. We’re all on teamed-up. We’re all Skyped-up and actually I think they’d like to meet face to face.

Jon:

And so I think we’re finding that the first lift would be the younger generation who want to get together in an environment. And a villa is not only good value when you start looking at that sort of group, but it’s also secure and safe. And gives them, gives them a location where they can enjoy themselves. So I think 20 to 35 year olds, we’ll see traveling first. We’re already seeing that in China. It’s that age group, which is now really wanting to travel. So I think it’s going to be the younger generation who travels first. I think the families will come last when they’re ready.

Thibault:

And John, you started touching upon China, young Chinese travelers chatting first. So in terms of let’s say our regions you know of countries of origins or destinations, what, what, what are you seeing, what you think is going to be happening?

Jon:

Yeah, I think, I think the speed and, and, and the destinations which will open up and, and who comes is going to be a number of factors. You know, if we take Bali, Bali has actually had a relatively easy ride from this COVID. If you look at it, there’s not been many infections. There’s not, the hospitals have not been overrun. It’s actually done very, very well. And I think a lot of that has to do with the fact that it’s natural sort of banjo system in Bali, has meant that their social distancing has been controlled at a, at a very local level. And to be honest, Bali’s population growth happens when the tourists come. And so as soon as all the tourists left, actually the numbers of people in Bali was relatively small. So they’ve got social distancing down to a T and they’ve got it down to the level.

Jon:

So as a destination, Bali is sort of not had much problem and therefore it’s really open for business. The question is who’s going to come. And that’s going to be dictated by several factors. I think the biggest factor is governments when they’re going to let people travel internationally. And it’s not where they’re going to let them travel. It’s what they’re going to do when they come back. So for example, you know, you might leave Australia but you won’t be welcomed back. I can leave Singapore, but I can come back, but then I have to go into 14 days quarantine so, so I think until we start to understand what governments are going to do, there’s no point in going on a week’s holiday. If when you get back, you’re gonna spend two weeks locked up again. And in some cases like Singapore, you’re locked up in a government institution, for want of a better word.

Jon:

You can’t even be locked up at home sort of thing. So, I think the first thing dictating who’s going to be first will be dictated by governments. And, and that will then give people the confidence to be able to travel. Which countries will go first. I mean, China wants to go. And I think the other end of the spectrum is people being confident that the guests coming are also risk-free. So, you know, each of our villas has, let’s say 12 staff. It’s true to say that over the last three or four months, those staff have been very concerned about who’s staying in our villas because the last thing they want to do is catch something and then take it back to their families. So they’ve got to be confident that the guest who’s coming to stay with them, it’s not going to be a threat to the local community.

Jon:

And it works. So it works both ways. So there’s a lot of pieces to the jigsaw which sort of have to fit together. You know, what governments are doing. Those people who want to travel. And a risk to travel and those people who are looking after them and wanting to look after them. Now and then the airlines, I mean I know the airlines are desperate to get in the air because at the end of the day they’re not making any money sitting on the ground. But again, you know which airlines are flying, which routes and can we rely on those flights? Right at the beginning when this happened, there are lot of people got stranded because they couldn’t get home because flights were being canceled. So, all of those pieces have to fit together to make travel work again.

Thibault:

And, and I like the way you just covered the jigsaw, and how things have to fall into place. And I will just chime in with my own example of my Villa in Bali as you said, right? If people don’t know what bans are, as you mentioned, it’s like this local village organization really that has a lot of power, right? In Bali. They can decide all kinds of things about life in the village. And the case of my properties, basically this like there’s one road going through the village and leading then to the villa and the local bajar has blocked the road because of course they are able to fill his shoes to quarantine itself, but assuming that they will not welcoming tourists to any Villa that could be a risk to them. So just a perfect example as you said, of people protecting themselves and also because tourists can be seen as a threat to the community, which is fair enough.

Thibault:

And just something we’ve actually seen many countries like in, in, in the US, people being pushed back from Sonoma County. So it’s, it’s something that’s happening everywhere and it’s really part of the global jigsaw is a great analogy. Another point here about the villas, luxury villas. Are you talking about the staff, for example? But in the end, the fact that I think every, obviously Villa in your portfolio has been handpicked and inspected, right? So the notion of standards and trust in the cleanness standards, for example, is very important nowadays. But I don’t think a luxury Villa companies like yours have waited a big, this new pandemic to have very demanding standards. So how do you think, what actions have you taken for your own business? For example, with the staff in new villas and, and again, how do you think this, let’s say increase in, in, in cleaning standards will, will affect the trust that guests may have in your villas?

Jon:

Yeah, you’re right. I mean, we, we didn’t have dirty villas beforehand. We don’t have dirty villas now. You know, when you’re renting luxury veteran, you’re paying you know, the money you pay to stay with us, you expect very, very high standards, the same standards as you get in a five star hotel or better. So to balance our SOP is on cleanliness, it hasn’t changed. What we’ve done is we’ve reinforced them. We’ve reinforced our training. We’ve reinforced our training on both hygiene and cleanliness and the importance of it. But our staff know that. Because they’ve been living with that day to day where we’ve probably had to educate people more

Jon:

Really what they do when they leave the Villa. So, you know, you’re, if your chef is going to leave the villa going home, making sure he maintains the standards that we expect in the Villa in his home life as well. And what we’re finding actually is operationally we’re finding a lot more staff are living in the Villa and staying on site with the guests. And we, you know, we have the villas in Asia designed, so there’s a separate area for the staff. It’s right there, you know, we’re used to that in Asia. And, and so then they’re saying, well actually I choose to stay in the Villa mainly because I don’t want to spread anything to the guests. And so I want to make sure that the experience we give to the guests is safe. And I’m not going to be taking anything, you know, from the village, let’s say, into the Villa.

Jon:

But yeah, our SOP is, our cleanliness hasn’t changed. Our SOPs on hygiene haven’t changed. What has changed a little bit is our interaction with the guests. Now as a company, we’ve always prided ourselves in trying to get the service that the guest wants and guests want different things. So we have some guests who stay with us and they really do not want to see a member of staff. They just want total privacy in the Villa. And when they need a member of staff, I go and find them. And we have a guest on the other extreme who just wants to be waited on hand and foot and they want the staff there permanently and they want full-on service round the clock. Okay. And so we’re used to sort of feeling out guests and finding out what they want and adjusting our service accordingly.

Jon:

And this is the same now, you know, does, does the guest want us to wear a mask? The use of masks is happening more and more. And, and a lot of our guests are saying, actually I’m very happy for the staff not to wear masks cause I’ve had the same member of staff for the last 14 days. I know they’ve been staying in the Villa. And so therefore I don’t really need that. And then also to do a service, you know, some guests would like at a time to be served, wine poured and people were, you know, people, they’re making sure that they’re getting full service. Other guests are now saying, look, leave the food on the table. We serve ourselves. We’ll let you know, we’ll be finished and then you can clear away. And so I think really being in tune with the guest is probably the area where we focus more. It’s not something new to us because we’ve always done it. We’ve just had to reinforce the reasons why we’re doing it and the reasons why guests might be slightly more sensitive to it than in, than in previous times. But the ultimate luxury is, guests getting what they want, when they want, how they want, you know, that’s, that’s luxury. And, and so, so we, we’ve been doing that for many, many years.

Thibault:

And John, my last question then today would be it’s not been the first crisis that the company has gone through. You know SARS and MERS and volcanoes erupting, things happen. So what would be your advice for a property manager who’s, it’s, it’s magic. It’s been their first crisis ever the first time. So what we, the advice for, for the property managers, how, how they should be using this time right now. How should you think about the future?

Jon:

Yeah, it’s a really interesting question. I think one of the things I remember is, I’m, you know, I’m, I’m old, I’ve been around a long time and I’ve seen, as you say, SARS, MERS, financial crisis is all these things over the years. One of the things I always say to people is that people have very short memories. You know, we’re in the middle of the crisis at the moment and it’s very difficult to see a route out of it. But when we come out of it, people do have very, very short memories. And will it change a lot? You know, there’s a lot of people saying that they think travel would change enormously. Travel is constantly changing and it’s going on a journey, whether it’s to do with you know the environment or whether it’s to do with you know society putting pressure on how much we travel and CO2 emissions, what, you know, there’s a constant change in travel.

Jon:

That’s always there. But we’re built to travel. People are built to explore the world, so travel will come back. I have no doubt about that. What I am clear on there is that our sector of travel, I think we’ll benefit. I think people will experience, you know, private Villa accommodation and they’ll do, they’ll see the benefits of it, whether it’s value or whether it’s privacy or whether it’s safety. They’ll see the benefits of that and that, and we’ll stick to it. And, and turn more away from let’s say, hotels. But you know, people are saying that the hotel buffet will disappear forever. It won’t, it’ll come back. It might be a bit different in the future. I think one of the things I have noticed about this particular event, you know, SARS came back very quickly. It was over and back and, and, and, and, and there was a real boom three months after SARS. It’s very clear that COVID is longer, deeper, wider than anything we’ve ever experienced. And so therefore I think we’ve got a longer journey to follow. But things will go back to normal. It just may take a little bit of time.

Thibault:

That’s wise advice. I mean optimistic but also wise advice from you. So I’m Jon Stonham, CEO of Elite Havens. Thank you so much for your time today. If people want to contact you, what’s the best way to reach you?

Jon:

Yeah, I mean by email is probably by far the best way. And now I’m at home. I’m getting a lot more emails answered than I normally do. So I’m very happy to contact you by email. I’m very happy for you to give out my email address to people if they contact you.

Thibault:

Okay. So we’ll make sure to put it as a contact. Will contact me first and then will send information back to you. Once again, thank you so much for your time and have a nice day in Singapore.

Jon:

Been an absolute pleasure.

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