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Vacation Rental Management Conference: Luxury villa rental management company Villa Finder on Asia-Pacific trends

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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: Villa Finder’s Daniel Rouquette

Daniel manages Villa Finder, a Singapore-based platform with more than 2,000 private villas across 12 countries in the Asia Pacific and now also in Europe. Villa Finder directly represents 100 villa owners in Bali. Being extremely customer-focused, he insists on talking to clients directly on the phone and personally visiting the villas in our collection. Daniel co-founded the company in 2012, he is a graduate from EDHEC Business School in France with a passion for entrepreneurial projects which led him to Singapore in 2010.

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

  • Villa Finder focuses on bringing value not only to travelers and property owners, but also to the entire vacation rental industry by publishing market studies and reports.
  • There is a lot of vacation rental data available for the US and Europe, but up until a few years ago there wasn’t much available for Asia Pacific. Villa Finder conducted their first Asia Pacific market research study in 2017.
  • The study found that Bali was the biggest market, followed by Phuket, Sri Lanka, New Zealand, Australia, and Japan (especially during winter).
    • Some islands in the Philippines, Myanmar, and Laos are up-and-coming markets.
    • In some markets, supply is growing faster than demand.
  • Bali has grown and changed immensely in the last couple of years, and now probably contains more supply than the demand can support.
    • In these conditions, it’s important to provide value and high-quality service – rather than just offering discounts or the cheapest possible rates.
  • Daniel’s company primarily works with property investors who want the best return on their investment. In Bali, many owner/investors come from Singapore, Hong Kong, and lately some parts of Indonesia, so they’re familiar with the market but prefer a more hands-off approach that Villa Finder provides.
  • Villa Finder’s typical travelers include families and groups who want privacy and service. Villa Finder’s properties have options to include cleaning services, concierge service, private chefs, and more. 
    • Most of their travelers come from elsewhere in Asia, but during the summer months they see more Europeans.
  • Post-coronavirus, Villa Finder’s typical guest is someone who is either stuck outside their home country or chose to wait out the virus in a different location (often at a discount).
  • Villa Finder had to process a lot of cancellations so staff incomes were affected.
    • Staff typically receive a base monthly salary plus more money when guests are on-property, so without guests, their pay is decreased.
  • Most of Villa Finder’s reservations are made directly on their website, so they had more control over cancellations and refunds during the coronavirus crisis.
  • Villa Finder has adapted some other countries’ guidelines for villa cleanliness and best practices and created their own documents on their website and on property – translated into the local language too.
  • Villas offer a more private and controlled environment, compared to hotels, since you’re only sharing the property within your own traveling companions and perhaps a very small group of staff members. 
    • The staff is usually the same every day, which also helps to minimize personal contact.
  • In the long run, Villa Finder plans to expand their operations to destinations outside of Asia, like Spain and Italy.

Vacation Rental Management Conference: Full Conversation Between Daniel Rouquette And Thibault Masson

Thibault:

Dear RentalScaleUp members. Thank you so much for joining us now for this session. I’m joined by Daniel Rouquette, he’s co-founder and managing director Vila Finder. Villa Finder is a company you may know, it’s present across 28 markets in Asia Pacific. So we’ll be talking about not only what the company does, but also we’ll be providing you insight into what Villa markets are in Asia Pacific. You may be a property measure in one of the markets, but thanks to Daniel you’ll be able to hear more about global, regional data. Villa Finder has published over the years several reports with data across the markets. It’s been very, very interesting to read and I’m very happy that Daniel will be sharing a lot about these ones. So once the market is normally like, how it’s structured. And then of course we talk about the impact of COVID-19 on our industry.

Thibault:

What we’d be talking about is not only what’s going on now in terms of demand. For example, you’re talking about Bali, but we’d be talking about things like the consequence of decisions by OT platforms on staff revenues. I think it’s a very concrete topic that Daniel wanted to mention today and that we’ll be covering that. I think it’s very important. And then we’ll be talking as well about how to address recovery coming up with guidelines for example, or even changing a bit the way Villa Finder is working. So it’s a lot on a plate but a lot of insights as well. So I’m very happy to welcome you, Daniel. Thank you so much for being here. And first, how are you?

Daniel:

Thank you Thibault. I’m doing great. And here in Singapore and still confined, but looking forward to the end of this difficult situation.

Thibault:

So it’s, it’s, it’s, it’s, it’s great to, to, to have you here as I was saying, and, and, and I obviously Villa Finder is a, is a, is a big company now and completely full disclaimer because I have to do that. Obviously I got to know Villa Finder as I have one property in Bali and I think it’s, it’s currently registered with Villa Bali, which is one of your brand of subsidiaries. That’s how I got to know of course the company. I’ve seen it grow over the years, which is very, very impressive. But before people who may not know your background or want to know more about the company, can you describe a bit what you do?

Daniel:

Yes, of course. So we are the first Villa rental platform in Asia Pacific specializing in Asia Pacific. Of course. We work with about 2000 villas now that we have selected across those 28 markets. Why is this select is because we don’t work with everybody. We have a very important and precise process of creating properties that we’ll be working with. So well done, Thibault, you or your villa made the cuts. Many of them didn’t. And we yes, we, we really believe in integration. We really believe in service as well. So we have a team based in Bali, Indonesia, as well as in Singapore that will bring a lot of knowledge, expertise to clients, to travelers looking to find the right Villa, but also the right destination. So we really bring this independent view of the market and of the destinations to help travelers find the right place.

Daniel:

And on the other end of the spectrum, of course, we also work with the owners to help them improve the return on their investment. Of course, that’s one of the major things, but also give them indications on how the market is doing and sharing all the insights that we have. So at the end of the day, we are an intermediary, like, like quite a few other players. But we really believe in bringing a lot of value to both parties that we work with. Because if we’re an intermediary and we don’t bring the value, of course we won’t stay in business for very long. So that’s, that’s been the, a focus of ours for a long, long time.

Thibault:

So what’s interesting, what you just mentioned is bringing value to homeowners and to guests, but what you do as well, you try to bring value to the whole industry. And here I’m thinking about the reports that you’ve published. And now on RentalScaleUp, actually on the blog itself, we published I think, at least two of these great studies about the market. So even property managers, federal property managers can learn a lot about what’s going on in different markets because you have a lot of data. And I, of course, I love data and that’s going to be very interested in your market study. So can you maybe again, use some of this data to help us understand what the villa markets and the vacation rental market is like in Asia Pacific?

Daniel:

Yeah, of course. As you said, there’s a lot of data out there, but mostly for the US or the European markets but nothing in Asia Pacific. So it was really just we, we did this study for ourselves first and foremost. We wanted to know what was the market like. And so we in 2017, we did the first version of this market survey and spent a lot of time crunching data. There was no AirDNA at that time, so we did a lot of things very, very manually to really try and understand first how many properties are there. What is the average price like per night? What is the average return on investments, where some of the big markets. So what we found out is a lot of things. So the first one is Bali is the biggest market in Asia Pacific.

Daniel:

In terms of the number of villas, in terms of the booking value overall, it’s really the one true big destination in Asia. The other big destinations are Phuket and Samui in Thailand, Sri Lanka is a growing destination that we hear a lot about. As well as New Zealand, Australia and Japan. Recently, Japan has really taken off as a winter destination. So for people going to the North of Japan in particular for, for just skiing or snowboard, a beautiful place there. And yeah, so those are really the big destinations in Asia. Of course there are plenty of smaller destinations that might have only 20, 30 properties that are up and coming like some islands in the Philippines or even the, the, some small places in Myanmar or Loas really a very interesting market, very fragmented with some very, very big destinations like Bali.

Daniel:

There are a lot of details in those studies. So we have updated the study recently to also see the changes in the market, which was very interesting. We see really the supply growing very, very fast in some of these destinations, faster than the demand. So that’s always an interesting indicator. So I think that there is quite a bit there. So I guess we can share the link to, to the study later on. And and for, for people to dig in and see what they really find interesting in that

Thibault:

And yeah, exactly. So, we put the link directly to the study in there. And so again obviously you mentioned Bali for example, as is the biggest market in supply, for example, probably revenues I guess as well. But so, so, so much so in terms of supply, there’s quite a lot right now and still, I think a lot of properties that were supposed to be built. So it’s probably one of those markets that you were alluding to, whether it’s there we are on the verge of a supply, maybe.

Daniel:

Absolutely, absolutely. I’m in for, for those people, who’ve been to Bali a couple of times over the past few years. The change, the difference will be very noticeable. Parts of Canggu are, are very different now from what they were just even five years ago, which is great because we see the Island developing, which is also a, well sometimes sad because we see a lot of the nice rice paddies that people came for just disappearing on their villains. But, so yes, we definitely see the supply ground growing very, very, very fast in Bali, probably in over supply of the prices of rentals that used to go up pretty much every year or now flats or even decreasing. And this really reflects the, the, the new supply that came in the market. We see also occupancy rates going down. However, and that’s where I think it’s, it’s very important for property managers and villa owners to be smart. You can still have great returns. You can still get great occupancy not at the expense of lowering your price. Really keep great occupancy with decent rates by understanding what makes your Villa unique, what are people looking for? And finding other ways to differentiate yourself from the markets, not just getting discounts and the likes because this destroys value overall.

Thibault:

So that’s, again, it’s all this data we talked about that even the oversupply the hand is, is because we’ll link in the report because report not just has the data most of these analysis, which is very, very interesting. Another key point may be for people who may not know the market, maybe these people from the US, people from Europe watching. So it’s really, really a market where the properties that the suppliers may say, we say that they say call them properties owned by investors. I think it’s, it’s, it’s probably something a bit different. So what are the profiles of people, homeowners, you, you, you deal with?

Daniel:

Yes. So as, as you say, a lot of investors, we don’t really have here some homes that have been in the family for two or three or longer two-three generations. It’s really, those houses have been built for purpose, which is investment. Of course, some of the owners have different expectations. Some of them really built property for themselves for their own holidays in the region. But really, the main profile are those people were looking for a return on their investment. So those are people living in the region. They may be expats living in a, in Singapore, in Hong Kong, they may be locals. So Singaporeans or Chinese or Australians of course. And, and even people from Jakarta, we see more and more of those wealthy Indonesian people buying properties and building properties in Bali.

Daniel:

But the situation is very similar in the rest of the markets of Asia Pacific with the locals taking more and more of a share of the ownership of the properties, which is very interesting. So I think it’s a slightly different markets and, and mindset here because people are really looking for a return on their investment. So their approach to the market is really a business focus I would say. So again, that’s where by bringing them a clear understanding of the value that we can bring dealing with inquiries helping them do a better job at marketing their property. They really understand the value on the, whereas maybe some homeowners in Europe have a slightly different approach. They are happy to get just a couple of weeks rented every year to cover some of the costs and just come the rest of the time because they only renting for for a couple of weeks.

Daniel:

They’re happy to take care of the inquiries themselves because at the end of the day that a couple of weeks rent is just a few inquiries to handle here. When you’re renting in the destination, like the ones that we’ve all been involved in where it’s pretty much year-round There is, there is a high season in Bali, but even the low season still sees a lot of tourists. So the properties are really rented year around so, so there’s a lot of work. So those professional investors who have their own job on the side don’t want to be spending two, three hours every single day answering inquiries of, of, of people. So a very different, a very different profile year of homeowners, I believe. So then you had to talk about the homeowners and how about, how about the clients?

Thibault:

Who are the clients would be generally, speaking of the format but also maybe across markets. Any differences here?

Daniel:

So the, the, the travelers here are I think because of the type of property that we work with, of course they are their families, their groups people would travel together to to enjoy a place where they will find privacy, where they will find the some service as well, which is really important in the Southeast Asian and Asian context in general. There’s a lot of service in the villas, which is probably a big difference in terms of the type of properties from a, from what we’ll find the rest of the world. And which brings actually an amazing value to the properties when we think about it. Just the fact you have people will every single day clean the Villa, prepare your breakfast, help you booking a taxi or, or you can have amazing services like a yoga teacher coming to your, to your Villa or a private chef coming to you and we’ll buy all the groceries and do your dinner.

Daniel:

When you are a family. That’s really something you value because you want to be able to spend more time with your kids and your loved ones. So yes, our clients are coming from all over the world. A lot of them, of course from Australia because Australians love Bali and they love traveling in the region. So a lot of Australians. But of course, a lot of people living in the region from Singapore, Malaysia, Hong Kong, Taiwan all over really all over. We have European travelers coming usually over the summer month in Europe. So a little bit more seasonal. We tend to stay longer, which is quite interesting for us. But yeah, it’s, it’s really a diverse crowd here. And that’s what you will see. I think when you come to any of those destinations you will see people from all over the world, really.

Thibault:

So that’s the, that’s the, that’s a broad picture of the markets and thanks again, I know you are in 28 markets, so it’s pretty pretty impressive but something, so you all over the region, but so something, something that’s so has happened all over the region actually across the world is this COVID-19 crisis. How’s it like now I mean demand right now. What’s the, what’s the demand like in the moment?

Daniel:

Well, yeah, I won’t lie. It’s very, very slow. Most of the demand that we have is for people who are stuck in one of those destinations. Bali, Phuket, people decided to just stay for, for, for the, for the time being there. So this demand is nothing that anyone will get rich from those are monthly rental for the cost of a couple of nights or not even a week off, of the usual price that the villas go for. So, and, and it’s very yeah, it’s, it’s, it’s very, very slow. So, we don’t really see much signs of recovery yet. We are getting a couple of bookings for next year already. We have people who are very confident in the market just like we are, that of course this will pass like many other crises that we have had in the travel industry. People will come back. And yeah, but, but it hasn’t come back yet. So for now it’s mostly people stuck in those destinations looking for a “Corona-deal” as they call it to be able to stay in a beautiful villa for a fraction of the price. Yeah. It’s something that, yeah, I would love to enjoy as well if I was in Bali at the moment and not in Singapore.

Thibault:

So that’s, yeah, it’s a midterm reality of things at the moment and speaking of reality as well as that. And let’s talk a moment about the staff because as you mentioned earlier, these properties eyeballs provide great service, which service is oftentimes anymore by staff and staff oftentimes actually who’s attached to the Villa. And, and you know even if you’re a property manager in Australia, you’ve probably been to Bali and he fully experienced this level of staff. And as you mentioned it’s nothing daily cleaning, but usually the staff, you know, hangs out the whole day at the property, right? They have sometimes staff quarters, more or less nice, but they do know, they are usually there at their will. So you can imagine that this has been a big impact. So let’s talk about something that is very important to explain is the impact of the whole massive cancellations and refunds. So what has been the impact on the staff, for example? In places like Bali.

Daniel:

Yes, absolutely. It’s,It’s really the, the, the saddest part I think about this whole crisis is the impact on staff and impact of this. The decisions like Airbnb’s in natural decision to refund every single client which is that they didn’t take into account situations like the one that we have in Asia where a lot of the times the staff depends on the, on revenues from, from travelers to be able to survive. Those staff are paid a little bit every, every single month. But when they are guests coming to the Villa, they get extra. And so right now those staff are losing all this revenue of course people in their own families because the whole, most of those destinations are very dependent on tourism. A lot of people are losing their jobs. So we’re really talking of of people were losing their, their, their ways of their income and their ways of surviving here.

Daniel:

So I think if the situation lasts for really long. It’s going to be very, very difficult, especially because here in, in many of those markets, there is no there is no support from the government. You don’t have employment benefits for those people who lose their job. They are left the next day with nothing. So it’s really a difficult decision, which means that in our destination refund is definitely not the rule. Refund is the exception. We offer mostly postponements for clients for a, usually up to a year which is very generous of course, on the, on from, from owners to, to, to accept. And it’s really a reality that I think makes sense. Here in Asia, when you are in Europe and you have the apartments, if your apartment is not rented, well, you don’t have much expense, maybe you have a loan to repay. Of course, that’s, that’s important. But here on top of that loan that you might have to repay, you have 10 staff that would depend on this income for their day to day. So it’s a very big impact for them, of course. And, a tragic situation if it lasts much longer.

Thibault:

So if I’m not mistaken Villa Finder, you also get direct bookings publicity, right? Because you are a platform as well. And in another session with Quirin from the MadeComfy in Australia, we talked how he switched his strategy from having the demand all coming from the OTAs and by having his own platform he launched their own direct booking platform. So that’s probably that something that happened with you, right. You have obviously had more control on the refund and cancellation policies when they are direct bookings. It’s something that happened as well.

Daniel:

Absolutely. Absolutely. So, so fortunately we have a lot more control over this. However, when you have a big name in the industry that sets the standards in a way it’s very difficult for us to, sometimes explain to clients why we are operating differently. So it’s a, it’s, it’s fortunate I guess, you know, in our case that we were able to, to, to go about this differently because we have mostly direct bookings. But yeah, overall it casts a diff. It was a difficult situation for everyone and for a consumer traveler to understand. Of course.

Thibault:

So speaking of like new standards that people have in mind, but a big one is obviously the whole topic, which is cleanness, nice safety. It’s obviously a big topic and we’ve seen platforms, we’ve seen associations in different countries publishing their own guidelines. So what do you think of these different guidelines and what is Villa Finder doing about it?

Daniel:

So, yeah, there, there’s some really good guidelines going to be published more or less all over the world. Once again not that much in Asia. So we have decided to adapt those guidelines to the Asian markets. So we have released a series of recommendations and also just a page, at least a lot of resources for Villa owners in our destinations to understand some, some specific, some simple things like where to find the hand washing gel or where to buy masks for, for the Villa. So the local suppliers, but also simple videos in local language like Indonesian, Thai on how to clean the Villa. I mean the specific aspect of cleaning the Villa in this situation. So yeah, we’ve published all those guidelines. I invite everyone to, to go and have a look.

Daniel:

I hope it’s relevant. And we are doing our best to keep it updated with more resources that we find out there. So this will keep on improving and yeah, it’s published on the Villa Finder website and we do hope that owners will be able to take some of those best practices. I’m confident they will. Villas are great. I’m much better than hotels in this situation. I would say you know, tell of course you are sharing a lot of facilities with hundreds of strangers. It’s the lift, it’s the swimming pool, it’s all those things. So in a Villa you are in a much more controlled environment. Of course you have you, you have a, you are only together with your and your family, with the people that you’re traveling with. You have a staff who’s there to really take care of you. And we can clean on a regular basis the villa. So you’re in a much more controlled environment. So I do believe that moving forward to villas are a great solution when it comes to the post COVID world. Yeah,

Thibault:

Yeah, I agree as well with you because people talk about having to be in your own bubble. And what I love with the villas, it is your own bubble and, and especially if you have trust in the, the cleaning guidelines for the way things are done in the properties that it’s an better, and usually the cleaners the same, the staff is the same from one day to another. It also helps create this, this trust with the staff

Daniel:

Absolutely. And, and bond as well to the staff, which is something that our clients love. Right? Of course, you have the same staff who comes day after day. They start to know you very quickly. They know your name, they know what you like for breakfast. They know what time you wake up in the morning so you can have your breakfast, whatever, at whatever time you want. This, this is really great. Then this is what makes villas in the region so special and so unique of course, this unique experience that you get. Yeah, and this is not gonna change obviously in the future. It’s only gonna get better

Thibault:

To finish off because we are left to talk about something else. So I have properties in Bali, but also in the Caribbean which are able to meet different people. And one of them is this company called WIMCO, which is a big name in the Villa rental especially in Caribbean. And talking with CEO Tim Warburton we talk about when they, how basically they’ve also opened a Europe as a market for them because their base of American clients going through Caribbean also could go in the summer to Europe and summer is low season, a Caribbean, high in Europe. So we have them have a better let’s say stream of revenues across the year. And obviously we have hurricanes in Caribbean. So it’s also have in the downturn. What are your thoughts about this kind of strategy and is it something you would be considering?

Daniel:

Yeah, I think it’s a, it’s very smart of course, to diversify your source of revenue. So offering more destinations is one, one of those ways. It’s something that our clients have been asking us for a very long time. So as you mentioned, you knew us from, from our Bali activity because this is where we started. First eight years ago we started in Bali because we love the destination because we knew it was one of the largest in the region, but we always knew that we wanted to go beyond. So now we cover 28 markets and in the long run we definitely want to make a move outside of Asia Pacific. The current situation is helping us, I will say, accelerate, accelerate this move. And we are on the verge of launching some destinations in Europe in Spain, in Italy, in the South of France, and more to come of course because we do believe, of course that travel is going to recover first locally.

Daniel:

So we want to be present with a great offering for our clients who are in Europe? And we’re not comfortable just yet to travel the way to Asia because maybe it’s too expensive for them. So we want to have something to offer to them, the same standard of quality and the same amazing experience in Europe and in the future, the Caribbean as well and the rest of the world.

Thibault:

Thanks. Love insight. Well, I hope this plan goes well. I’m sure it will because you’ve been able to expand from one to 28 markets. So I think you have the ability to scale.

Daniel:

…and we have an amazing team and I have no doubts that they will be able to execute this. Of course.

Thibault:

So Daniel, you’re the co-founder again, and managing director of Villa Finder and thank you so much for your time today.

Thibault:

And as you mentioned, we’ll link under the video to the detail reports as well out to the cleaning guidelines. If people want to reach out and maybe know more or talk with you, they’re homeowners or property managers, what’s the best way to reach out?

Daniel:

Oh, I think they can find me. Of course, on LinkedIn, they can find me through the websites Villafinder.com. You can just email me at [email protected] I’m also available on Twitter. If some people prefer this medium, so yeah, don’t hesitate, happy to share my insight and understanding of the market and help homeowners all over the world get to get the most out of their Villa and offer an amazing experience for travelers.

Thibault:

Alright, once again, thanks for your insights and I wish you a great, Daniel.

Daniel:

Thank you, Thibault. You too.

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