Luxurious Journey Market in Asia banks on Villa Leases
Border closings, social distancing, new hygiene standards and general uncertainty about the safety of travel are some of the changes in the market over the past year. In this article, we’re going to share more about how the pandemic has impacted the villa rental market in APAC, how villa owners have dealt with it, and what the future will be for villa rentals.
- The The Impact of COVID 19 on the Asian Luxury Travel Market and Trends for 2021 is important
- Exclusive study by Villa Finder, the leading provider of villas in the Asia-Pacific region, on the impact of travel restrictions on the 440 million region
- The Covid-19 pandemic has hit the travel industry hard, and the Asia-Pacific villa market is no exception.
Due to the complete travel stop, the overall market in the Asia-Pacific region was reduced by 38% in 2021. The market size decreased from $ 440 million in 2019 to $ 271 million. We see a Downward trend in supply, occupancy and average rate in all markets, with a few exceptions where domestic travel demand has increased.
The Bali market fell 66%. It is now the second largest market after Sydney. However, the market still has the highest number of villas available for full-time vacation rentals. Despite a 20% discount, there are still holiday villas in Bali. The average price is reduced by 34%. Average price is less than $ 150 / night.
Is the market with the greatest decline Danang (79%). According to the General Statistics Office of Vietnam, the number of international travelers arriving in the country stood at 450,000 in March 2020, a 68% decrease from the previous year. After March there were almost no international travelers.
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Despite the lockdown, we’re seeing some positive signs of domestic travel in Australia. Byron Bay, Perth and Sydney recorded a double-digit increase in the number of villas on offer. Sydney is now the largest market, reaching $ 58 million (up 13% from 2019). Byron Bay grown by 80%. The number of advertisements, the price and the occupancy increased. This growth is due to the fact that many people have signed up their homes or second homes for vacation, and the government also has several initiatives to stimulate domestic demand such as the Regional Tourism Recovery Initiative, the NT Tourism Campaign, and subsidies for domestic regional routes .
1. Quick response to the changing environment
Despite the initial shock, APAC villa owners quickly adopted new security measures such as social distancing, masks, and new standards of hygiene. “We have actively changed the way we work by incorporating COVID-proof measures into our physical spaces, the way we interact with guests, the way we interact as colleagues, and really everything we do to have. But we did it by coming together as a team and we feel more united than ever in our common goal of offering our valued guests from all over the world sensational and safe experiences, ”shared Libby spears, Sales and Marketing Director of H2 Life, Manager of over 200 luxury vacation rentals in Niseko.
2. Focus on the domestic market
In Bali, although the destination was closed to foreign visitors, domestic traffic gradually increased. I Gusti Ngurah Rai Airport saw significant growth from June to November 2020. On average, the number of flights increased by 56.1% and the passenger growth was 101.4%
3. “Corona deals” for digital nomads and long-term tenants
In 2020, many villas offered so-called “Corona Deals” aimed at digital nomads and international visitors who were stuck in the destination. They opened the villas for long term rentals at a fraction of the usual price. Airbnb also had 6 million monthly rentals worldwide, many of which offer discounts for longer stays.
Perspectives on 2021 and the future of travel after the pandemic
1. Expectation of a domestic travel boom
When travel resumes, we will see a recovery for domestic travel first. While international borders remain closed, many countries such as Australia and Vietnam are easing restrictions on domestic travel. For example, the Australian government is cutting the price of nearly 800,000 flights in half to encourage people to spend more money on their travels.
2. Uncertainty about when international travel will reopen
“Travel to the region won’t resume until the fourth quarter of this year at the earliest, and we won’t likely see any real recovery until the second half of 2022,” shared Daniel Rouquette, Managing Director of Villafinder. He went on to say that Villa Finder was looking for various signs of a possible comeback. The international market depends on many factors, such as the global vaccination rate, the development of the pandemic, the Covid travel protocol and the quarantine process in the host countries.
Jack Eden, CEO of Eden Villas, a luxury villa specialist in Sri Lanka, confirmed this: “I have always believed that 2021 will be difficult. [W]While we are doing our best within the permissible parameters and are happy to accept the business that we can secure, our budget was always aimed at 2022. “
“At first there will be a certain nervousness when the world gets familiar with traveling again and people outside the safe borders of their home country slowly regain confidence.
We know that skiers and snowboarders are adventurers at heart and growing impatient, so we expect snow lovers to be among the first to take the plunge and travel abroad again. We are fortunate to have Niseko and Furano in the breathtaking Hokkaido countryside, and we believe guests will be looking for destinations outside of the bustling cities when they first travel again, ”said Spears.
3. Different travel expectations among consumers
Safety measures like wearing masks, social distancing and disinfecting public spaces, as well as flexible cancellation policies will be more of a basic requirement than a nice accessory. Travel insurance that covers Covid-19 has also become mandatory in many countries such as Cambodia, Laos and Thailand. In addition, some expectations remain unchanged.
“[G]Guests still long for sensational experiences. Your desire for exceptional accommodation, unforgettable activities, attentive and personal service and the normality of being able to do what you want, when you want, during your holiday. In fact, it’s becoming more important than ever. ”Speere said.
4. Optimism about the future of travel
Experts remain optimistic about the villa market, especially after the pandemic. Post-Covid will be a very interesting time for the villa market, the behavior of travelers is changing. There is still a demand for travel. According to a study by Airbnb, people miss traveling. You want to travel to connect with friends and family. You want to travel nearby and travel safely. (Source)
“[T]There is a demand for long distance travel and once we can all travel freely the industry will recover, ”noted Eden.
“That is the golden question, and it is a challenge to predict with certainty when travel will return. But we are optimistic that we will have international guests from some parts of the world this year, ”said Spears.
5. A move from hotels to villas and other alternative accommodations
The post-covid world will also present an exciting opportunity for the villa rental market. Experts predict that the demand for villa rentals will return stronger than ever. Travelers want a smaller place away from the crowd and avoid sharing facilities with other guests. This makes villas the best choice of accommodation.
According to AirDNA research, short-term rentals survive the effects of Covid-19 much better than hotels. While it’s too early to see an uptrend as recovery, it’s worth noting that the alternative accommodations are more resilient. Larger properties (4 bedroom villas, etc.) have the strongest performance.
“Villas will recover well and will be the first choice of accommodation. The villas provide a “home away from home” while being looked after by a team dedicated to this villa, including a private chef, butler and cleaning staff. With a dedicated concierge service arranging everything, villa guests can enjoy the variety of a country’s offerings in the privacy of their own villa. Compare that to a hotel and what’s not to like? ”Eden concluded.
