Orlando Vacation Homes Rentals

posted by orlandovacationhome on Mar 13

Biketoberfest – Daytona Beach, Florida 2009

October 15 -18, 2009

Biketoberfest Information

Daytona Biketoberfest

There are some great rides around Daytona up and down the coast line as well as the traditional Daytona Loop.

Biketoberfest 2009 Events

The events at Biketoberfest in Daytona are similar to bike week. There are numerous bike exhibits, bars, vendors, concerts and bikini contests. There is typically something for every biker.

Biketoberfest Pictures Photos Pics

Some bikers stay in Orlando during Biketoberfest and ride over to Daytona during the day (about 50 minutes if the traffic is good) as this makes for a good ride. Staying in Orlando allows some to visit the major attractions while in the area. In addition, if you rent an Orlando vacation home you can get a house with a private garage and keep your bike protected away from prying eyes at night.

Biketoberfest 2009

October is the middle of rain season in Florida and is notorious for afternoon rain storms so come prepared.

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posted by orlandovacationhome on Feb 28

Hotel attrition clauses in room block contracts for convention and meeting groups have historically been standard policy. An attrition clause makes the booking entity pay for the rooms they book whether they use them or not.

Likewise, vacation home management companies have also had strict rental booking policies with regards to deposits and cancellations.

However, with the world economy crumbling at rapid speed, many companies and vacationers are hesitant to book a hotel or vacation home with a strict attrition/cancellation clause if they will be forced to honor them.

As a sign of the times, many hotels in the Orlando market are throwing out the attrition clause as an incentive to get groups to actually book. This should also be a signal to vacation home management companies to relax some of their non-refundable deposit and cancellation policies to encourage potential bookers.

The market and economy is changing at lightning speed, and the short term rental industry must react accordingly.

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posted by orlandovacationhome on Jan 3

Once again, Sea World ® has increased their ticket prices. The new price increase (1) (the third in the last year) for a regular one day admission is still priced about five cents below Walt Disney World ® and Universal Studios Orlando ®.

It is interesting that Orlando area parks have aggressively increased their park prices given the current face of the economic crisis, and the fact the number of tourists to the area have plummeted since November 08.

Sea World’s parent company is Busch Entertainment Corp., which also owns Busch Gardens Tampa Bay and Aquatica, a major Orlando water park.

The standard Sea World ticket has gone up approximately 15% since October 2007, bringing the one day standard price closer to its multiday pass. This encourages visitors to purchase the multiday and capture the ancillary revenues via their outlets for their Orlando vacation.

Some Orlando parks are able to package their tickets with on-site hotels, further encouraging tourists to stay on site rather than book an outside hotel. Please see our other blog posts on the value opportunity this creates for vacationers. Despite these changes, Orlando area vacation vacation homes still present the best value in the market on a per square foot basis(2).

SeaWorld Orlando

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posted by orlandovacationhome on Dec 19

In this article we will detail how deep the economic crisis is and might be for Orlando’s largest employer – the short term rental industry. This includes hotels, timeshare rentals and vacation homes alike. We will explain the impact on employment and the need to be fiscally prudent. We will conclude that Orlando is in an economic recession and a technical economic depression is possible, the consequences of which will be far reaching and significant to the local economy.

For November 2008, the Orlando CVB is reporting even bigger drops in metro Orlando’s hotel revenues of 30%+/-(2). This would indicate possible systemic future drops in the Orlando tax collections from the hotel and short term rental industry as a whole.

As a result, much of Orlando’s short term rental industry could be laid off. This is concerning as it is also Orlando’s largest employer(3). As short term rental companies see their gross profit margins plummet they will be forced to reduce their biggest variable cost – labor.

A 20% +/- drop in tax revenues generated by hotels and other short term rentals is a real possibility for 2009, and the implications to the local Orlando economy would be significant.

Projects such as the new $480 million basketball court in downtown Orlando financed in part by hotel tax dollars (5) puts into question the opportunity cost of such a project when thousands of hospitality workers are now losing their jobs(6). The credit crunch has already forced up the cost of the bonds to finance the new Orlando arena as much as $104,000,000 indicating the increased risk of such a project that is now perceived by bond investors.(6.1).

The solution to many of the local fiscal problems are now in the hands of the global economy. As we always explain, no one can predict the future, but the basic math of the immediate problems facing Orlando’s hospitality industry are significant and possibly systemic. If Orlando’s economic GDP drops more than 10% it would be considered by many economists a technical economic depression (7).

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posted by orlandovacationhome on Dec 9

Given all the hoopla that often comes with a new hotel entering the metro Orlando market, we thought we would offer some thoughts different from our usual vacation home industry analysis. A friend of ours in Orlando wrote the following about the hotel industry. The parallels to the vacation home industry can also be drawn.

Some new larger hotels who entered the Orlando market as “newbies” went after the “convention market” and frowned upon regular theme park tourists as not being a viable market. Typically, a new hotel will learn within a year of opening they need to have a comprehensive business mix if they are to survive.

Many large convention hotels in the metro Orlando area are now experiencing significant declines in their “pick up rates”. Given the global recession, this is to be expected. But worse, some convention groups (i.e. many financial services companies) no longer exist. The Orlando CVB documents hotel room revenues dropping 30% +/- in November 2008 for the metro Orlando area. Orlando hotels who have never expereinced a big Orlando market downturn will now learn what it is all about.

The well seasoned and super efficient players such as Harris Rosen understand only too well how the Orlando game works. His world famous Rosen Hotels and Resorts operates debt free to make themselves recession proof even during dire times.

When business is slow, it is not uncommon for some upper level convention hotels to sell inventory for well under $100 a night through various distribution channels. For some newer hotels with debt levels at costs north of $100K (and in some cases more than $200K a room), this can be a devastating thought. Often, even under the best due diligence, failure to plan for economic recessions (on average every seven years) can be a rude awakening for both new hotel owners and their lenders alike.

If you are thinking of developing a hotel in the metro Orlando area, take several local hoteliers out to lunch first and get their opinion. You may also want to join some of the fantastic local hospitality organizations before you launch a project of any kind. Such simple things could be the best pre-investment you make. Relying on MBA type financial analysis by people who do not know the market at an intimate level is always a sure path to disaster.

Many of the plans to build new convention hotels in Orlando have now been shelved, but those that have opened in recent years or are about to open will soon understand why tourism experts in the area call Orlando a “unique market”. Good luck.

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posted by orlandovacationhome on Dec 6

If the most recent data is to be believed, hotel revenues in Orlando are dropping at possible catastrophic rates, and this could be an indicator of what some may have already felt in the metro Orlando vacation home industry.

Data for Orlando vacation home occupancy and rate is difficult to collect, as the industry is very fragmented. However, as market indicators, we are inclined to consider hotel data trends to help as a mirror to the vacation home industry.

Recently SMITH TRAVEL RESEARCH, a provider of hotel industry data, reported that revenue per available room tumbled 13.2 percent nationally during the week Nov. 9-15, 2008 compared to a year earlier. Revenue per available room, or RevPar as it is termed, is a key gauge of a hotel’s revenue performance.

At the local level, metro Orlando has begun to see the largest drops in both rate and occupancy across the board for the hotel industry since 2001. For the week ending November 15^th, 2008 hotel Rev PAR dropped by a whopping 27.3 % according to the ORLANDO CVB records .

So what are the ramifications for the Orlando vacation home market? Hotel data now tells us that a short term combination of rate and occupancy are in a state of significant decline. Not a surprise given the current economic environment, but the level and rate of the decline is much more devastating than what is being reported on some media outlets. It remains to be seen if these short term indicators become longer term trends for the Orlando market and can provide some basis for an Orlando tourism forecast.

Possible ramifications in the vacation home industry could include:

1.     Rev PAH (Revenue per available home), is going to most likely drop significantly, as occupancies decline and some owners and home managers alike, quickly drop their rental rates.

2.     This could impact vacation home prices due to the fact that vacation homes would have a lessened ability to generate income, which would logically be reflected in the underlying home sales prices.

3.     Like any business, those homeowners that are best positioned to “hunker down” will be the ones that survive. Such factors could include: limited levels of debt, high rental occupancies, good locations and marketing strategies, excellent maintenance, and the overall experience of a good vacation home management company.

The good news for families, and even some event type groups seeking economic alternatives to hotel rooms, is that they may now logically consider the benefit of vacation homes. This helps the vacation home option become more mainstream. Please see our other posts detailing the economic viability of renting Orlando vacation homes and the value they provide to consumers. In addition, the best run vacation home management companies will most likely survive and the services they provide will become more essential.

In conclusion, there is no sugar coating the data. The drop in both rate and occupancy appears to have come so quickly and deeply that major media, and even many in the tourism industry, do not yet recognize. Expect possible systemic failures in Orlando’s tourism industry if these trends continue. Unfortunately, no one can preidict the future including us.

As always, our blog tries to inform you objectively, so subscribe.  Check the ORLANDO CVB data here.

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posted by orlandovacationhome on Nov 20

Let’s be clear, no one can predict the future. If we could, we wouldn’t be writing a blog. This post is  just an opinion. DISCLAIMER. As with any economic opinion, take it with a grain of salt. The authors of this blog are not professionals and do not give out professional advice.

The Orlando vacation house market has been hit hard, especially for many buyers who purchased vacation homes around the years 2005-2006. Prices have dropped in some vacation home subdivisions over 30% from their peak 2 to 3 years ago. For the metro Orlando area as whole, prices appear to have dropped. Click HERE STATISTICS(1).

There are arguments that prices will continue to DROP(2):

Vacation homes are much harder to finance than primary homes, and in the current market even primary homes are now hard to finance (2A).

Foreclosures are piling up. As people struggle with their primary home mortgage, they may give up their second homes.(2B)

There are large inventories (2C).

A few vacation home subdivisions struggle with upkeep of resident exterior areas. Vacation home managment struggles to keep this under aesthetic control for vacationers.(2D)

Banks will begin to compete against each other to sell foreclosed homes, and this could negatively effect vacation home pricing (2E)

Tourists are cutting back big time on Orlando (2F).  Thus, the demand for vacation rentals is also dropping. This means that owners have less income to pay the current mortgage which increases the risk of foreclosure.

In a depressed economy, the last thing people often want to do is buy a vacation home, but the first thing they may want to do is sell if they own one (2G).

Homeowners unable to refinance their vacation homes (they may owe more than the home is now worth) might let the home foreclose if they are unable to modify the loan terms (2G1)

When the world is facing an economic crisis (2I), discretionary items such as vacation homes are no longer in demand. If the USA enters a severe recession, the demand for some vacation home products could dry up.

There are arguments that prices will STABILIZE(3):

It would appear that the rate of price decline in some subdivisions is SLOWING(4) down, but prices are still dropping.

Some subdivisions are making the transition from primarily a short term rental market to subdivisions that cater to full-time owner occupiers as the prices drop, and the vacation homes become affordable relative to regular homes.

The government is reacting on a massive scale to solve the problem(4A).

There are some SIGNS(5) that the number of home sales has been increasing.

In conclusion, vacation homes in the Orlando and Kissimmee area face a unique set of circumstances that has allowed for significant price drops from their peak prices over the last 2 to 3 years. Forecasting the future with absolute certainty is an impossibility.

Subscribe to our blog for in depth graphical analysis and forecasts scheduled to be released next month. Click here to subscribe.

As always, please consider the people writing this post/bog to be unprofessional and incompetent at all times. Due to your own due diligence at all times use an Orlando appraisal company, real estate attorney and other professionals accordingly.

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posted by orlandovacationhome on Nov 11

If you are visiting Orlando Florida and looking for a vacation villa rental, there is great news. There is a huge oversupply of Orlando luxury vacation homes for rent. This means deals to be had abound for your Orlando vacation. For about the price of a mid-market hotel room, you can rent a fully equipped vacation villa home with your own private pool and do as much self-catering in a full kitchen as you like.  This would certainly help you cut down on your dining and entertainment bills. Thousands of homes were built over the last ten years, and now many owners need to rent them. On any single night in Orlando, many of these homes sit empty.

Occupancies Dropping

In Orlando, the hotel industry will be the first to tell you their occupancies plunged in September 2008 over 2007, with room revenues dropping by as much 20-25%.

Many Owners Need to Rent

Many vacation homeowners are now feeling the pinch of the housing crisis, and many of the speculators who bought now need to generate additional income to the pay the mortgage.

What does this mean to you, the renter?

1. Shop around. There are thousands of Orlando villas and hundreds of vacation home rental management companies. Make sure you rent a good home, get a great deal and stay in a great location for your Orlando vacation.
2. Always pay by credit card.
   

   Orlando Vacation Homes - Great Deals for Renters!

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posted by orlandovacationhome on Oct 28

Foreclosures Effect Orlando Vacation Home Market.

The level of foreclosures in the Orlando vacation home market are now at or near record levels. As many vacation homes in the Central Florida are second homes and many were bought by speculators, the prices in many communities have dropped significantly. It would seem that many owners have simply walked away due in part that the rents from such homes are not enough to cover their expenses.

Some of the communities hardest hit are those that saw the greatest appreciation. Unlike regular homes, vacation home communities tend to have less permanent resident owners that can help stabilize the area or neighborhood.

Many banks are also being tough when lending on vacation homes which can further hold demand down. In effect, this means that many homeowners who bought a property over the prior three years could now face significant losses they sell today.

We are not real estate professionals, as we had to go through online public records, and methodically pull sales along with calling a few local realty offices in the Orlando and Kissimmee area. Our information may not be perfectly accurate so, as always, consult a real estate professional in the area and have them pull the data for you.

So what will happen to the Orlando vacation home market in the future? No one knows, and it is pure opinion and speculation at best. If we knew, we would be sitting on an island in Tahiti sipping a beer rather than worrying about the general state of the market.

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