Orlando Vacation Homes Rentals

posted by orlandovacationhome on Nov 2

Orlando area vacation homes were given a credibility boost when they were featured in the Orlando CVB’s Orlando Makes Me Smile tourism promotion for the area.

The 67 Days of Smiles tour by Kyle Post and Stacey Doornbos visited a vacation home community on Day 62 of their tour. As we have blogged before, vacation homes are becoming a more mainstream choice for Orlando tourists. This promo choice exemplifies this fact.

Acadia Estates villas were also featured in a video tour of the luxurious Kissimmee vacation rental community on the Orlando CVB website. Acadia Estates is an exclusive community of 5 to 7 bedroom vacation rentals in a private gated cul-de-sac. Acadia Estates is located in a convenient location approximately 7 miles to Disney’s Magic Kingdom and 4 miles to Animal Kingdom.

We applaude the Orlando Convention and Visitors Bureau for carving out time for Kyle and Stacey to view and stay in a representative vacation home community. Acadia Estates is/was an excellent choice for the type of quality accommodations that vacation rentals have to offer visitors to the area.

Consult the community reviews section of our website for a review of Acadia Estates villas along with 80+ other vacation rental communities in Kissimmee, Clermont, Orlando, and Davenport.

Acadia Estates

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posted by orlandovacationhome on Aug 31

Back in June, 2009, we made the case that social media needed more creative attention relating to Orlando Tourism Promotion due to the flagging economy. The Orlando Convention and Visitors Bureau has now come around to the power of the social media. The Bureau released a new social blogging strategy to promote all that Orlando travel and tourism has to offer. This will hopefully create some much needed buzz in markets across the globe to encourage taking an Orlando based vacation.

Stacey Doornbos and Kyle Post (appropriately named for a blogger) from New York were selected as the new “Orlando Makes Me Smile” Tourism Campaign Ambassadors. They will blog about over 100 attractions the area has to offer. As stated earlier, this will include both the smaller yet high quality attractions along with news from the bigger more well known venues.

As active followers of social media, we applaude the actions of the OOCVB. Social media is a great way to create a crafted message to boost tourism and inform potential consumers.

Our mission mirrors this same goal along with promoting the advantages of Orlando vacation rentals. We believe there is power in vacation home brands based upon years of positive experiences at these resort communities. We review and profile over 80+ vacation home subdivisions, many located just minutes from area theme parks. Orlando villa reviews give you additional detail and insight for most communities in the area. You typically get all the amenities of home and then some including pools and common area amenities by booking in vacation villa subdivisions. Vacation rentals for many tourists visiting Orlando are now truly preferred over cramped hotels.

Orlando Tourism

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posted by orlandovacationhome on Jun 25

We recently sat down with a senior Orlando hospitality executive and were stunned that they had almost no understanding of the “new media” and its impact on tourism.

As an update to our post on Growth Opportunities for Orlando Tourism, the World Bank has cut its 2009 global growth forecast down 1.2% (from a 1.7% decline to a 2.9% decline) .This roiled many financial markets amidst sharp asset price drops.

The wild card among all of this news remains to be high levels of unemployment both domestically and abroad. As we indicated on the last post, forecasts are subject to changes at any time. Unfortunately, the continuing rise in the employment is driving down tourism forecasts.

Assuming these downward forecasts to be accurate, it portends continued weakness or stagnation for Orlando travel and tourism. Although there will be pockets of growth, the Orlando travel market will be challenging for the foreseeable future.

With shrinking tourism budgets, what will the strategy be in this negative travel climate?

Our contention is that all levels of Orlando (and Florida) travel and promotion will need to be innovative and resourceful in getting the message out to maintain market share. Gone are the days of inefficient allocation of expensive resources that reap relatively little direct benefits to area businesses and taxpayers.

From a private sector standpoint, Disney has thankfully opted to provide additional value to area visitors rather than cut services or attractions. This helps improve the value proposition for any potential visitor and increases the chance that tourism volume losses can be kept to a minimum.

We hope to do our part by blogging and podcasting about Orlando travel, and by specifically promoting the benefits of staying in Orlando area vacation homes.

Our belief is the “new media” is one of the most effective means to get the benefits of visiting Orlando out in a targeted way. A good example is the fact the Universal Theme Parks have created a “Vice President of New Media” position to creatively promote its parks. In addition, the new media can be an effective tool for the public/private funded travel promotional areas if it is used in a creative, adaptive and strategic manner.

Orlando Tourism

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posted by orlandovacationhome on Jun 17

As it becomes apparent that slow domestic economic growth may be with us in the short term, attention turns to where economic and visitor growth opportunities may exist for 2009-2010 and beyond. This will be critical for forecasting growth opportunities for Orlando travel and tourism with the strong indication that the domestic American economy will be negative to sluggish for at least the remainder of the year.

Although somewhat controversial in its application, national GDP growth is a relative indicator for the health of an underlying macroeconomy. According to EU, OECD and IMF national statistical offices, the following forecasted country growth estimates are applicable for 2009:

• United States – 1.5%
• Canada – 1.2%
• Western and Central Europe – 1.7%
• Mexico – 1.0%
• Brazil 1.0%
• Much of Latin America 0-1+%
• China and India 5-6%

The problem for Orlando travel and tourism growth in 2009 is that the top countries with negative economic growth are the biggest current contributors to Orlando’s baseline level of visitor activity.  

Although projections can change at any time, Latin American economic growth should help stimulate the middle classes in those countries with the benefit of higher discretionary incomes and subsequent increased travel.

Moreover, there will be some pockets of growth and opportunity for Florida travel, but not enough to offset those areas that contribute such a significant amount to the local economy and provide needed resort tax revenues.

Orlando Travel

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posted by orlandovacationhome on Apr 3

Orlando Hotel 2009 Revenues Drop at Catastrophic Rates Year Over Year : More Layoffs and Systemic Failure Certain

Today, Orlando tourism leaders looked concerned as they appeared on local news outlets (1) and indicated that hotel room revenue has plummeted. For February 2009, Orlando hotel room revenues were down 28% over February 2008.

We have an unfortunate prediction of our own, it’s going to get worse before it gets better. Our interviews with short term rental General Managers and Sales Directors indicate that the number of visitors to Orlando will continue to decline at an accelerated pace over last year’s benchmark. Our only indication that things might begin to trough would be recent consumer spending numbers that do lend a ray of hope for the economy.

We clearly forecasted these declines in previous posts and were criticized for being too pessimistic. Rest assured, this blog has no agenda other than trying to provide clear analysis and opinion for our readers.

Click on any of the links below to see our previous forecasts and analysis:

1. Dire consequences forecast UK market to Orlando 2009
2. Orlando hotels face financial disaster in 2009
3. Orlando hospitality industry faces systemic failure in 2009
4. Short Term Rental Revenue Forecast for Orlando 2009

It’s not pretty for the Orlando economy at the moment, and will most likely get sigificantly worse. However, if you are a tourist visiting Orlando, the rates at hotels and vacation homes have never been a better value.

As we always note, no one can perfectly predict what will happen in the future, including us. As our disclaimer indicates, always consider the authors of this blog to be incompetent.

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posted by orlandovacationhome on Jan 25

We had previously identified that the perfect storm could be about to hit the massive UK tourism market (approx. $1,000,000,000) to Orlando. It would appear the perfect storm is now happening.

The British pound just hit a 25 year low against the dollar and is getting worse. The cost to a British person to visit Orlando based purely on the exchange rate is now at a 25 year high.

The reason for the dramatic devaluation in the pound is due to the problems in the banking industry in the UK which have reached dire proportions and are getting worse by the day. Royal Bank of Scotland’s problems appear to be wreaking more havoc on the UK economy (2).

In conclusion, the implosion of the UK economy will be tough on Orlando tourism and the economy as a whole. A 15% to 20% decline in this market for 2009 would not be unrealistic given the current circumstances, but then no one can predict the future including us – we are incompetent non-professionals.

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posted by orlandovacationhome on Jan 21

On this post, we develop three scenario forecasts for the Orlando Florida short term rental industry for 2009 compared to 2008. This market includes hotels, vacation homes and timeshare rentals.

As we always indicate, no one can predict the future. If you had listened to economists predictions for Florida over the last two years you would realize that most of them have been stunningly wrong.

Although some Orlando short term rental products will fare better than others, 2009 will most likely be very bad and possibly have longer term systemic consequences than what is generally recognized today.

Best Case:

Occupancy Down 7%

ADR Down 8%

= Total Room Revenue Decline of 14.4%

Expected/Most Likely

Occupancy Down 13%

ADR Down 18%

= Total Room Revenue Decline of 28.6%

Worst Case

Occupancy Down 20%

ADR Down 24%

= Total Room Revenue Decline of 39%

Short term rentals in Orlando will be affected at many levels. Inferior product in inferior locations will be effected the most, while good product in the best locations will be affected the least.

We are advised from professionals in the field that large feeder markets to Orlando such as school groups, conventions and the UK are rapidly evaporating. Gas prices are also sneaking back up and affecting the drive markets. In addition, some theme park ticket prices are now at record highs for single day passes – even as short term rental properties slash their rates.

How we calculate the numbers using an algorithmic statistical regression is not disclosed, so always deem the authors of this blog as incompetent, and read our disclaimer above.

Orlando Tourism 2009

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posted by orlandovacationhome on Dec 12

This post assesses if the perfect storm in 2009 could hit Orlando’s massive UK tourism market. We will also detail why metro Orlando is dependent on this market segment for a healthy and vibrant tourist economy.

In 2007, approximately 990,000 British tourists(1) visited the Orlando and Kissimmee area populating Orlando vacation homes and hotels alike. The British spent approx $1,000,000,000 dollars in the metro Orlando area in 2007.

For 2009, the UK market could be negatively hit in a significant manner for the following reasons: 

1. The “wheels” have come off the UK economy(2). With the economy forecasted to slow as much as 2.3% (2B) by some to an incredible 5-10% by others(2C).
2. The British pound(3) has depreciated in value about 30% in the last three months against the dollar. America as a destination is now 30% more expensive for a British visitor.
3. The British typically book their big summer vacation in January, so Orlando has not yet been booked in many cases for the summer of 2009. This January window could slip by due to the dire condition of the British economy and Orlando could lose the chance of capturing this business.
4. Air fares have not dropped significantly(4), despite the drop in oil prices making Orlando very expensive when compared to destinations closer to Britain.
5. The British are some of the worlds heaviest credit card users and these lines of credit are becoming restricted (5).

So a significant drop in UK tourists for 2009 would be significant to the local Orlando economy and could be a real probability. If you reside in metro Orlando, this would most likely affect you.

In conclusion, Orlando relies on the British tourism market especially in September when the domestic vacation market is relatively slow. What the future holds no one knows - no one can predict the future – including us. We merely offer non-professional opinions.

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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 Nov 10

Eyebrows were raised earlier this week when HomeAway, an Austin, Texas based vacation tech company, was able to raise $250 million through venture capital sources for what CEO Brian Sharples termed opportunities for the company to pay down debt, insiders to cash in a little equity, and for the vacation home rental company to perhaps pursue additional vacation home acquisitions. This comes on top of a $209 funding several months ago.

HomeAway owns the homeaway.com, vrbo.com, vacationrentals.com, a1vacations.com, cyberrentals.com and ownersdirect.co.uk websites. They are the proverbial 900 pound gorilla in the vacation home rental and vacation home management niche of hospitality lodging. They maintain some of the best vacation villa rental inventory in the Orlando area within several luxurious vacation home communities with a plethora of pools and other amenities. Inside sources indicate that roughly 30% of its revenues come from overseas which makes its domains a prime fit for Orlando tourism and travel. These brands certainly have a strong presence in the Orlando, Disney area and Kissimmee vacation home rental markets.

The ability for the firm to acquire capital in such a rough market does indicate that the clout and respect for the vacation home management and that the vacation home rental business model is growing. Strong consistent growth and a relatively stable cash flow model has now shown to be a valuation premium in this difficult market. My guess is that the funding will in time be used to:

1. Help HomeAway and its online brands to strengthen their market positioning in Orlando and other vacation home rental markets in the Central Florida area and elsewhere

2. Make additional prudent acquisions as the dust settles during this recessionary period. This additional funding might allow the company to expand its Orlando footprint in more “drive to” vs. “fly to” destinations that may come back quicker as a result of lower gas pricing for consumers.

3. Grow its presence in the vacation home managment area where cash flows tend to be stable and where its brand presence will give the company clear competitive advantage and leverage with homeowners

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