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Brewing Battlelines

Category: , Posted:24 Jul 2010 | 10:45 am

The Phuket Gazette.
The term "non-traditional accommodation", which refers to vacation homes, condos, or apartment rentals, is slowly becoming more than a blip on the hospitality sector's radar. Competition is heating up between this rising market and traditional accommodation, which typically refers to hotels.
One move that recently caught the attention of the hotel and tourism world is the launch of 'Exclusive Villas by Paresa', a new venture by the private pool villa resort of the same name in Kamala's Millionaire's Mile. Paresa has seized an out-of-the-box opportunity to take advantage of its existing high standard of service to take on outside villa management and rental services for its nearby neighbor, Villa Amanzi at Cape Sol.
The use of Paresa's facilities for villa owners and guests, such as the spa, restaurants, fitness center and others, are included as part of the deal and provide an increase of incremental revenue for the villa.
Paresa's General Manager, Scot Toon, views the move as a win-win for both the hotel and villa owners.
The new trend of extending the hospitality services of major resorts to neighboring private residences is becoming increasingly common. The Outrigger Laguna Phuket Resort's new service offerings and InVision Hospitality's move into Bangtao's The Residence are a few other examples.
Following the real estate market slump in the wake of the Thaksin coup and the global financial meltdown, brokers increasingly moved into the more stable environment of estate management and the associated off-shoot of rentals. The past two years has also seen the emergence of a number of independent-villa booking sites on the internet.
For many real estate agents, resales and rentals are currently providing the support for their livelihood amidst an ongoing hope for a property rebound. Often heard in whispers and behind closed doors, agents continue to wonder if the property boom is gone for good, or if it is just waiting for a jump start.
What is becoming evident though is that like any developing business model, the ability to adapt is essential for survival. Hotels are slowly diversifying and entering the scene of rentals, creating a bridge between two major competing markets of the tourism industry.
At the same time, villas are slowly learning how to play the volume-based strategy that dominates tourism-industry thinking. What that means is that prices will inevitably drop in the near future. Ultimately, the end loser to the game will be the property owner, who simply wants rental yields commensurate with their investments.
Non-traditional accommodation remains important in any resort destination. It offers great niche products and value for the money. Be it condo-hotels, oceanfront vacation homes or even an apartment rental, the options are attractive.
In today's market, though the hotel supply continues to surge, these types of properties all need some sort of management, sales and marketing operations in order to compete. Determining who is better at this – hotels or agents – there are merits and demerits for both. Scale often lacks personality, but it does add reach.
I remember sitting on a rock at the southern tip of Africa at the Cape of Good Hope a number of years ago. It was mesmerizing to watch the convergence of two great oceans as they swelled and swayed, each giving and taking but continuing to be part of the same.
Much can be said for hotels, rental operators and booking sites. As for the appeal of Phuket, they all contribute to the tourism scene in their own valuable way.

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