Villa Secrets Cape Town Rentals – Market Share 2016 & 2020

By Nick Ray Ball 30th October 2016

To Download the Spreadsheet: Click here to Download

This document explores the macro potential of Villa Secrets Cape Town, its purpose is not to set a target, rather to explain that if we reach optimum growth by 2020, that there is room is the marketplace for each company we partner with.
This document considers three different markets, current bookings market share, mandate market share and bookings made from villa secrets initiatives that create new market share.

Index

• Villa Secrets Market share 2016 & 2020
• 2016 Market share
• 2020 New Market share
• The 4 Primary Villa Secrets Rentals Companies
• Making Provisional Bookings from Exclusive stock
• Shared office and staff saves over 50% of costs.
• A brief breakdown of each of the 4 primary websites
• Market Share 2020
• Founding Companies
• Additional Companies
• Total 2020 Market share
• POP (The Pressure of Profit Investment System.)

It’s important to note, that unlike our forecasts for Villa Agency’s such as ‘CTLV 3 Year Business Forecast.’ This Market share forecast does not use ‘QSF’ (Quantum Safe Forecasting) to provide a minimum forecast where all variables are set at lowest probabilities. In fact, this forecast is quite the opposite, it looks instead at the highest probabilities.

We are not saying we expect in 2020 to own:

1. Existing market share (bookings) 20%
2. New market share 37%
3. Mandates created by network 26%

What we are saying is that if we do, it does not affect the financial forecasts created for the 4 primary Cape Town villa websites, instead the network helps to enable them.

I have prepared a video; however, some information has since been updated, in-particular the 2020 market share percentages seen above

Villa Secrets Market share 2016 & 2020 (33 Minutes)

Please download the Spreadsheet: Click here to Download

The video and the spreadsheet show what is possible by 2020, however this plan does not take into consideration the many other global locations where the price of rent is higher but the competition is fewer. Such as LA, The Hamptons and Hawaii.

And because of these lucrative opportunities, until we create the technology to create new websites in a couple of days (or hours) not a couple of months, we look at the creation of each new website in terms of return. Is the creation of a 5th Website in Cape Town likely to generate more money that our first in LA? Possibly not.

However, as the long-term macro plan for S-World and Villa Secrets is to unite as many companies as we can within one network, from the beginning we need to include optimum scenarios.

2016 Market share

Market share 2016 R 120,475,781
Villas we don’t know about x25% = R 30,118,945
Total Market share 2016 R 150,594,726

Before we look at 2020, a quick word on how we valued 2016 Market share. On tab 2 of the spreadsheet we have added all the villas that we know of and assigned them a safe 46% occupancy (safe in that we would expect more) and factored in an average commission of 25%.

Plus, we have estimated that there are another 25% of villas that were booked that we did not know about. So, valuing the amount of commission made from luxury villas and apartments including quality holiday homes at ZAR 150,000,000

2020 New Market share

Airbnb & others add 50% to market share 2020 R 75,297,363
Experience Africa & other safari specialists add another 50% R 75,297,363
Villa Secrets Jet Set partners adds a further 50% R 75,297,363
Total Market share in 2020 = R 376,486,816

Airbnb.

By 2020 we believe that Airbnb and companies like Airbnb will increase the properties available by about 50%, as such companies are introducing a lot of home owners to short term rentals and are popularising villa holidays in general

Experience Africa and Safaris Specialists

By 2020 we hope to increase market share by 50% at the top end due to the effect of S-World Experience Africa and other Safari tour operators such as Rhino Africa and &Beyond if they join the network.

Our reason for perusing this option is that we hope to see many of tour operators and safari specialists promoting Cape Town as a must-see option (in season) for multi leg jet-set travellers. We want to see our villas presented for the Cape Town leg of the journey. The price of even our most expensive villas is less than half the cost of a group of 8 going to a luxury safari. So, it’s not the case that the safari loving jet set are not coming to Africa, the current problem is that when they do they extend to book a Cape Town villa.

Villa Secrets Network and international ‘Jet Set’ villas companies.

By 2020 we believe it’s possible for the various Villa Secrets initiatives creating an affiliation with the very best Jet Set villa and travel companies to encourage an additional 50% of market share at the top end.

If we look back at the spreadsheet tab 2 ‘2016 Market share’ we see that about 40% of total market share is for 64 luxury villas of 5.5 star and higher grade. In the case of both Villa Secrets and Experience Africa we are looking to introduce what we call ‘Jet Set Spending’ which we estimate could double the size of the bookings market plane at the top end.

For this to materialise we would need to see an increase in the amount of 5.5 star to 7 star villas available. Which is very possible, there are hundreds of such villas, all four of the primary networks will gain such mandates and in addition we are creating companies whose primary function is to add such villas to our collective portfolio.

However, to make it worthwhile for the property owners, we need to increase the amount of Jet Set clients by more than double.

On paper this is not unreasonable, as currently the amount of Jet Set villa clients in Cape Town renting villas is low in comparison to say ‘The Caribbean’ or ‘Luxury African Safari’s’ where prices for a group of 8 are about $14,000 a night, which is far higher that any Cape Town villa.

However currently as neither the safari tour operators or the international villa rental companies that book the Caribbean have a good stock of Cape Town villas, Cape Town villas are not being offered as a first option.

By including safari tour operators and international villa companies within Villa Secrets we open the door to new markets, particularly at the top end.

And importantly to note for those who are interested in the 4 primary Villa Secrets Cape Town rentals companies, is that for each booking a safari specialist or international villa company generates, the company that holds the mandate will make there 10% in commission. It quite possible for CTLV (Cape Town Luxury Villas.com) and the other three Cape Town primary rental networks to generate a significant amount of their gross profit from safari tour operators and international villa companies.

Note the CTLV 3 Year Business Forecast considers that over half the bookings from each mandate will be booked by others in or affiliated to the network.

The 4 Primary Villa Secrets Rentals Companies

What we can be sure about is that in 2017 the above four websites will be online. Currently 2 of the above (CTLV 2013 and Cape Villas 2002) are on line, but have not been upgraded to the latest Villa Secrets systems design.

One can look at this collection optimistically or pessimistically, some have said that they see the other websites as competitors, however whist this is the case…

It’s better to be competing as a collective unit in the big leagues with a 2020 target of 5% of market share, than be just a 1% market share player competing with everyone, with no expectation of gaining market share.

Making Provisional Bookings from Exclusive stock

The biggest single problem we face on a day to day basis is presenting villas to clients that can be readily found on other websites. Currently we see about 1 booking made from every 5 enquiries we receive. If instead of presenting client’s villas that were available from multiple sources, we sent villas that were not available from any other source, we would likely improve or closure ratio to 1 in 3 or even 1 in 2.

All the above websites plan to gain property mandates, plus we are creating websites for companies that only recruit mandates. Each company will receive 10% commission from every rental made. However, it is more likely than not, that when it comes to making the booking, it is one of the 4 primary websites that converts, and when they do they will receive 15% of the commission (the same as the CTLV 2015 average). As such each mandate recruited by any villa secrets company is an opportunity for another villa secrets company to make money.

We are creating a system, where, when any Villa Secrets company responds to a villa request for a Villa Secrets mandated villa, or send such options to a client, that they can for a limited period make a provisional booking on that villa, which means no other company can offer the villa. This is a big point that will only be appreciated if one is already in the industry.

Shared office and staff saves over 50% of costs.

On the subject off advantages to a network company, via the other companies in the network, it’s well worth mentioning the ‘Villa Secrets Africa’ shared office and staff initiatives.

Most companies need certain staff to do one job or another, but in the low season the hospitality, concierge, admin and financial staff often have little to do.

Instead of each company hiring such staff, all will contribute to a collective staff pool, which collectively covers the essential positions but adds and an efficient SEO, content marketing, social media and PR division. With hospitality staff dovetailing between PR and Media in low season and client liaison at busy times.

The following is taken from the Villa Secrets Africa organogram which presents the full staff compliment we wish in Cape Town by 2018 plus the shared office.

Note that several the following positions are dual roles, where for instance the hospitality staff may double as presenters and social media marketers.

1. Office and all office related costs except telephone bills.

2. Office Staff

• Office Management
• Admin
• Financial Management Media Management

3. Content Marketing Staff
(Note that both S-World Villa Secrets and Villa Secrets Africa have SEO & content marketing divisions, but in general Villa Secrets Africa focuses on local solutions and S-World Villa Secrets looks at international opportunities)

• Photographer
• Video Cameraman and producer
• Copy Writers / Live Chat operators
• Local SEO & SEO & Another SEO
• Media Manger
• Social Networks manager
• Awards managers
• Print media

4. Hospitality & Concierge Staff

• Hospitality Manager
• Concierge Manager
  Note that for the best concierge we are looking to create a network with an existing concierge company.

5. Property Management

• Portfolio manager
• Maintenance Staff
• Domestic manager/liaison

  Note that Villa Secrets does not provide property management, rather we create a local network for property managers. The above staff are there to manage the network and offer support in times of emergency.

6. Sales Staff

• a. Pan African Travel Specialists
• b. Safari Specialists
• c. 24/7 Lie Chat (Built up over time)

  Currently the first-year costs for this support is far greater than the income that is forecast. If we sell one of the four Villa Secrets Cape Town Primary Rental Networks, or sell the Real Estate Network’s first licenced company, this shortfall is addressed. If this income does not come, we will build up one staff member at a time. We have just hired a photographer and are looking for a content writer.

A brief breakdown of each of the 4 primary websites

1. Cape Villas.com
www.capevillas.com
Cape Villas is the original Villa Secrets Network website created in 2002, which since 2011 has been run as a using a system like a franchise. This website needs an upgrade to the Villa Secrets Web Framework

2. Cape Town Luxury Villas.com
www.Cape-Town-Luxury-Villas.com
This is the prototype website that proved itself in 2015 by creating as much turnover in its first year as Cape Villas.com. As it has a track record, after Cape Villas.com which is not for sale, it becomes the most attractive investment. The proposal for this website in online. Click here to see.

3. Villas in Camps Bay.com
www.VillasInCampsBay.com/blog
(Note this website will be similar to VillaSecrets.com, the current site is just there to show Goole some fresh content and create a history)

This website is the first website planned to be created from the Villa Secrets framework. This website is expected to equal the income of Cape Town Luxury Villas.com

Whist this website licence could be sold alongside CTLV to generate more development income, the current plan is to exchange equity in this venture for 2 key staff members, one is sales and one in mandate recruitment. Said staff/directors would not exclusively work on this website, rather all websites, and make commission from bookings made or mandates won, plus share the profit of the website the jointly own.

Said directors would be a great asset to the rest of Villa Secrets Cape Town and most likely Villa Secrets Africa and beyond as we head for the USA.

4. Cape Luxury Villas
This website is reserved for the first real estate company we connect with. Like www.VillasInCampsBay.com we will start with a small blogsite to show Goole fresh content and create a history. (A history shows Google that a website has not simply been made in a few weeks and shows hundreds of properties, rather it has been made more naturally, as pages are added over time.)

Market Share 2020

Returning to the spread sheet and tab number 1, ‘Market Share 2020 (AC1) (2).’ In the second section, down, we can see the four primary websites under ‘Founding Companies.’ Plus, Villa Secrets Africa and Experience Africa.

Founding Companies

Below the second column shows gross profit and the 3rd is the percentage of market share owned by each company. Where after we show the niche (main income source) of the company as either ‘Bookings,’ ‘Mandates’ or ‘New Market.’ New Market which is when a booking is made to someone who was not thinking of going to Cape Town and staying in a villa until one company or another in our network presented the experience, so creating new market share.

CTLV R 20,093,717 5.3% of total market share Bookings & Mandates
Villas in Camps Bay R 20,093,717 5.3% of total market share Bookings & Mandates
Cape Villas.com R 20,093,717 5.3% of total market share Bookings & Mandates
CLV Real Estate R 23,160,796 6.2% of total market share Mandates & Bookings
VS Africa R 20,000,000 5,3% of total market share New Market
Experience Africa R 40,187,434 10.7% of total market share New Market

TOTAL R 143,629,381

11.5% of existing market share created from bookings.
11% of market share attributed to mandates.
16% in new market share

‘VS Africa’ will generate bookings from African multi-leg trips & bespoke holidays. Advertising on villa related keywords in Africa and globally such as the keyword ‘Luxury Villas.’ Villa Secrets Africa will not be competing with the current market in Cape Town, instead looking at African markets and in general people who are looking for the best villa holidays, but have not yet made up their mind which country they wish to visit.

Below ‘VS Africa’ we see ‘Experience Africa’ for more details click here. In short, Experience Africa wished to become a significant player in the safari industry on both an individual safari level and tour operator level. And in so doing raise a significant amount of income for the fight against ivory poachers.

Pats on the back aside, as mentioned previously, the Safari industry at the top end has many Jet Set clients who can more than double the demand for top end Cape Town villas if channelled correctly.

Both ‘VS Africa’ and ‘Experience Africa’ will book villas mandated to other Villa Secrets companies, however they will take very little away from the 4 primary networks in terms of enquires as they are competing in a different market.

The 4 primary networks market is search engine requests for people looking to book a villa in Cape Town. Whereas VS Africa advertises on African and generic global keywords such a ‘luxury villa’ or ‘Exclusive use Safari.’ Which are both different marketplaces.

In continuation, Experience Africa is again competing in a different market, as it presents two, three or four leg safaris first packages that also include a Cape Town Villa. Creating a new market, not fishing from the same pond.

Lastly on this point, is that it’s important to remember that most bookings made from VS Africa and Experience Africa will be for villas mandated to one network company or another, where the company that owns the mandate is given a 10% commission.

Additional Companies

See Villa Secrets Network Cape Town & Africa Organogram

In addition to out four primary rentals companies, we will create some or all of the following.

Architect Co 10,046,858 2% Mandates
International Real Estate Co 11,580,398 1.5% Mandates
Property Developers 10,046,858 2% Mandates
Safari Specialists 40,187,434 10.7% New Market
International Villa Co’s 40,187,434 10.7% New Market
Villa Secrets Apartments 20,093,717 4.3% Apartments
Other Companies 40,187,434 13.3% Bookings + Mandates
Total 127,330,134 44.5%

As we can see from the above figures, some of the potential ‘Additional Companies’ focus on mandates, giving any primary rental company additional stock which they can offer to clients without fear that the client will find the villa else ware or for less money.

In addition, come the Safaris and International companies who direct their existing clientele to Cape Town Villas, creating new market share, increasing the amount for jet set clients that visit Cape Town.

We wish to market Cape Town as the jet set winter sun villa location.

Total 2020 Market share

In the final section of the spreadsheet we see the totals of market share if all the companies presented so far.

1. Bookings made within existing market share 20%
2. Bookings made from new market share 37%
3. Mandates created by network 26%

In all cases, the market share we suggest is not effected by the law of diminishing returns. There is room in the market for further growth and there are opportunities to further increase the market.

At this point, in 2020 growth would be expected simply by the improvements month by month to the TFBMS and M-Systems. As such the best avenue for spending shareholder discretionary income and Villa Secrets systems spending would be to start a new company in a different location.

One distinct advantage of being a ‘founding primary network’ is that such companies can skip the que and choose locations for new companies. Given 500 potential prime locations, and as many as 20 companies within each, once Villa Secrets has proved a success in Cape Town and one or more international territories (such as Hawaii & LA) there will be a great number of companies and individuals who would wish to join the network.

Until we perfect the web framework, so it can be made completely automatically, we will have a lot more partner applications that we can create websites for, creating a development que that could stretch tens of year’s. Albeit if this were so we could afford more on development and so could make sites faster… But even then… There will still be que…

Founding primary networks can skip that que and choose and can chose their own locations

POP (The Pressure of Profit Investment System.)

At this point in 2020 we advise the best way to re-invest profit is to create or join another fledging network, in a more expensive location such as Hollywood or The Hamptons and take that company from 0% to 5% of market share over 3 years, and follow on creating company after company until the founding primary Cape Town network is an international network with a foothold in many locations.

Should a founding primary network create suitable portfolios in more than 8 locations then they will be awards an interactions domain, such as ‘JetSetVillas.com or ‘VillasCafe.com’

The beginning of such a venture would start simply by hiring a local copywriter/researcher and photographer, who via the CRM know exactly what to do and do not need local management.
After we have but 10 villas online we can make the location live on Villa Secrets and create a starter website.

After about 8 months, the 2 man/woman team would have enough quality stock online to warrant a dedicated company. One may choose to travel to the location to assist in the setup, or simply find a suitable local company or set of individuals to take equity and run the division. The later lessening the equality one would have, but increasing the likelihood of that company’s success and subsequent creation of more companies. The mathematics of POP plus an effect of string theory which we wish to emulate known as high string coupling say that a founding primary network, could own shares and receive dividends from over 1,000 different S-World companies within a decade.

For more on POP see http://network.villasecrets.com/m-systems/m-systems-a-digital-theory-of-everything-1-03#the-pressure-profit-investment-system

Note that research so far has shown the US as a location with higher value homes but less competition, it’s quite reasonable to assume one could be 10 times more profitable in LA, Hawaii and the Hamptons than Cape Town. Mostly due to the weakness of the Rand, but equally there are a lot richer people in and near the location.

Villa Secrets Magic Mandates

By Nick Ray Ball 16 September 2016

Welcome to Villa Secrets Magic Mandates. Presenting a million reasons to put your property marketing in our professional hands.

This section currently presents four documents.

1. 1,000,000 Reasons to Sign a Villa Secrets Mandate (take me there)
2. ZAR 1,000,000 marketing budget due diligence (take me there)
3. Villa Secrets Sample Mandate (take me there)
4. 19 ways Villa Secrets will attract Sole Mandates. (take me there)

As if having Africa’s most jaw dropping website in our portfolio alongside Cape Town most famous villas website in our group was not enough. Due to an awful lot of math-first business development Villa Secrets announces the ZAR1,000,000 ($70,000) mandate.

Where Villa Secrets network will dedicate ZAR 1,000,000 in direct marketing for qualifying villas to boost both the rental yield and sale price. And do so charging a commission that is considerably lower than the Cape Town industry average.

Index
1. 1,000,000 Reasons to Sign a Villa Secrets Mandate (show me more)
a. 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000 (show me more)
b. Choose from the best vetted bespoke Property Managers (show me more)
c. Best Rental Return on Investment (show me more)
d. Prepare for Sale (show me more)
e. The Villa Secrets Network – Big Spender Firepower (show me more)

2. ZAR 1,000,000 marketing budget due diligence (show me more)
a. What is a Qualifying Villa? (show me more) (download spreadsheet)
b. The Magic Mandates Spreadsheet (show me more) (download spreadsheet)
c. Circular Events (show me more)
d. Additional Cost Price Branding Options (Paid for by villa owner) (show me more)
e. For Sale Mandates (show me more)
f. Itemized list of all costs incurred in the ZAR1,000,000 marketing budget. (show me more)

3. Villa Secrets Sample Mandate (show me more)
a. Basis for the Agreement (show me more)
b. ZAR 1,000,000 Dedicated Marketing Budget (show me more)
c. Property Management (show me more)
d. Commission Rates (show me more)
e. Villa Rates (show me more)
f. Prepare for Sale (show me more)
g. Accounting (show me more)

1,000,000 Reasons to Sign a Villa Secrets Mandate

For Luxury Villa Rental & Sale Mandate

By Nick Ray Ball 16th September 2016

Index

1. 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000
2. Choose from the best vetted bespoke Property Managers
3. Best Rental Return on Investment
4. Prepare for Sale
5. The Villa Secrets Network – Big Spender Firepower

1. Villa Secrets Offers a 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000 ($70,000) for suitable properties (as is pictures above) worth about ZAR 40,000,000 ($2,800,000)

For a ZAR 40-million-rand villa, a ZAR1,000,00 outlay in dedicated marketing and development is a great deal more than any other villa rental agency we know. In fact about 95% more.

It is also over twice the amount a real estate agency would make from the sale after referrals and agent commission. (Although we do not know how much of that commission they allocate to direct marketing, but we can be relatively certain that they will not spend more than they earn)

Please note when we say ‘paid for from commission,’ we mean ‘commission’ this package is paid for from our commission. It is not a ZAR 1,000,000 marketing expense that we would recover from your booking revenue.

Lastly on this point, our commission of 20% for direct bookings and 25% for selected affiliate booking is significantly lower than the average of 20% for direct bookings and 40% for affiliate bookings which is the average in Cape Town for the bigger agancies.

So what is the Villa Secrets, Secret?

At Villa Secrets, we see this outlay as the minimum one should spend on marketing to get the best rental and sale price. However, if you want to know how we can afford this when others cannot/do not please consider the following.

a. When you sign a mandate with a villa secrets franchise, the franchise receives significant backup/funding for the head office Villa Secrets ltd UK. Nearly 60% of the ZAR 1,000,000 comes from Villa Secrets head office and marketing divisions.

Villa Secrets Ltd UK is a technology driven company intent on creating and supporting franchises across the world, starting with the most desirable locations. Villa Secrets Ltd UK does not rent or sell villas, instead they provide the websites, content, imagery, PR and marketing for their franchises and their franchises mandated villas, seeking to increasing the SEO gravity and expand size of the Villa Secrets network.

As such, the ZAR 1,000,000 in costs, only costs the villa secrets franchise about ZAR 110,000 a year, which can easily be afforded, especially given the following…

b. Due to the ZAR 1,000,000 in additional marketing on top of an already competent multi-site network including www.VillasSecrets.com, www.CapeVillas.com & www.Cape-Town-Luxury-Villas.com. Villa Secrets franchise will receive multiple booking requests for popular dates. In the case of the lucrative 14 night Christmas and New Year Booking, which guaranteed over ZAR 1,000,000 it’s quite possible to book that slot 10 times over.

And so we make these extra enquiries count, by using them to book other villas. Which we estimate will double a franchises income.

As such, by spending ZAR 1,000,000 in marketing we generate near twice the income, see the spreadsheet ‘Magic Mandates’ and go to the second tab ‘booking Income.’

Below we see the summary, where we can see that due to the marketing we perform the ‘Villa Commission’ increase (along with the villa owner’s income).

However, in addition we also see residual income of 50% in the first year and by year 3 we expect to make more from residual income that we do in direct commission.

The simple combination of the above makes the ZAR 1,000,000 affordable. And note that the ZAR 1,000,000 is cost price, and over 50% cheaper than a dedicated agency would charge as they need to add profit and tax.

For Due Diligence on this point click here.

Below we see a breakdown of costs, including some optional extras at cost price. To download the full spreadsheet, click here

2. Choose from the best vetted bespoke Property Managers

We have been managing properties in Cape Town since 2004 and we created our first PMS (Property Management System) in 2006. Experience has shown us that the way to get the right balance for the owner and guest is to use small owner run agencies, or capable individuals.

However, unless one knows the industry well, it’s a risk for owners working with an individual or small company. If things don’t run to plan, there is no recourse, and trust can also be an issue particularly when villa owners do not live in the same province or country as the property manager.

This is where Villa Secrets fills the gap. We know the best property managers and we are happy to recommend them. Villa Secrets does not charge a referral fee for recommendations, the only condition is that we do the marketing and manage the bookings calendar.

Should you be unhappy with your property manager we are on your side, after all we make money from bookings, not the managers.

3. Best Rental Return on Investment

Given a minimum of a ZAR 1,000,000 marketing budget, we will create a great rental return. There is quite a lot of strategy behind the initiative and some we can’t say as our competitors will follow us. But what we can say is that we know that a lot of clients who find a villa on an agency website or channel like Booking.com, search for the villa on Google and try to book direct. When they find the villas direct website, they feel like they have cut out the middle man.

When a client comes to your site, they will be very impressed, in the same way people are with Villa Secrets. This website also becomes a source of direct bookings as we create dedicated Google AdWords accounts and advertise on relevant keywords. The budget for this and remarketing is about ZAR 80,000 a year and is the main cost centre for the Villa Secrets rental franchise you sign your mandate to. (Quick note, once one signs a mandate with any Villa Secrets franchise the villa becomes a priority for VillaSecrets.com and all other franchise which spit the commission)

As for Booking Channels, we pay for HomeAway Platinum package and a number of other subscription based websites. We use the channels that are likely to create bookings. But we don’t use channels that don’t produce as it takes away from the exclusivity. In the case of ZAR 100,000,000 ($7,000,000) properties we would keep the villa very exclusive and focus on getting it on the books of the top 50 global luxury travel and luxury villa agenesis, who would not be far less interested if the villa was on Airbnb or Booking.com. In addition, we create a system that as soon as an agency has presented a villa to a client, the rest of the affiliates cant book it, which creates a very safe environment for all involved.

Add all of the above to our growing network of Luxury Cape Town villa agencies including www.VillasSecrets.com, www.CapeVillas.com, www.Cape-Town-Luxury-Villas.com. Plus, our 16 years of experience in Cape Town which has over the years seen Conde Nast Traveller recommendations and other accolades and we are confident that one will not see better return, or for that matter a better increase in prestige equating to an increase in the value of your home

4. Prepare for Sale

Note that in addition to increasing the value of your villa, the following also increases the frequency and rate for rentals.

We appreciate that many owners looking for a rental agency are not considering selling, many have just purchased. And that some owners wish to leave the door open for the property to be sold, should the right offer come along.

In the case of the former, owners who are not selling, in most cases the day will eventually come when one sells. And in this case, we ask that the Villa Secrets be award the first opportunity, in the form of a 3 month exclusive sales mandate.

We can’t say what the future holds, we are looking to create franchise partnerships with one, two or even all of the big estate agencies. However, if that does not occur, such agencies will happily present the villa to their clients for a split in commission, that is how may sales are done in Cape Town, the agencies all work together.

Usually this would be a 50/50 split, however Villa secrets would only require 25%, and an additional 25% would be given to the agent who referred/recruited the property to us in the first place, so long as they were active in Cape Town.

Our job is to prepare the villa for sale and do whatever we can to increase the value. We do this via various initiatives.

What Villa Secrets does that no other estate agency does is provide all the affiliate estate agents with suitable and powerful marketing and PR materials to assist the sale, and can make holiday makers aware that some buyers will be visiting during their stay.

a. The Estate Agent’s Pack

(Note the print marketing items within are cost price optional extras, or half of cost price for villas over ZAR 70,000,000)

A pack of magazines brochures and DVD’s that the villa has been featured in

a.i. We have deals in place with with magazines such as Conde Nast Home & Garden about sponsored editorial. Conde Nast appreciate that the quality content we provide sits well in their magazine and everyone loves Africa. So far we have been offered a significant discount for 4 page editorial spreads in which we would feature an exclusive use safari lodge such as Ulusaba, a private island such as Cousine Island & a Cape Town Villa. The brand association alone within a trusted magazine in priceless, and it leads to many other opportunities. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

We will receive 200 or so magazines, some for your villa, some for other villas, some for you, some for potential big bookings and at a good number for the Estate Agent’s pack, so each potential buyer received not a single piece of cardboard for some pictures in it, but a significant bag of goodies which adds to the villas prestige, and so its perceived value.

a.ii. We are creating great articles to luxury travel blogs and magazines for them to display. Over time we shall become guest bloggers and writers for a number of quality trusted publications and websites.

a.iii. We will create a dedicated brochure that gets sent to guests and put in the Estate Agent’s pack. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

a.iv. We shall create a DVD which will contain all TV work that has been in broadcast and videos that we have made.

a.v. The Villa Secrets Magazine, whilst this is in our opinion the most significant part of the estate agent’s pack, and a more significant rental multiplier. We are a little way away from completely presenting the format.

We last published a magazine in 2009 and distributed 30,000 with Conde Nast Traveller UK. Which saw Bulgari phoning us to say, ‘We did not know you had such luxuries in Africa’ and asked if they could be the main sponsor in our follow up. (for more money that the first magazine cost us)

We will soon be reconnecting with Bulgari and hope they still wish to participate. This magazine will cover Africa and only have a few Cape Town villas featured, so it’s a first come first served opportunity. Villas will be shown either in 4 or 8 pages. And our hope is whoever our main sponsor will be will wish to product place their couture or diamonds within the first few 8-page villa slot.

One thing one can be sure of is that being in this magazine and the magazine being a part of the estate agents pack or sent to rental clients will increase the prestige of the property. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

b. The Website.

By the end of the first year the website will be a great asset. Superb photography, videos and content with a 2020 theme using HTML5 animations made from the Villa Secrets framework, and also including a WordPress blog that looks much like our own. See blog.villasecrets.com.

It’s worth a minute having a look at some of these blogs. I recommend Serenity, Moondance, Ulusaba & Cousine Island. Compare these pages to any other blog on any other website anywhere in the world and appreciate our passion for delivering beautiful web pages.

It’s not hard or expensive to make a good looking website nowadays. But it is hard to make an exceptional one. However, it’s the content that costs the money, most sites are let down greatly by their lack of quality content. This is not a problem at Villa Secrets as we are in part a very passionate content marketing company.

c. Awards and top 10 websites

A villa that wins an award such as The Word Travel Awards add’s a distinct air of recognition that will of course increase the value of the property. Our CEO and PR staff will do all that we can do to get villas nominated for such awards.

The same applies to Conde Nast readers awards and other such honours. However, a lot lies in the service package, a Villa Hotel for instance (as is mentioned in the next point) will stand a better chance than a standard villa.

In addition to applying to existing awards and authorities we are creating our own. This idea originated when we realised that there was a need for a better awards system for Safaris than www.SafariAwards.com , which did not mention any of the best or most popular safaris in its 70 plus awards. So we started work on our own system that used data from other awards and award winning tour operators to create a genuine platform.

We are still far from completing this but we have got the domains:
AfricanSafariAwards.com
SafraiAwards.org
Top10Safari.com

We have however started to experiment with Villas.

Have a look at www.top10CapeTownVillas.com ,it’s not complete but you get the idea. In all honesty any of the top 6 could be No.1 depending on what a client or purchaser wants from a property. And so with good confidence we can set its order in different ways. And when it’s time to sell, your villa rises to No.1.

On a more official capacity linked to our non-profit company (in making), we are creating the following awards programs and developing custom software to power each award.

ArchitectAwards.org
WorldVillaAwards.org
AfricanVillaAwards.com

We see no reason why the Conde Nast magazines we are writing for, will not let us present the AfricanVillaAwards.com results in our editorial. So long as it is transparent and judged fairy and honestly. Lucky for us we are only interested in properties that would on their day win such an award so there is no conflict of interest.

We would not do a top ten, instead we would likely have a number of top 3’s, such as

Best African Villa
Best Private Island
Best Villa Hotel
Best Cape Town Villa
Best Exclusive Use Safari Lodge

We will be starting the AfricanVillaAwards.com in early 2017

d. Villa Hotels

A Villa Hotel is a villa that offers the services of a Hotel. For example, free breakfast, complimentary drinks, a private chef, and in some cases a butler. The best known example in Cape Town is the Ellerman Villa.

If The Pentagon villa offered such a service package it would likely have won the The Word Travel Awards African Villa Category, as opposed to just receiving a nomination.

However, A Villa Hotel requires the additional expenses associated and excellent management of such services, and is a serious commitment. But for those who wish to be very serious about raising the prestige and so the ‘for sale’ value of their villa, this option should be considered.

e. Big Brand Photo Shoots and Ads.

There is nothing like a big glamorous brand like ‘BVLGARI’ doing stills shoot or advert at the villa. Each such add, properly catalogued increases the villas prestige.

We have a clever initiative for your consideration to choose or not. In general, photo shoots are not economically viable as they are for only one or two days and they can block a bigger booking, plus they are high maintenance and the money is never great.

So in general we don’t do a lot of shoots. However, a big brand shoot is great PR. So we suggest we offer all such brands and the local production companies a 50% discount on the shoot, and then use from 25% to 50% to pay for oversight, admin and PR.

As a part of the deal we will insist that we be given all complete material and ask that they make a video of them making the shoot for our benefit.

In terms of timing, we would either select dates that were near another booking or take bookings on a last minute (within 2 weeks basis)

These videos and marketing materials then go on the website in a dedicated blog and is added to the ‘property pack.’

5. The Villa Secrets Network – Big Spender Firepower

Villa Secrets have a complex network development strategy which is very significant for Villas over ZAR 70,000,000 ($5,000,000). In these cases, with day rates from ZAR 50,000 to ZAR 150,000 there is currently limited demand.

The way Villa Secrets network strategy works is to target companies and locations where there is greater demand for such rates and then shift the demand to Cape Town, or in the case of multi leg luxury safari and private island travellers from 5 star Cape Town hotels to 7 diamond rated villas.

One example would be to create a franchise with one of the big Safari companies, there are plenty of people paying ZAR 20,000 per person per day for Safaris, who can be tempted to Cape Town, who would not think twice at paying ZAR 50,000 a night in the winter months (which is when the Safari Season is at its peak)

Another example would be to join with a top villa company in the Caribbean, where villas are more expensive and present their clients with the option of a African villa holiday, including a safari and maybe a private Island.

Another example is to create websites for private islands such as Cousine Island, so they can book Cape Town Villas as part of multi leg trips. Another example is working with Execujet who specialise in private jets.

In the case of the above two Cousine Island &Execujet, both have agreed to us creating them an African Villas and Safari website for them to create such experiences.

We were made an offer last year by award winning Rhino Africa, and in the case of Sotheby’s Realty as early as 2009 we created them a website called ‘Africa Concierge’ which was in many ways the inspiration behind the Villa Secrets Network.

In general the Villa Secrets strategy is to find companies that have wealthy clients and recruit them to the network. And in addition create franchises in the richest locations so increasing our own client database, from which we can present Africa and Cape Town options.

Villa Secrets Cape Town – Executive Summary

Luxury Villa Rentals division

By Nick Ray Ball 09th September 2016

Villa Secrets.com (VS)
Villas in Camps Bay.com (VICB)
Cape Town Luxury Villas.com (CTLV)

To paraphrase Einstein ‘a plan should be simple, but not simpler,’ his equation E=MC2 was simple, however the detail was complex.

Under the hood, the Villa Secrets plan is also complex and has been described by a business development expert as visionary. However, on the surface it is actually very simple.

There are 5 basic components (4 profit centres and an overall profit multiplier),

1. The tried and twice tested ‘Cape Town Luxury Villas.com’ which in 2015 was managed by ‘team 1.’ Who (on a shoestring budget) generated ZAR 1,400,000, making ZAR 1,000,000 in shareholder profit. And then in 2016 it was managed by ‘team 2’ who (also on a shoestring budget) generated similar numbers

As a stand-alone business for sale, Aldes Atlantic (Africa’s most trusted business brokers) valued the company (website) at ZAR 3,300,000.

This website/profit centre is added to by the following…

2. Villa Secrets.com, luxury villa rentals in the Atlantic Seaboard of Cape Town, which will use a similar but improved marketing strategy with a greatly improved website. Doubling the potential to ZAR 2,800,000 in gross profit.

3. Villas in Camps Bay.com, which by Jan 2017 will be of a similar standard as Villa Secrets. Again using a similar strategy on a greatly improved website, tripling the potential to ZAR 4,200,000 in gross profit.

4. Villas Secrets Rentals Mandates, a 19-point strong plan to gain exclusive rental mandates, which includes a 3 year ZAR 400,000 per villa marketing budget, which is exactly ZAR 400,000 more than any other agency offers.

Based on recruiting 8 mid-to high end villas in three years, we see in year 3 this profit centre increases total Gross Profit by 39%.

5. Lastly comes what we call the TFBMS, which stands for ‘Total Financial Business and Marketing Software,’ in two sections Total Marketing Software, and Total Financial and Business Software.

Alongside taking care of the management accounts and organizing hospitality and service functions, this software steadily increases the profitability of all profit centres, and turns every Villa Rental Mandate into an independent profit centre, with its own website and marketing plan.

Considering the above, a simple way to cautiously evaluate the value of the company would be to use the ZAR 3,300,000 evaluation for Cape Town Luxury Villas.com. And triple it to include the Villa Secrets and Villas in Camps Bay profit centres making ZAR 9,900,000, Adding whatever one feels appropriate for the mandate’s income stream and the continuous improvement provided by the TFBMS.

How much is the initial investment?

We are not looking for a figure of ZAR9,900,000 and above. We are looking for ZAR 3,200,000 be it by one individual, or split between a couple or a few individuals. (Note that over 75% of this investment is spent on TFBMS & the ‘Villas in Camps Bay’ website development and CTLV and Villa Secrets Cape Town operations).

Why ZAR 3.2m not ZAR 10m plus?

Well firstly is that we want this model to be successfully at a start-up costs that is not prohibitive. Hence we are looking for the right investor for the business, someone who will get involved and grow the business. Villa Secrets intends to copy this model in many different countries, and the key ingredient in each location is the owner/CEO and his/her key staff.

Secondly, this model is closer to a franchise than the purchase of a business outright. In that there are a few necessary staffing appointments and a marketing and development contribution of about 4.5% of turnover.

However, unlike a typical franchise, the mother company ‘Villa Secrets Ltd’ acts as a marketing and development company. Turning that 4.5% of turnover into more than a 4.5% increase for the business owners.

The result of the above two points drops the estimated shareholder profit in the first year, down to not much more than that was made on the ‘shoestring’ budget approach on 2015/16. However, the investment pays off big in the years that follow.

In a forecast made recently, using what we call ‘Quantum Safe Forecasting,’ which uses the lowest probability applied to all income streams and multipliers we forecast:

Year 1, ZAR 1,000,000 shareholder profit
Year 2, ZAR 2,000,000 shareholder profit
Year 3, ZAR 4,000,000 shareholder profit

You can see the particulars, spreadsheets, and some videos here. However, this is a little out of date as the Villa Secrets income stream was set to be split with Villa Secrets Africa (who will deal with multi leg villa holidays, safaris and flights) 50/50, and now the split is 75/25 in favour of Villa Secrets Cape Town.

In addition, there was a limit on the amount of property mandates of 8 villas. This has now been changed to at least 16. The result, if Villa Secrets Cape Town can achieve 5 mandates by the end of 2017 and 16 by the end of 2019 is:

Year 1, ZAR 1,300,000 plus.
Year 3, ZAR 7,000,000 plus.

We have been asked how we can be so certain of these figures. However, for the answer one needs to look at the detail. In particular the spreadsheets which are complex and are actually a part of the design of the TFBMS software with over 4,000 different variables. All of which have been set to the lowest reasonable probability.

If one wishes to examine, the detail is found at Network.VillaSecrets.com and in particular within the ‘VS Cape Town’ Section.

Villa Secrets Network

One strong reason for not achieving such results but achieving more, lies in the concept that Villa Secrets is a network of businesses that work together, and within Cape Town there will be a number of different businesses.

This concept has been confusing for some. But consider ‘Villa Secrets’ like Hatton Garden, the street that attracts many customers to many jewellery businesses. Or Harley Street for doctors, or Wall Street for bankers…

There are many benefits to working within The S-World Villa Secrets network and few downsides. We are currently focusing on 3 Villa Secrets companies.

1. Villa Secrets – Luxury Villa Rentals – Cape Town
2. Villa Secrets – Real Estate – Cape Town
3. Villa Secrets Africa

One immediate advantage of the network is a large additional marketing and development pool, paying for luxuries from full page ads in Conde Nast Traveller to bidding at position 1 for generic (not in a specific locations) keywords such as ‘Luxury Villas’ in Google & Bing. Not to mention the TFBMS will be developed faster and as a result all profit centres will boosted.

The above points (and others) will increase the amount of bookings that are made on the Villa Secrets website, and so the profit of its rental company.

Where the ‘Hatton Garden Effect comes into play strongest is in Property Mandates. With the power to show clients villas on full page Conde Nast Ads and over ZAR 400,000 budget on other direct marketing, mandates will be easier to attain (a lot easier). In addition, when securing a mandate if one can present a network of companies working together as opposed to an individual, they become easier still.

As for the competition, well yes, there will be competition for mandates. But seeing the brand is ‘Villa Secrets,’ for rental mandates many would wish to be with the company that handles the Villa Secrets bookings, which is this company.

There is another component to mandates. And that is that in each case we only offer the max marketing budget if the owner also agrees the Villa Secrets Real Estate company be given the first shot at the ‘for sale’ mandate when they wish to sell. However, this is moving into the territory of the real estate presentation…

Market Share

What is important is market share, for which we use the symbol ‘ϻ’ within our equations. When including all Cape Town’s holiday villas, luxury villas, and apartments the total value of the market is about ZAR 957,885,420. Which leads to about 143,000,000 in commission. By the end of 2019, in part due to the global marketing Villa Secrets will perform, and the properties we wish to mandate, we expect the marketplace to be ZAR 1,475,560,019 and the commission kitty to be about ZAR 221,334,025

In 2015 CTLV’s gross profit was ZAR 1,400,000, which is close to 1% of the market. However, in year 3 we have a ‘Quantum Safe’ forecast between 14 and 19 million ZAR, a 6.4% to 8.7% share of the commission available.

The way ‘ϻ’ works in our equation is limited to the growth forecast of any network to a maximum 10% of market share, and the Villa Secret network of companies to 50%. As we can see, currently projections are below this threshold.

There are other companies into consideration which focuses on mandates and other niches (such as apartments in the city, property development and architecture). However, the combined total is 34% of market share. And most of these companies are recruiting new villas which in itself is to increase the market share, as currently there is four or five times the demand for Villas in peak periods than are available, hence each new villa that chooses to let short term as opposed to long term increases the market share for vacation rentals.

Lastly, and whilst this is a complex system, seen here if VS CT Luxury Rentals were to underperform and others over performed, significant additional marketing will be used to boost the company back on target. Not only does the network create new opportunities it also guarantees the success of every company in it.

Welcome to the Cape Town Villa Secrets Network

by Nick Ray Ball 26th Aug 2016

Villa Secrets Cape town is a proven business model which we have been working on since 2002 with the launch of the website www.CapeVillas.com and our 2014 recreation of that website www.Cape-Town-Luxury-Villas.com run by a new team which proved itself in 2014 and 2015.

In Cape Town we are now looking for a new team to run this website and others. In addition, we are looking to expand the network in other real estate related areas such as property sales & architecture.

Please note that some of the data on these pages has been updated or is simplified.

1. 19 ways Villa Secrets will attract Sole Mandates

Visit 19 ways Villa Secrets will attract Sole Mandates webpage

This page tells of 19 different ways the various companies in the ‘Cape Town Villa Secrets Network’ will recruit properties to our network. Not the least of which is our ZAR 600,000 ($41,000) three-year commitment to specifically marketing their Villa and developing their villas website, in part in preparation for sale at a favourable price.

2. CTLV 2017 to 2020 Financial Roadmap

Visit CTLV 2017 to 2020 Financial Roadmap webpage

This page presents a set of 5 spreadsheets and series of videos which present a road map to financial success for the ‘Luxury Villa Rentals’ company ‘CTLV.’ Which present a conservative shareholder discretionary income (net profit before tax) which we are confident will not be less that ZAR 4,000,000 (USD$ 275,000) in year 3. Note that for this forecast we created the M-System ‘quantum safe forecasting’

This income would increase in locations where property and rental values are higher, such as California, the Caribbean, Hawaii and exclusive location in the South of France.

3. Villa Secrets Cape Town Luxury Rentals – Basis of the agreement

Visit the Basis of the agreement webpage
This page is a little out of date, but is a good approximation of the basis of the agreement. Including details on the different companies, their unique marketing options and how the collection of companies makes each individual stronger.

This page also presents how the 25% of gross profit (+/-4.5% of turnover) is used and details the inspiration from Leonard Susskind which we call ‘The Susskind Boost.’ (M-Systems Part 3)

This page also presents POP, The Pressure of Profit Investment System (M-Systems Part 5)

4. Cape Town Luxury Villas.com ‘2015’

Visit the Cape Town Luxury Villas.com ‘2015’ webpage

This page leads to nine detailed pages about the performance of www.Cape-Town-Luxury-Villas.com in 2015. This is the website we have tested as a franchise model and it provides the base financial information used in all financial projections.

Valued conservatively at ZAR 3,200,000 ($220,000) now a part of a set of three websites that will be under the control of the Cape Town Luxury Villa Rentals team.

Seeing as the two additional sites have two years more work that the prototype and as one can see from Villa Secrets.com the design is superior. If the 2014 site is valued at ZAR 3,200,000 ($220,000) then the addition of two superior 2016 sites should create a value at least three times as much.

5. Real Estate Companies

Webpage coming soon

Whilst the CTLV 2017 to 2020 Financial Roadmap is specifically created for a ‘Luxury Villa Rental’ company, it is also the basis for the Realtors income. The gaining of 8 high end villa mandates by Year 3 generates 38% of the turnover in and gross profit year 3.

In the case of Realtors, we would expect them to recruit more villas. If a realtor were to generate 20 high end and 10 top end villa mandates for rentals, this alone would generate over ZAR 10,000,000 ($700,000) in shareholder discretionary cash flow (pre-tax net profit). This is before considering the income gained from property sales.

See 19 ways Villa Secrets will attract Sole Mandates for more details on mandates.

Most Villa Secrets companies will recruit exclusive rental mandates. In most or all cases we expect the owners, given the incentives and logistics will allow an additional clause to say that when they want to sell, they will first offer an exclusive mandate to the network affiliated realtor or realtors.

This initiative will work best if the network affiliated realtor or realtors are the same as the villa owner may have picked in the first place. For that reason, we need the network affiliated realtor or realtors to be leaders in their field. Ideally the top Cape Town high end Estate Agency and the top Internally know affiliated Real Estate Agency, specifically Christies or Sotheby’s

With a target of 50 villas mandated to the network by the end of year 3 and most agreeing to the sales mandate, the realtors affiliated to Villa Secrets stand to make a good income from selling the villas.