Villa Secrets Cape Town Rentals – Market Share 2016 & 2020

Villa Secrets Cape Town Rentals – Market Share 2016 & 2020

By Nick Ray Ball 30th October 2016

market-share-2016-2020

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

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-2016-2020-img3

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

market-share-2016-2020

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

market-share-2016-2020

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.

villa-secrets-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

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.

shared-office-and-staff-saves-over-50-of-costs

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.

shared-office-and-staff-saves-over-50-of-costs-2

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

the-4-primary-villa-secrets-rentals-companies

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

market-sahre-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

total-2020-market-sahre

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.

the-pressure-of-profit-investment-system

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