A little over 10 days ago local Ibiza villa retailer ‘International Villas’ went into liquidation just as we were heading into peak season. It seemed a strange time to go under and even though there were a few sinister rumours flying about when you consider that villa payments are due by the beginning of August it was possibly just a case of negative cash flow in difficult trading conditions?
The villa market in Ibiza is now an important part of island commerce with many investors buying a 2nd home to rent out and also many locals refurbishing their inheritances for a secondary income. The recent government initiative to simplify the legalization of holiday villas has also meant that it’s now become a viable money spinner rather than a cash in hand, nod and a wink extra.
Never has there been so many villa companies, agents and middlemen, when I started renting villas in the mid 90s there were only 45 registered properties on the island (no wonder they were mostly fully booked). Any internet search will now reveal over 3000 villas online and that doesn’t include the ones that aren’t advertised.
Airbnb is a recent phenomenon that has become popular however there is a fundamental flaw in their system; Because the owners/retailers don’t receive any money until after the client has arrived they reserve the right to cancel the booking right up until the last minute. This is OK for a short city mini-break but not very reassuring when you are responsible for a group of 10 people for 2 weeks in August. Your money may well be protected but that’s no consolation if your booking is cancelled the day before your arrival.
The entire villa market has also taken a PR bashing as internet shysters have been defrauding holiday makers on an industrial scale, UK’s Primetime TV show ‘Watchdog’ even ran a section on it putting the MD of Owners Direct under the spotlight and in the hot seat. Is it any wonder that tourists have decided to go back to town centre hotels especially as Ibiza is raising its game in this field.
So taking all this into consideration the demise of International Villas isn’t too difficult to understand.
So under these conditions is there a future for Ibiza’s villa market? Of course there is but it’s a competitive business and owners and agencies need to find a way to differentiate their product from the rest.
If you are a prospective villa client then do your homework, speak to the owner/agency in detail, ring their office, check their website and look for 1st person reviews. If you follow this advice then it will soon become clear if the person or business you are dealing with is reliable or not. If in doubt then don’t book with them as there are always plenty of other options. Don’t just take their word for it and don’t send any money to strange bank accounts in even stranger countries.
The good news is that with all the competition there are some amazing bargains to be had meaning that modern villas with private pools can sometimes be cheaper than 2 star hotels. So proceed with caution but with a little common sense you will soon be sipping cocktails in your own private pool watching the world’s most famous sunset with some extra money in your pocket and a great big smile on your face.
3 thoughts on “Ibiza Villas: Stick or Twist?”
Really need to get on this and book a villa for next year for the family.
The villa rental companies really need to get together to put some sort of bond in place because this will happen again. It’s the nature of a competitive business. But, it’s not just the specific rental company that suffers. Stories about people losing or being asked to pay twice for their holiday accommodation reflect badly on Ibiza generally and the rental business specifically.
It’s often very hard to know if a rental company is rocky from the outside. International Villas has been trading for some time, has offices in the UK and on the island. How could you have recognised it was in trouble?
There were plenty of rumours on the island, which have now turned out to be true. But to report them earlier or spread them through social media could have been irresponsible. It’s possible to wreck even a healthy company by saying it’s in financial difficulty, let alone one which is struggling to survive.
As a business journalist I used to face this dilemma all the time. You’re pretty sure a company is going under, but you don’t want to be the one who bangs the final nail into its coffin. Thanks to reporting the truth, you’ll be told, the bank has withdrawn its lifeline and everybody’s out of work.
That’s why you need a bond in place. It won’t stop villa rental companies going bust, but it would prevent tourists losing their money. That’s got to be good for Ibiza and the rental market.