I am trying to begin to work out what I would get if I buy a holiday chalet. I can see others on the same site and how much they charge but how do I begin to estimate occupancy rates?! Is there an average occupancy or what?! I just want to see how much I can expect to get from the chalet in a year to cover my costs. Thank you!Working out occpuancy/ what I will get from this.. HOW?
Working out occpuancy/ what I will get from this.. HOW?
Hi, sorry, me again I am trying to begin to work out what I would get if I buy a holiday chalet. I can see others on the same site and how much they charge but how do I begin to estimate occupancy rates?! Is there an average occupancy or what?! I just want to see how much I can expect to get from the chalet in a year to cover my costs. Thank you!
I am trying to begin to work out what I would get if I buy a holiday chalet. I can see others on the same site and how much they charge but how do I begin to estimate occupancy rates?! Is there an average occupancy or what?! I just want to see how much I can expect to get from the chalet in a year to cover my costs. Thank you!Bunny wrote:That is very much a 'how long is a piece of string' question. It is dependent on so many factors, for example, location, target market, demand, seasonal trend etc. Can you provide any further information?
Sure!
It is a holiday chalet in Isle of Wight. Near the sea, bit of a walk to the shopping part. No clubhouse at the moment (site awaiting to be bought).
Other chalets there charging up to high £400s for August.
Chalet can sleep 4 - double bedroom, bunk beds, but some also have a sofa bed so potentially sleep 6 although they aren't big so would be a squeeze!
Site is closed from early January until March.
Thanks
Unfortunately, that is a very different market to mine, but there are members on here with a similar set up, who will be able to give you a much better idea, with the further information you have provided.
When we went into holiday lettings I did a lot of research into tourism. I established that hotels hope to achieve 80%+ occupancy. I achieve around 90% but that it is because I am in a more central/tourist destination and also get business lets in winter.
I would imagine that the IOW is very seasonal (hence the winter closure) but as a start, I would use the park's opening months as a good guide to when they expect to be able to take bookings). With a less unique property, your pricing will need to in line with others, so I would just do the maths for the average price on your site for the months available.
I'm sure others on here will be able to give you a more realistic occupancy percentage rate.
When we went into holiday lettings I did a lot of research into tourism. I established that hotels hope to achieve 80%+ occupancy. I achieve around 90% but that it is because I am in a more central/tourist destination and also get business lets in winter.
I would imagine that the IOW is very seasonal (hence the winter closure) but as a start, I would use the park's opening months as a good guide to when they expect to be able to take bookings). With a less unique property, your pricing will need to in line with others, so I would just do the maths for the average price on your site for the months available.
I'm sure others on here will be able to give you a more realistic occupancy percentage rate.
If you have a chalet, refurbished to a good standard with good quality fixtures, fittings and furnishings, then there should be a reasonable demand for it, although I know nothing of the Isle of Wight market.
Your occupancy level will then also depend on how much time and effort you're prepared to put into marketing it. If it's good quality, marketed extensively then you could expect high, even full occupancy between March and October, with some occupancy in November and Decenber. That would be your best case scenario based on my observations in the Norfolk market. Worse case is whatever figures you want to pluck out the air and the fact that everyone has to catch a ferry to get there so that has to be factored into their holiday costs. Short breaks are popular, would they be with the cost of a ferry too? Don't know.
The more corners you cut, or if you furnish it with leftover mismatched old furniture then the less bookings you're likely to receive and the lower prices you'll have to charge.
Your occupancy level will then also depend on how much time and effort you're prepared to put into marketing it. If it's good quality, marketed extensively then you could expect high, even full occupancy between March and October, with some occupancy in November and Decenber. That would be your best case scenario based on my observations in the Norfolk market. Worse case is whatever figures you want to pluck out the air and the fact that everyone has to catch a ferry to get there so that has to be factored into their holiday costs. Short breaks are popular, would they be with the cost of a ferry too? Don't know.
The more corners you cut, or if you furnish it with leftover mismatched old furniture then the less bookings you're likely to receive and the lower prices you'll have to charge.
I think there is going to be little demand outside the peak season. The cost of the ferry makes short breaks too expensive.
Apart from walking, most things shut after the autumn half-term and the season doesn't start till April.
I love the IOW; but don't think it's the best location financially.
Do you live on IOW yourself or would you get someone else to run it for you?
Apart from walking, most things shut after the autumn half-term and the season doesn't start till April.
I love the IOW; but don't think it's the best location financially.
Do you live on IOW yourself or would you get someone else to run it for you?
Thank you for your reply.newtimber wrote:I think there is going to be little demand outside the peak season. The cost of the ferry makes short breaks too expensive.
Apart from walking, most things shut after the autumn half-term and the season doesn't start till April.
I love the IOW; but don't think it's the best location financially.
Do you live on IOW yourself or would you get someone else to run it for you?
I love the IOW too, but I do not live there..apparently a changeover clean would be £30 per stay, but then I think I would need someone to be on hand in case of emergencies.
I have had a look at the chalets and most of them seem to have all of August booked and few weeks in September, obviously I cannot now see how busy they were May-July! I was hoping for few weeks each month May-July, most of August and couple weeks in September maybe with couple short stays in April and Sep-Oct. Impossible to know though!!
You did make interesting point thought that ferry costs would take into account as it can be costly. I am in Bristol and probably wouldn't do less than 5 nights in IOW, saying that have done a 4 night stay.
Nemo wrote:If you have a chalet, refurbished to a good standard with good quality fixtures, fittings and furnishings, then there should be a reasonable demand for it, although I know nothing of the Isle of Wight market.
Your occupancy level will then also depend on how much time and effort you're prepared to put into marketing it. If it's good quality, marketed extensively then you could expect high, even full occupancy between March and October, with some occupancy in November and Decenber. That would be your best case scenario based on my observations in the Norfolk market. Worse case is whatever figures you want to pluck out the air and the fact that everyone has to catch a ferry to get there so that has to be factored into their holiday costs. Short breaks are popular, would they be with the cost of a ferry too? Don't know.
The more corners you cut, or if you furnish it with leftover mismatched old furniture then the less bookings you're likely to receive and the lower prices you'll have to charge.
Thank you. Agree about the short breaks and NewTimber also said this below you.
As I put in my reply to that post I was hoping for few weeks each month May-September (and full in August). As you say that's me plucking out of the air!!There are a few chalets in the park that are of a higher standard so would compete with that!
Thank you for you adviceBunny wrote:Unfortunately, that is a very different market to mine, but there are members on here with a similar set up, who will be able to give you a much better idea, with the further information you have provided.
When we went into holiday lettings I did a lot of research into tourism. I established that hotels hope to achieve 80%+ occupancy. I achieve around 90% but that it is because I am in a more central/tourist destination and also get business lets in winter.
I would imagine that the IOW is very seasonal (hence the winter closure) but as a start, I would use the park's opening months as a good guide to when they expect to be able to take bookings). With a less unique property, your pricing will need to in line with others, so I would just do the maths for the average price on your site for the months available.
I'm sure others on here will be able to give you a more realistic occupancy percentage rate.
If you live in Bristol, why are you thinking of buying in the IOW?
I don't think this will be a good financial investment - it's really only of benefit if you want to use it a lot yourself.
From a financial point of view, the returns will be higher in places that you can get all-year-round bookings and which you can visit and inspect regularly to ensure standards are maintained.
I don't think this will be a good financial investment - it's really only of benefit if you want to use it a lot yourself.
From a financial point of view, the returns will be higher in places that you can get all-year-round bookings and which you can visit and inspect regularly to ensure standards are maintained.
It is just what I can afford cash! There aren't many holiday-type places near me. There is Devon but that is slightly more expensive. Again though I still wouldn't be able to visit that that often as I work full time.newtimber wrote:If you live in Bristol, why are you thinking of buying in the IOW?
I don't think this will be a good financial investment - it's really only of benefit if you want to use it a lot yourself.
From a financial point of view, the returns will be higher in places that you can get all-year-round bookings and which you can visit and inspect regularly to ensure standards are maintained.
Hmm..!
I just checked the Red Funnel ferry crossing from Southampton, as an example, which I did myself this year and thoroughly enjoyed. 
The price, booking now for a midweek October break, arriving Monday returning Friday, was approx £64 for timings that weren't peak but weren't middle of the night times! That isn't an unreasonable amount, but the accommodation would have to be worthy of those costs. I notice you get 25% discount off the ferry if you book accommodation listed on their site so that would be something to look into.
For our holiday, I bought a package from a hotel that included the ferry crossing as expect the hotel gets a better deal than I would as an individual. I think looking at helping your guests with ferry costs would be a good way of marketing a holiday there. I would also market the ferry journey over as part of the holiday, so you've started your holiday even before you've reached the island.
The price, booking now for a midweek October break, arriving Monday returning Friday, was approx £64 for timings that weren't peak but weren't middle of the night times! That isn't an unreasonable amount, but the accommodation would have to be worthy of those costs. I notice you get 25% discount off the ferry if you book accommodation listed on their site so that would be something to look into.
For our holiday, I bought a package from a hotel that included the ferry crossing as expect the hotel gets a better deal than I would as an individual. I think looking at helping your guests with ferry costs would be a good way of marketing a holiday there. I would also market the ferry journey over as part of the holiday, so you've started your holiday even before you've reached the island.
No point buying something just because it's what you can afford. For it to succeed you have to invest something of yourself into it, whether that's simply checking on it for repairs and maintenance or going for regular short trips. If the ferry costs don't work for you to do regular trips then it's not a great starting point. I also wouldn't buy a chalet as an investment, unless you're sure you can achieve the figures you need. You don't get much, if any, capital growth on a chalet as it's effectively a depreciating asset due to the lease length. Therefore the asset is in the income it can bring in. Being on an island brings in an added stress.HPD wrote:It is just what I can afford cash! There aren't many holiday-type places near me. There is Devon but that is slightly more expensive. Again though I still wouldn't be able to visit that that often as I work full time.
Hmm..!
Having said that one of my hubbies colleagues lives full time on the IOW and commutes to the mainland every day. These things can work for you if you want them to.
£30 seems awfully cheap for a changeover. Does it include your towels and linen?
The biggest issue for guests is having a property which is cleaned to a high standard. People will look around and see absolutely everything when they arrive so you must be confident that what you are paying will get you the standards that you need, particularly as you are not on site to check the cleaning standards.
The biggest issue for guests is having a property which is cleaned to a high standard. People will look around and see absolutely everything when they arrive so you must be confident that what you are paying will get you the standards that you need, particularly as you are not on site to check the cleaning standards.
+1zebedee wrote:£30 seems awfully cheap for a changeover. Does it include your towels and linen?
The biggest issue for guests is having a property which is cleaned to a high standard. People will look around and see absolutely everything when they arrive so you must be confident that what you are paying will get you the standards that you need, particularly as you are not on site to check the cleaning standards.
Also, do you plan to take dogs? This will help bring in bookings out of peak season, but it will require more cleaning.
Having read more about your personal situation, it wouldn't be an attractive investment for me. I think you could spend far too much of the income generated from a 9 month year, on fixed overheads and travelling over to sort out any problems. Good property managers/maintenance people do not come cheap either. Or does the site provide these services?