2005 to 2007 started a different journey for Cape Villas, having created arguably the world’s best villa website and undisputedly the world’s greatest collection of virtual tours, that would see Google emulate into Google Street View a few years later. The stage was set to become not just a company with a great website, but also a great company.
For this, Cape Villas adopted a simple motto: “More than a set of keys,” and created a goal to aspire to: recognition from Condé Nast Traveler, who were without doubt, the main authority in travel, certainly to the industry itself. In addition Cape Villas created an new way to gain exclusive properties, which was to take out long-term leases on properties with permission to sub let, between 2004 to 2005 Cape Villas took long leases on the following properties
This saw Cape Villas entered the specialist area of Property management, which like any new venture, had its ups downs and teething problems. The ups were in the ability to offer properties to clients immediately, as opposed to having to call the owner. In addition, prices could be more readily compromised in winter and the shoulder periods, such as early December and Mid January.
On paper it was a money-spinner, but for three factors, firstly and obviously; dedicated staff were needed to look after and prepare the properties. Secondly, the costs for upkeep spiralled to excess creating the need for financial staff to deal with the administration. As up to that point with twenty or so bookings a month, the finances were all managed by Nick Ray, via a simple program, within an excel spreadsheet and on line banking. Another problem, which was not immediately noticed, came the fact that whenever a guest was placed into an exclusive property, money was not made from a standard sale.
In 2005, we approached the accounting company owned by the owner of one the villas Cape Villas leased, and soon after a dedicated book keeper and a General Manager were appointed. Along with the named partners in the accounts firm (Aplley & Resnicov), it was decided that the Pastel accounting software should be used, the software used by 90% of accountants in South Africa. This would be the start of an extremely costly mistake, that would later lead to Nick Ray’s three year absence at the front line of Cape Villas, whilst creating a system and software that would work.
Before the placement of the new financial team, costs in the 2005 to 2006 season for property management, built up to about 25% of turnover. Due to the unexpected costs, money was tight going into the 2006 low season, so from May to August Cape Villas downsized to four permanent staff, Jenny the bookkeeper working from the accountants offices. Whilst at the front line Cape Villas current MD, Mr Oliver van der Heever and Sophie Poland worked from the newly rented small but well positioned Camps Bay shop, whilst cape Villas founder Nick Ray worked flat out from home.
The main winter mission, besides dealing with enquires was to acquire exclusive mandates on properties for the summer, with the same flexibility of controls as leased properties, but without the responsibility for upkeep and without the month rental fees. Now days, if any Villa Company receives, one or two good enquiries a day, it’s a good day, such is the expanse of other villa rental companies, travel agents and tour operators being active in the villa rental industry in Cape Town.
During that Cape Town winter period, from May to August Cape Villas we receive about ten enquiries a day. So it did not take long to catch up, and as the new “cottage industry” office expanded to a staff of about ten, all seemed to be well with the world, Nick Ray Ball and Oliver Van Den Heever in particular feeling proud of what had been achieved during the off season.
Word of mouth had spread of Cape Villas successes and their Camps Bay shop was seeing more villa owners signing exclusive mandates, at which point where Cape Villas created a live availability system for the website, which owners could use to check their bookings and place times when they wished to use the property. This system, worked especially well for Travel Agents and Tour Operators, who came to Cape Villas for their villa requirements. Within a year, Cape Villas would be dealing with about 50 different travel agencies across the globe.
This working with agencies saw Cape Villas introduce an STO (Standard Tour Operator) rates system, which sees a 40% commission from the owner, which was split 50/50 with a Tour Operator and Cape Villas. In the world of luxury hotels, and large Travel Agencies, this system is stuck to rigidly, with a hotel not directly selling below the “Rack” (published) price. However, there was no such restriction for small operators, and so Cape Villas agents had the capacity to offer discounts to direct clients of up to 20% compared to the published rate. This initiative saw Cape Villas booking vs. enquiry ratio, rise from about one in five to about one in three enquires. With 50% extra income coming from Travel Agents and an increase in closing deals with direct clients, Cape Villas had become the undisputed kings of villas in Cape Town, the ultimate success story.
This was the season, that the concept of “More than a set of keys was introduced.” Not only as a service initiative, it became a business initiative as in impressing clients, clients would return and talk about Cape Villas in a positive manner. With the extra money generated, a team of property managers, reps, maintenance and domestic staff was created.
One blight on this bumper season, was at the end of the season, the new financial manager and accounts company, had failed to implement or correctly configure the Pastel Accounting software. Therefore, it was decided that a hi salary, experienced manager with expert knowledge of Pastel accounting was needed full time. After interviews Ian Buchannan was chosen, 40 years experience, the last 20 of which were for the same company, a company six times the size of Cape Villas.