Vacation Rental Under Pressure

New Divi Phoenix
New Divi Phoenix timeshare expansion, future vacation rental

Most foreigners who purchase property in Aruba has the intention to use it leisurely. Whether it’s a timeshare unit, villa, town house or condo, it’s going to be used for vacationing. If vacationing is not possible, some owners tend to borrow it to family or friends while others try to earn some money with the property by renting it out.

The biggest private offers in the fractional business are timeshare units. For example, owners who want to skip out traveling this year due to the economy, put their units up for rent. Many are doing this. Result? The market currently is flooded with offers, followed by expected drop in prices. Not only that, the timeshare owner finds it increasingly difficult to stand out and the ability to rent the unit is daunting, if not impossible.

Condo owners are faced with a similar feat. The condo business has a different dynamic. The rental business in the condo world is much smaller than the rental business in the timeshare world. Condo units are mostly luxurious, more spacious, more private and more expensive than timeshares. The rental competition is equally fierce nonetheless.

Last year I wrote an article (Aruba condo ownership) with a piece dedicated on the rental possibilities of condos in Aruba and made a simplistic calculation. Tim, who is/was a condo owner at that time, called me out on it. I don’t blame him. It isn’t easy, especially in the current market with record low rates.

I think it would be a good idea to come with a centralized platform – a website, preferably in Aruba – where owners and customers come together. Really use the power and democratic nature of the internet to bring supply and demand together. Currently when someone goes to vrbo.com, Craigslist or Google, they still come out empty at the end. For example if you Google “aruba vacation rental” or “aruba timeshare rental” you still won’t find what you are looking for. The situation is far from ideal for both the owner and customer.

Summarizing, there certainly seems to be a problem in the rental business due to supply and demand. The supply supersedes demand by much, causing prices to be at record lows. To make matters worse, supply and demand don’t come together nicely causing an even bigger disturbance in the chain, followed by owners getting frustrated because of lack of customers (revenue), and customers get frustrated because of sloppy and uncoordinated effort to streamline supply.

It’s a shame that the situation is like that, and highly unnecessary. I strongly believe that a property outside the mainstream resort areas gives you more bang for you buck. Be it a better deal, a car or wireless internet, there will be some additional perks.

Concluding

This is what we know thus far:

  • Problem – > Difficult contact between supply and demand. Also, the economics are flawed.
  • Solution -> Bring supply and demand together and let the economics determine the prices.
  • How -> Somehow a new open and free forum has to open where honest owners and honest customers can come together.
  • Even when the economy recovers, if the flawed system isn’t fixed, owners won’t see much revenue. Be it the timeshare owner, condo owner or any other private owner of Aruba vacation rental, there is need for an open platform. Perhaps I should open that open, free and high quality forum for owners and customers to come together. If time permits I just might.

    Published by

    Gabriel

    Former Aruba tour guide, trying to provide value to Aruba travelers.

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