In the space of a few weeks, this part of the industry saw the closure of one operator and a scramble for its properties followed by a major acquisition - coupled with a pledge to become market leader – and, from a smaller player, a switch to a trade focus.
The year began with Kuoni parent Der Touristik UK adding Solmar Villas to its portfolio which already includes CV Villas. Solmar, a mid-range family-owned company, will sit with CV’s upmarket product and Der Touristik’s ambition is for Solmar, which boasts 2,000 properties, to be market leader.
Solmar’s Atol authorises 3,500 passengers and CV Villas authorises 5,535, although figures can be misleading as not all villa sales include flights.
“Solmar is more mainstream in its portfolio and has a more varied distribution,” said Der Touristik UK chief executive Francis Torrilla. Solmar’s £50 million turnover is about double that of CV Villas despite average selling prices of around a third of CV’s.
“I think we can easily triple turnover in the next couple of years, mainly through selling more packages than villa-only and by more marketing,” Torrilla said, adding Solmar would be sold through partner agents.
Growth does not mean signing up more property owners, he stressed. “We already gained a sizeable number of properties – 200 to 400 from James Villas exiting the market.”
He added: “We want to become market leader, I don’t believe we need any other acquisitions because of the range of destinations across the two brands and different customer propositions.”
The taste for villas is continuing
Torrilla said CV and Solmar would operate independently. “It’s like when we bought Carrier, I thought they operated in different markets, Kuoni being premium and Carrier luxury.” He believes the villa concept’s attraction to consumers remains strong. “Villas did well during the pandemic. People got a taste for it and that’s continuing.”
Solmar picked up more than 450 properties when James Villas was mothballed in November 2023, itself a big event in the sector. James Villas’ parent Awaze pulled the plug on the 40-year-old company, deciding it did not want a comparatively small brand which relied on guaranteed inventory. Awaze, which claims market leadership in European holiday rentals and owns Hoseasons and Cottages.com, has directed clients to its Novasol brand, a pan-European giant which boasts more than 42,000 properties.
James Villas, which offered 8,000 properties, stopped selling packages during the pandemic, as did Villa Plus, citing difficulties in securing seats at prices that were not inflated. Others dispensed with Atols following a bruising refunds experience.
However, now things are back to normal, some are convinced packages are the way forward. SPL Villas announced in January it was taking this path after gaining an Atol for 4,275 passengers.
SPL, which has 1,500 properties, is clear about its reasons. Managing director Ed Frampton-Fell said consumers’ desire for peace of mind following Covid had in part driven his decision. “We’re going into the market in 2024 as a tour operator, our customers say they want the security of a package holiday,” he said.
Trade demand
There is another impetus from the trade, said Frampton-Fell. “Agents had been telling us they wanted a villa holiday company with Atol protection and flights – James Villas used to do that.” SPL has until now sold around a third of its capacity through agents; it hopes its new ability to package will see a lot more through this channel.
Gemma Lewis, director of The Villa Collection, takes 95% of bookings via the trade.
“Agents need handholding quite a lot with villa bookings and they get that from us,” she said. “A lot are nervous about booking villas, it’s more intensive than booking a standard package. They say to us, ‘this is what the client wants, help’.”
Lewis understands the appeal of packages to both consumer and trade clients.
“We’re doing more packages than previously, but some competitors aren’t going down that path (because of the pandemic refund costs). A lot of villa operators act as an agent of the accommodation. It’s understandable because they want to mitigate risk, but in the event of something happening, the client is left dealing with the villa supplier or owner.
“If we do direct business with the client we’re at pains to say, ‘make sure you have the best travel insurance you can’.”
Lewis is convinced the sector is having a moment: “The pandemic shone a light on villas unlike before about the value and travelling in a group,” she said.
The packaged villas concept
Villa Select picked up a few James Villas’ properties on Kefalonia and added Crete this year. General manager Becci Aldridge said the packaged villas concept had been favoured by both consumers and trade since Covid.
“A lot of people want a home from home since Covid. It put them off hotels and the sunbed-grabbing. They just want to be around family.”
“We find a lot of agents tend to book Atol packages and a lot of clients are now choosing them after the whole mess during Covid. We now only work with airlines we know support clients.”
SPL’s Frampton-Fell believes cost of living is another factor in villa popularity.
“A significant trend is for bookings of large properties that sleep upwards of eight people, suggesting large multi-generational families or mixed groups of friends are pooling their resources while household budgets remain constrained,” he said.
He added: "The acquisition of Solmar is an indication of how much potential there is in the villa and short term rental market.”
This is echoed by Simpson Travel, which derives 75% of business from villas and is, unlike Der Touristik, in an acquisitive mood.
“It’s a really interesting time for the villa market, especially for mergers and acquisitions,” said Ed Pyke, Simpson Travel operations director. “The industry will see a lot of that over the next two years. We are actively looking to acquire and were offered two companies last year but couldn’t agree.”
He added Simpson was especially interested in brands with regional specialisms in areas where it did not operate.
Simpson is another devotee of Atol. “During Covid, consumers really started to get to grips on what package travel regulations meant and what Atol did. We have stuck firmly with packages; we see it as a USP as others have switched off. We’ve also moved to ‘escrow’ ahead of wherever Atol reforms go. We’ve always seen Atol as a marketing tool.”
He regards the trade as another marketing arm. “We have invested heavily in agents, we now have three trade sales people instead of one. Our trade business has doubled since Covid and I think that’s a trend with other villa operators.”
Pyke also sees the multi-generational holiday trend remaining. “I think it’s been a 10-year trend; we’ve adjusted our portfolio to cater for it. It’s the ability to have space plus a lot of things associated with hotels, like private chefs.”
It’s an attractive thought as the January gloom continues and with more villa brands seeking agent support and consumers seeking the reassurance of a package, there are some good opportunities for the trade in 2024.
