The View From the Beach

The last several years have witnessed a significant increase in development, particularly relating to vacation villa housing. The trend continues and indeed is strengthening. Some commentators have speculated that there are as many as 40 multi-unit villa developments on the books which will add hundreds of bedrooms to the inventory on the market. Now add to that number, probably by a factor of 2x or 3x, the stand-alone villas under construction and you start to get a good idea of the feeding frenzy we’re seeing at this moment.

When is enough? How much is too much? People are starting to ask these questions, but I have to wonder whether the are even the right questions…

Initially let’s take a crack at the validity of the numbers. While the property marketeers are out there flogging at least 40 developments, the reality of the situation sees perhaps only 2 dozen viable projects. Of those two dozen, only a portion actually have spades in the dirt. The development game loves to sell off the plan, when at all possible. That invariably means some plans never materialize due to changing market conditions, lack of interest, etc. The point being: Don’t let the commercial multi-unit developments number fool you. We’re not anywhere near the lunacy one observes in places like Phuket.

Next, let’s factor out the hotels who have jumped on the villa bandwagon and are constructing villa-type accommodations under their hotel brands. These units just don’t come into this analysis — these are hotels, people! The hotel market is a thing unto itself with market characteristics that are distinct from the villa business. (Arguably some of the multi-unit complexes passing themselves off as villas are hotels, too, but that is a topic for another post!)

On the subject of the individual villas under construction, one must keep in mind that this is not a coherent market. Individual villa construction is driven by private owners who exhibit a wide range of motivations, from pure investment to pure whimsy. Generalizing about the individual villa market is fraught with peril. About the best one can safely say is that some of these villas will enter the commercial market — and that’s a slim reed from which to hang any meaningful trend analysis. Their impact on the market long-term, in other words, is extremely hard to predict.

The potential for over-development is a threat primarily in two key areas: burden on infrastructure and the environment, and impact on the market. In the next couple of posts I will take a look at both these topics.

Stay tuned…

Off to another villa open house in a few minutes. This time we’re headed to Villa Mako. This villa has an interesting story: The owners are long time Bali afficionados. They lived here in the region, working out of, I believe Hong Kong (or Singapore?) and had considered building The Bali Dream Home for ages. Finally, though, they found an existing house on a great piece of land and decided to renovate — a virtually unheard of decision here. (They bought from Elite Havens, by the way!).

They went through a couple of developers before they found the right partner, but they eventually got it right. The result is lovely. It is really a tribute to perserverance, dedication to a vision and a job well done.

The photo, above is may favorite of the first set of images — I think because I know the place and to me this sort of casual, relaxed elegance totally describes the place. Makes you want to hang out there. Chill.

The property is managed by BHM and will now be open for rental. It will see it’s first commercial guests this Christmas. ’twere it I….

This was another weekend of checking out new properties. Friday night I got my first look at the recently-completed villa Indah Manis. Though they are still finishing off the spa, the villa is largely complete and ready to go. This is a lovely 5 bedroom property in Pecatu Hills. The villa is divides into two private units, a 4 bedroom main complex and a separate 1 bedroom “honeymoon suite.” With two pools, a gym, a spa, a billards table and a guest office, this villa has just about everything you could want. It’s the latest in a trend towards “destination villas,” that is, villas where which are a destination in and of themselves. BHM is just completing the set up operations for this property (we manage this one) and we expect it to be taking guests shortly after the New Year. No photos yet, but stay tuned…

Meanwhile the rest of the BHM team was taking a management stay at Villa Coraffan in Canggu (see photo below in the entry concerning the Villa Coraffan launch party). I dropped by today for lunch. It’s a great casual villa. Cool, comfortable and a perfect place to lounge around the pool. Villa Coraffan has 4 bedrooms with a media room which converts into a 5th bedroom. Two of the bedrooms have a “crow’s nest” — ascend a steep narrow staircase from within the bedroom and enter a tiny balcony — room for one — which looks out over the rice fields. You can bet I’d be curled up there with a book the whole time I was at the property.

The variety in accommodations is really one of the most special aspects of the whole villa experience and I am sure one of the main reasons people keep coming back again and again…

Sitting here at The Istana at the conclusion of a 2 night management stay. The Istana is a 5 bedroom property located atop the cliffs near Uluwatu Temple in the very southern portion of Bali. The villa has a fabulous view West, over the Indian Ocean. It makes for some of the most spectacular sunsets…

We (BHM) periodically do management stays at the villas we operate. The stays are intended to put the staff through their paces, to evaluate F&B and service levels, and to spend some time walking the property and discussing issues with the villa management. We try to do these twice a year, but it’s a challenge to find open slots on calendars and with people’s schedules, etc. It is also, frankly, one of the great perqs of this job…

The Istana has a staff of 22 persons and a restaurant style F&B service. As a result, quality control, training and day to day management issues are constantly a challenge. The fact the the villa is replete with wood and open to the sea breezes also brings non-stop maintenance issues. 2 pools, a proper service kitchen, genset, etc., etc., also add to the maintenance burden.

At the conclusion of this stay, it’s fair to say in hindsight that all is in suprisingly good order. We’re making a few menu changes and are actually decreasing some F&B prices, but aside from that and some changes to landscaping policy, all is well and we’re ready for the Christmas Season rush.
To learn more about The Istana, visit the website at www.TheIstana.com.

To learn more about BHM, go to www.BHMVillas.com.