Local Residents Views

[Guest Peter James]

Interesting discussion on Radio Devon over Easter.

One Landlord came on and complained that all 5 of his holiday apartments were empty over Easter, and all the campsites were full with people camping all over the place.

Another local resident came on and said 'Bloody Good Job Too' You should turn your 'Holiday Apartments' back into housing and rent it out to local people as there is a dire shortage of affordable housing!

So they are not all against us :-D

[Guest Tracker]

This view seems to support the perceived trend away from 'property based accomodation' towards 'portable accomodation' holidays and leisure breaks and goes some way to explaining ever increasing site fees and problems some folk have with getting a site for peak holiday periods - supply and demand.

 

With ever more home from home facilities available in all forms of camping and caravanning units more and more people who are unable to live without mains electricity, freezers, microwaves, central heating etc are finding the advantages of portable holiday accomodation outweigh the disadvantages.

 

We just have to hope that most of them will never take to CL/CS and temporary holiday site leisure - so we had best keep that little gem our own little secret!

[BGD]

I dare say that if that Landlord really understood the "invisible hand of Adam Smith" (the laws of supply and demand) then he could have filled all of his apartments over Easter.

 

All he had to do was reduce the prices to the point where customers actually took the apartments.

 

Example: If he'd offered them at (say) 100 quid each apartment for 4 nights, I'm sure he'd have let them. But at (say) 400 quid each........not a prayer. So instead of getting 500 quid towards his fixed costs, he's now got nothing at all.

It's no good saying "I can't afford to let them out at only 25 quid per apartment per night." Because that at least avoids you having to say "I didn't get any revenue at all."

 

 

 

If there's one thing worse than dropping your prices to get business, it's keeping them unrealistically high and getting no business at all.

In a recession (OK the UK is no longer technically in recession, but you know what I mean), there is utterly no point in keeping your prices high and going out of business because you are not competitive. When there is less potential customers money, you have to fight even harder to win a proportion of it...by being better value for money. You have to offer more, or you have to charge less.

 

So over Easter his fixed costs remained the same, but because he set his rental prices too high, he got no revenue at all to contribute towards those fixed costs.....people either did not stay away over Easter at all, or chose to stay in other places/via other means that they felt provided better value for money.

 

In reality, business takes no prisoners. It isn't a moral activity. Nor is it a social service.

Him getting no business is not other peoples responsibility. That was a consequence of his pricing/advertising decisions and lack of market/economic understanding. It was his responsibility.

That's why the owner of a business can get rich from it: he takes the (net) profits. But it's also why he can lose absolutely everything when it goes bust, because he takes all the risk too.

 

 

 

 

 

 

 

[Guest Peter James]

I guess we have still got high property prices because of low interest rates.

 

With interest rates below the rate of inflation borrowers are effectively being paid to borrow money, because in real terms they are paying back less than they borrowed.

 

Savers are effectively subsidizing borrowers, but that can't go on forever.