It’s been an interesting few weeks in the villa holiday space here in the UK, a very public spat between two rival companies ended earlier on this month with the closure of the business behind Villa Parade.
This has created confusion for customers who had holidays booked this summer and has no doubt also affected some property owners quite badly at the same time.
It’s never nice to see a business go under, especially in a very public manner like this, it does prompt some questions though, why have they ceased trading and what is the real cause of their downfall? Did a social media disaster destroy them or was there more to it?
Where Did Villa Parade Fit Into The Marketplace?
Established in 1998, Villa Parade offered villa holiday packages to customers focusing on the areas of Mallorca, Majorca and the Algarve.
Along with providing holiday rentals on an accommodation only basis they also supplied full packages with flights and transfers included.
Villa Parade acted as a middle man between the holidaymaker and the property owner, responsible for the advertising and booking process for rental properties, charging owners a commission percentage for each booking made.
The Beginning Of The End
Problems with Villa Parade started surfacing towards the end of April. A rival company, Travelopo, got in contact with Villa Parade customers to tell them that the rental property they had booked was no longer associated with VP and that their booking was invalid. (Source)
Travelopo claimed that they had been approached by representatives of property owners in northern Mallorca who asked them to help ‘warn the holidaymakers that their bookings might not be valid and to try to stop Villa Parade from advertising their properties’. (Source)
Obviously in this day and age it didn’t take long for news of these claims to spread like wildfire across social media, from reading forums it seems clear that this news caused holidaymakers a lot of distress and confusion.
What Exactly Went Wrong?
Without knowing the ins and outs of the business it’s difficult to determine exactly what went so wrong to cause the collapse of Villa Parade.
Travelopo claimed that property owners had not been paid by Villa Parade for over a year and this forced them to stop working with them and therefore withdraw their properties from VP.
Some holidaymakers found that properties they believed they had booked through VP were also listed on the Travelopo website and were marked available for dates they had paid for.
This does seem to paint a picture that Villa Parade, for one reason or another, had not been paying property rental owners for bookings. If this is true then it is understandable that the owners would stop working with VP and find another partner to advertise their properties.
Why hadn’t they been paid for over a year then? Perhaps we will never know, but I would have thought that property payments should have been held in a ring-fenced account by Villa Parade before being promptly transferred to the property owners.
Who’s To Blame?
A director of Villa Parade blames Travelopo for the closure of the business, ‘we have been fatally wounded by the Travelopo attack’. (Source)
But is this really the case? Sure, bad news like this being bandied around on social media and emailed to your customers is pretty devastating, but it would have been easily dealt with IF they had been able to fulfil all their bookings.
The fact that there was more than a grain of truth to these rumours was the real disaster.
And what about Travelopo, did they do themselves any favours in this whole mess?
In my opinion they entered into a no win situation as soon as they started claiming Villa Parade customer bookings were invalid. This caused them to be subjected to a high court injunction which forced them to publically retract their statement about Villa Parade. (http://www.travelopo.com/statement)
It also seems to have come to light that they have been struck off the ABTA register for failing to comply with financial regulations. A search on the ABTA website seems to confirm that they are no longer a member, despite them still claiming so here: http://www.travelopo.com/spain/about.php
In the eyes of a holidaymaker these two companies don’t exactly do much to raise confidence for the private holiday rental sector as a whole do they?
Property Owners Also Losing Out
There has been a lot of publicity surrounding the closure of Villa Parade, and the plight of customers losing out on their accommodation bookings has (rightly) been criticised.
There is also another party here though, the property owners themselves.
If claims that some of them haven’t been paid for use of their properties for over a year are true then this could spell financial disaster for them.
With properties often generating anywhere between £600 up to £6,000+ for a week’s stay, and many owners relying on rental income for property bills and their own incomes as well, then it’s fairly easy to see that a loss of just a few weeks income would be significant, never mind a whole years’ worth of bookings.
There are risks and costs associated with renting out a property of course but when you are paying a company a decent level of commission to handle things for you then it is especially disappointing when things like this occur.
Do these events put you off from advertising your property using an agency or as part of a commission based sales model? Where you affected in anyway by the collapse of Villa Parade? It would be interesting to hear your side of the story in the comments.