Stiles Bennet beat me to the Turks and Caicos this year.
The vice president and head of marketing at Newport, R.I.-based Wimco Villas, a private villa rental company, traveled to The Turks in March. I didn’t make my trip until July.
In a sense, we were doing the same thing: going to the Caribbean on business. OK, it was pleasurable work, and yes, there definitely was rest and relaxation involved, but it was business nevertheless.
I was on a travel-writing assignment (my other life) and liked the idea of going to The Turks because, in the erratic Caribbean villa rental market, the island group was outclassing the competition and I was curious to see what was going on.
Bennet wanted to reacquaint himself with some of the villas his company was renting and to check on the local property management companies that his firm had hired.
The Turks and Caicos can be found just south of the Bahamas and consist of eight main islands and more than 20 isles. For tourists and investors, the island of importance is Providenciales: This is where the action has been for the last 10 years and continues to this day.
I’ve written about the villa market in the past, but for investors the main action in North America has always been the Caribbean. Traditionally, villas are vacation homes, second- or even third-owned properties by the well-healed, who try to recapture some of the expense of ownership by putting their houses into the rental market.
Often, these are big properties, in the million-dollar-plus range (in The Turks, the average home in the villa pool sells at $3 million), although in the past decade, when anything with four walls could be sold, lower-end condominiums and resort properties were dumped into the villa market as well.
Wimco, which has been around for almost 30 years, doesn’t deal with any of these latter, or lesser, properties. All the villas that it manages as rentals are individually owned.
I contacted Bennet before I made my trip, and my first question, of course, was how the Turks and Caicos market was holding up in light of the global recession.
"The Turks has been a particularly strong market," he told me. "Our business there has actually grown in the last three years despite the recession."
One of the key reasons is the airlift. Islands, whether in the Caribbean, the Pacific or anywhere else in this modern world of tourism, live and die by lift, and The Turks and Caicos have terrific contact with its main investor and tourism bases on the East Coast of the United States.
"The island has benefited from increased access," Bennet noted. "Conversely, another up-and-coming place like Anguilla has had a lot problems because that island for the most part doesn’t have direct flights. Most fly in from St. Martin or San Juan. And the more flights you have to tack on, the longer and more expensive it is to get there."
Other Caribbean villa markets doing well include St. John in the Virgin Islands, St. Barts (good lift from Europe) and Barbados (direct flights to the United Kingdom). Meanwhile, St. Martin business has slowed, as it has at smaller islands such as Nevis.
As expected, the global recession trimmed the villa market. New development and acquisitions stopped. Rentals, which are usually contracted well in advance, dried up.
"A lot of business was booked, pre-Lehman Brothers (in September 2008, Lehman failed and the U.S. government took over a number of financial companies)," said Bennet. "Then in 2009, new business didn’t come in, and some existing business was canceled. 2010 seems to be in a nice recovery after that bottom."
Asked why people come to The Turks, Bennet ran quickly through a laundry list of pluses: tasteful development, fantastic beaches, safety, and "it feels like a happening place — Amanyara has property with a lot of buzz on the West Coast."
Amanyara? I knew Aman Resorts, having written about its new property in Utah. And, well, my travel assignment put me there with, what I confess to be, a freebie accommodation. Sorry, no reviews. I’m going to stick to business.
The property, Amanyara Villas, as the name implies is mostly a villa resort with 40 rentals and 20 villas ranging from three to five bedrooms; 15 of the villas are privately owned, and three are up for sale.
I should note that the villas are really individual compounds on about an acre of land and consist of an infinity pool surrounded by a group of separate structures, three to five large sleeping pavilions, a common-area library/dining building, an office for owners, and a preparation area where the compound’s individual butler and chef do their work.
Of the three properties, two are being sold at $12.5 million and the beachfront villa at $16 million. The resort opened in 2006 at the height of the global property boom and about 13 lots sold immediately. Things slowed to a hawksbill turtle crawl, with only one property changing hands in 2009 and another earlier this year.
According to Alonzo Barnett, Amanyara’s villa manager, almost all owners are from the Northeast, with a smattering from California, the U.K., Monaco and Canada.
Barnett wouldn’t give out names, but over the course of my visit I learned that the family of one of Canada’s ex-prime ministers and a famous record producer owned a villa, the latter of whom built a recording studio in the structure usually used as an office.
Confirming Bennet’s observations about the local market, Barnett said the 2009 rental business at Amanyara had been slow but that 2010 was working out to be a possible record year.
That’s not bad considering the rental rate for a three-bedroom villa will deflate your bank account by the outflow of $4,800 a night.
In the U.S., the villa market remains sporadic except in traditional vacation nodes such as Florida, Hawaii and ski mountains, but Alfredo Merat, founder and president of the Villas of the World website, said that even his home town, the upscale Hamptons on New York’s Long Island have begun to catch the villa bug, which he defines as one- to two-week rentals (possible maid/chef service) instead of monthly or full summer.
The changes in people’s thinking, Merat added, has to do with the recession, but could be long-term. People are not spending the way they used, so they are opting for shorter vacations. On the opposite end of the deal, even if you work for Goldman Sachs your bonus could be smaller, so why not rent out that gargantuan summer place for extra income?