A few words about trust & inherent risk

The vacation rental industry in Hawaii has sprung up because there are needs of both tourists and residents. Because almost all of the several million tourists a year to Hawaii are run through the "tourist circuit," there are very streamlined services that will get you from the airport to the rental car to the hotel, and funnel you to the standard tourist attractions. All of these are well equipped to handle the massive numbers of tourists and the quick turnarounds that are expected. They are professional, both in how they deal with their transactions, and also in how they extract the most amount of money they honestly can from tourists.

However, once you diverge from the "beaten trail," you start to find that the services are not quite so equipped to handle things. For example, having a vacation on the Windward Side of the island means that you can't stay in a hotel (there aren't any over here!), and there aren't any shuttle buses that will take you back and forth from the airport, and there aren't any tourist flyers that will try to persuade you at every turn to come to their tourist attractions. Instead, you have a cottage industry of vacation rentals, who are usually just doing their part to get by in a rather expensive place to live.

As a result, you get a chance to experience life as people who live here experience it, and you also get a chance to deal with people who aren't acting on behalf of large, international corporations. In doing so, there are some aspects of trust and risk that, although they are present in almost all financial dealings, are sometimes a bit more obvious when dealing with a vacation rental.

The risk and trust go both ways. Here's how it typically works. When a Guest makes a confirmation for the rental, we block out those days and turn away any other potential customers, trusting that the reservation is made in good faith. Then the Guest mails a check or other payment as deposit, trusting that there really is a property and that there really is someone there who has the right and authority to book it. At this point, the Guest is placing a great deal of trust in us, because the quality of their vacation is on the line, not to mention the deposit that will have been cashed long ago. From our perspective, we are trusting that the Guest is really coming, and that we will really be able to complete the transaction as intended. Each transaction is likely to be very important to a vacation rental operator, because there are undoubtedly some very real financial incentives for being in this business.

Just before the Guest gets on the plane, the final payment is made with a security deposit on top. That's an up-front payment for something the Guest still hasn't seen, and can only trust that really will be waiting for them when they arrive. As an operator, we are dealing with the uncertainties of making sure the check will cash, making sure the Guest will not have unreasonable demands or expectations, and in essence, making sure the financial dealings all go through as everyone hopes they will. These are real concerns, as evidenced by the high number of intentional frauds that are exercised against hotels and businesses here, with some particular targeting of small business who are not as ably equipped to protect against them (Our favorites stories revolve around the guys who came here posing as the family of Arab sheiks...they were given the royal treatment and the best of everything by a top resort hotel, which later found out that the supposed sheiks were actually just taking the resort for a free ride, and they skipped town just before checkout! The cabana they rented went for $8000 per day, and came with two full-time attendants and a chef.).

Then there's the Security Deposit. The Guest is asked to provide a significant sum of money as security against damage, and is trusting that the money will be handled and returned in good faith when there are no damages. From our point of view, we're giving free and unfettered access to a very expensive and furnished property, and trusting that it's all okay when the visit is over. While big businesses have well-established means of exacting compensation for problems, theft and damages, an independent businessperson usually does not.

As you can see, for this type of transaction to take place, it requires some trust and risk on both sides all the way down the line, which is simply the nature of the business (we also believe it means that there should be plenty of information available to the Guest, so they can feel much more comfortable about the situation). It may also be of consolation knowing that anyone who has control over a beautiful beach property worth over $1 million is likely to a lot more trustworthy than someone who does not. All we can do is offer our personal guarantee that we'll do our best to make it all go smoothly and as intended, and to give you as much information as possible so you can feel comfortable and informed. Dealing with individuals and getting off the beaten trail isn't for everyone, but for those who like a different experience in traveling, it can be a much more rewarding experience.

As an aside, you might also be wondering about the rates, and whether the vacation rental business is way to take advantage of free-spending tourists. As you will see when you get here, the property you will be staying in has a list price of somewhere between $1.2 and $1.7 million, depending on who's doing the asking and who's doing the buying. Roughly half of the property is yours while you're visiting, and at $165 per day, an occupancy rate of far less than 100%, and a wide range of expenses that are hidden to the Guest, the vacation renter's return on investment is very low (you might do the math if you want)--it's certainly not the type of business you would venture into without other circumstances being a motivating factor. In other words, vacation rentals are usually a means for creative and industrious people in Hawaii to help get by in a state where the prices are high and finding good-paying jobs is difficult. It's also a nice business to be in, because those of us who live here love to see people get a feel for the islands that is more "local" than Waikiki, and living in such a beautiful place and beautiful setting, it's just natural to want to share it with people.

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