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Leisure Real Estate TRENDS & OPPORTUNITIES


Acknowledgements Leisure and Real Estate Trends & Opportunities is designed for senior decision makers in organisations with the potential to enter the shared-holiday ownership leisure real estate market. It provides a starting point, together with some analytical tools and insights, to help determine whether this industry will help to grow your business and revenues. It will give you the key topics to be discussed with your professional advisors. The following pages will help you to ask and answer the right questions as you evaluate your first, or next, shared-holiday ownership opportunity. This handbook would not have been possible without the contribution of many in the industry. RCI would like to thank the following for their generous participation in this edition of the shared-holiday ownership industry handbook.

Philip Bacon

Perry Newton

Director, Planning & Development/Valuation, Horwath HTL

Managing Director, Azure Malta

Paul Gardner-Bougaard

President & CEO of ARDA

Chief Executive, RDO

Shari Levitin

Howard C Nusbaum Ramesh Ramanathan

Founder of The Levitin Group

Managing Director, Sterling Holidays, India; Executive Committee Member, AIRDA

Susan McFadyen

Tony Ridl

Director Business Services - Corporate and Commercial, Blackadders LLP, Solicitors

Managing Director, Club Leisure Group; Chairman of VOASA

Sue McNicol

Juan Ignacio Rodriguez

RDO, UK Head of Operations

Senior Vice President, RCI Mexico; Committee Member, AMDETUR

Eugene Miskelly Chairman & Board Member, RDO Legislative Counsel

Daniel Tan Director, Business Development South-East Asia, RCI Asia Pacific

Leisure Real Estate Trends & Opportunities is offered as a toolkit to senior leaders of hospitality and real estate development companies so that they can more efficiently evaluate opportunities in the holiday ownership, fractional and private residence club markets, and determine if shared-holiday ownership is an appropriate addition to their business strategy. We also hope it serves as a useful reference tool for more experienced shared-holiday ownership firms. It’s important to note that the content of Leisure Real Estate Trends & Opportunities is offered for illustrative purposes only, and that the information contained in these pages reflects general industry insights that may or may not apply to specific markets, project locations, product designs and business plans. Leisure Real Estate Trends & Opportunities should not be relied on as a replacement for project-specific feasibility studies, rigorous financial planning, consumer research, legal and taxation advice and the support of qualified advisors – all of which are important contributors to successful shared-holiday ownership projects. Financial model examples are based on historical observations and are not in any way a guarantee of future returns. With that in mind, we hope Leisure Real Estate Trends & Opportunities helps to give you some ideas as to how shared-holiday ownership can help to maximise the return on your asset investments and contributes to a successful entry into what is an exciting industry. In some cases, currencies in this handbook have been converted to Euros for consistency. All currency conversions are correct to date Jan 2017.

Leisure Real Estate Trends & Opportunities is published by RCI, a trading name of RCI Europe, Kettering Parkway, Kettering, Northants, NN15 6EY. 6EY, England. EDITOR: Helen Foster ASSISTANT EDITOR & PRODUCTION: Rebecca Gormley DESIGN: Charlotte Semark Original articles may be reproduced only with written permission from the publisher. ©RCI Europe 2017.

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Leisure Real Estate Trends & Opportunities


Contents EXECUTIVE SUMMARY Glossary of Terms .................................................................................................................................................................................... 4 The Case for Shared-Holiday Ownership ..................................................................................................................................... 5 Welcome ....................................................................................................................................................................................................... 6 Definition of Shared-Holiday Ownership ...................................................................................................................................... 7 Hospitality Trends .................................................................................................................................................................................... 8

A RESILIENT PRODUCT Why Shared-Holiday Ownership? .................................................................................................................................................. 10 European Market Resilience ................................................................................................................................................................ 11 Industry Insight .........................................................................................................................................................................................12 Holiday Ownership Margin Improvement Over Time ............................................................................................................14 Sales and Marketing by the Numbers ...........................................................................................................................................15 Case Study: The Canary Islands .......................................................................................................................................................18 Sales & Training Advice ........................................................................................................................................................................19 Shared-Holiday Ownership Spectrum ........................................................................................................................................ 20

LEISURE REAL ESTATE – THE OPPORTUNITIES Mixed-Use Development Opportunities & Benefits ...............................................................................................................22 Preferred Marketing Approaches....................................................................................................................................................23 Shared-Holiday Ownership vs Residential Product Cycle ................................................................................................ 24 State of the Nation – Europe ............................................................................................................................................................26 State of the Nation – India .................................................................................................................................................................28 State of the Nation – USA ................................................................................................................................................................. 30 State of the Nation – South Africa..................................................................................................................................................32 State of the Nation – Asia & Pacific .............................................................................................................................................. 34 State of the Nation – Latin America ............................................................................................................................................. 36

KEY SUCCESS FACTORS Physical and Non-Physical Product Dimensions .....................................................................................................................38 Strategic Considerations ...................................................................................................................................................................40 Human Resource Requirements ......................................................................................................................................................41

PROTECTING YOUR CONSUMER Europe: Opportunity for the Adventurous ............................................................................................................................... 42 Protecting the Consumer & Strengthening Credibility ....................................................................................................... 44 Considering the Contract .................................................................................................................................................................. 46

WHAT IS EXCHANGE? Working with RCI .................................................................................................................................................................................. 48 About The Registry Collection® ...................................................................................................................................................... 50 Business Advantage Through Wyndham Worldwide............................................................................................................51 Key Global Trade Associations ........................................................................................................................................................53

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Glossary of Terms Condo Hotels

Fractional Ownership

The Condo Hotel model can be applied to several types of property, including accommodation types from hotel rooms and suites to apartments, townhouses and villas. The basic model involves the sale of property which is actively managed by a separate company that contracts the services of a hotel company to market the accommodation and provide services to guests. In all cases, there will be some split of rental revenues between the hotel operator and the individual property owner, either on a pooled or separate asset basis.

Leisure real estate sold in intervals of more than one week and less than whole ownership. Fractional ownerships are usually associated with the luxury segment of holiday ownership, offering greater services and amenities.

Destination Clubs Most Destination Clubs are non–equity based. They are generally positioned very high on the quality scale and the properties tend to be fullyserviced individual homes rather than properties that form part of a larger resort environment. There is a high degree of lifestyle benefits and services incorporated into Destination Club membership and they generally offer the return of a percentage (typically 80%) of the initial membership fee, should the member decide to leave the club.

Exchange Products and Services The system that allows timeshare owners to trade the accommodations they own for comparable accommodations or travel-related services. Most resorts which are marketed under a shared-ownership model are affiliated with an exchange company. Many resort companies offer an internal exchange mechanism that allows owners to exchange to resorts within their company’s portfolio of resorts.

Fixed Week A type of timeshare ownership in which usage rights attach to a specific week of the year, each year in perpetuity for the period of ownership.

Floating Week A type of timeshare ownership where the use rights are subject to the owner reserving his or her week within a season purchased (winter, summer, etc.), or sometimes throughout the year. A year-round ‘float’ is most often found in resorts with similar seasons, like Hawaii or the Caribbean. In most cases the customer owns a right-of-use for a limited number of years.

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Leisure Real Estate Trends & Opportunities

Right-to-Use A timeshare owner’s right to occupy a unit at a resort for a specified number of years and having no real estate interest conveyed.

Points A ‘currency’ that represents timeshare ownership and is used to establish value for seasons, unit sizes and resort locations. Points are used by some developers for both internal and external exchange and frequently can also be traded for travel agency products, such as car rental, hotel nights or cruises.

Private Residence Clubs (PRC) PRCs are often associated with a five-star or luxury hotel brand and are usually either a ‘stand alone’ development or can be part of a mixeduse resort development. The interest sold in the properties generally represents an interval of time of more than two and less than 12 weeks. Located in all the prime holiday settings, PRCs offer luxury apartments and freestanding houses, combined with a lifestyle element, including services such as pre-arrival and on-site concierge, private lounge, daily maid service, in-home catering, etc.

Short-Term Ownership A category of traditional timeshare/holiday ownership which includes products that range from 5-15 years in duration.

Trial Membership A product offered after the initial sales tour consisting of travel-related products and services packaged with an opportunity to experience the resort developer’s primary holiday-ownership product within a defined period. Sometimes called a ‘taster’ programme.

Timeshare/Holiday Ownership A term used to describe a method of use and/or shared-ownership of holiday real estate, where purchasers acquire a period of time (often one week) in a resort, hotel, apartment or other type of holiday accommodation. Timeshare is also known as shared-holiday ownership.


THE CASE FOR

Shared-Holiday Ownership The Millennial is the consumer category we should be selling to today. So what appeals to them, and what doesn’t? The June 2016 Euromonitor International report identified a ‘New Consumerism’. Like many other consumer studies in 2016, it told us that Millennial buyers want value for money, choice and flexibility; they want authentic experiences; access to assets rather than full ownership. They don’t want to be committed to long-term financial exposure, and they don’t want ‘cookie cutter’ holiday experiences. The Millennial consumer demand has been, and will continue to be, a key driver in the exponential growth of the sharing economy that gives access to, on a flexible value-based premise, a range of products, from designer handbags and clothing, to upscale lifestyle products such as performance cars, yachts and holiday homes. In short, consumers in today’s sharing economy are looking for what shared-holiday ownership can give them. The Millennial market cannot be ignored. In 2016 a PricewaterhouseCoopers’ report put a value of £7 billion on the UK sharing economy, estimating that it will rise to £140 billion by 2025. Debbie Wosskow, founder of the UK’s leading second home swap business - Love Home Swap - highlighted that in 2016 an average family could save up to £8,520 annually by participating in the sharing economy, and holiday home exchange represents a significant element of that saving and lifestyle. Holiday and holiday home swap and exchange programmes, which can also be aligned to rental products, present a strong purchase proposition to those selling second homes. These buyers want to get more from their ownership and seek opportunities to swap unused time in their holiday home for different holidays across the world, as well as allocating other unused time to holiday lettings programmes to generate an income. Shared-holiday ownership is a product which benefits developers and investors in the hospitality sector, as well as delivering genuine benefits to the purchasing consumers. Here’s why: • It gives holidaymakers the opportunity to purchase a lifetime of holidays at today’s prices. • Purchasers aspiring to a second home lifestyle can afford shared-holiday ownership properties, enjoying a muchreduced financial commitment compared to a wholly-owned second home purchase. • It gives owners of second homes an opportunity to holiday swap and generate a rental income as well, if they so choose. • Owners of shared-holiday ownership leisure real estate enjoy much more holiday choice, with complete flexibility to tailor their holidays to their personal preferences in terms of destination, activities and type of accommodation. • Because their holidays are paid for up front, shared-holiday ownership owners have a greater propensity to take holidays than the

average holidaymaker, raising occupancy levels and average spend in resorts and hotels all year round. • Shared-holiday ownership can be a key driver of revenue generation in leading hospitality companies, with the potential to add value by: i.

Improving occupancies

ii. Driving incremental revenues at on-site outlets as owners have a preference for self-catering holidays and tend to spend more time and money on resort iii. Spreading management, maintenance and operational costs across a wider set of assets and range of customers iv. Reducing marketing costs v. Diversifying asset usage and opportunities.

Increasing numbers of developers of second homes’ residential real estate are entering the market in Europe, having identified the potential to add value to their sales proposition by adding a shared-holiday ownership with a property exchange and rental component.

EXECUTIVE SUMMARY

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Welcome ABOUT DIMITRIS MANIKIS Dimitris Manikis is a shared-ownership industry veteran, with more than 25 years’ experience in the business. He joined RCI immediately after university and has held many positions throughout the European, Middle Eastern and African regions, including Managing Director for RCI’s South Eastern region and also Managing Director of RCI Africa. Today, Dimitris oversees an extensive Business Development team, spanning three business regions, and spends most of his time in the air and on the road, visiting RCI clients and his team in local markets.

DIMITRIS MANIKIS

VP of Business Development, RCI Europe, Middle East, Africa

With the rise of the sharing economy, having collaborative consumption at its heart, sharedholiday ownership is set to remain one of the fastest growing segments of the international hospitality sector. The pay-as-you-live lifestyle is here to stay. Any number of studies reveal that the Millennial buyers are looking for access to assets, rather than ownership and long-term financial commitment; they want to try something new. Millennials are experience seekers – in short they are looking for the type of product that developers of shared-holiday ownership products can give them. Holiday homes are expensive and shared-ownership is the smart way to access and use them. Over a relatively short period of time, we have seen the rise of dozens of successful companies offering product sharing; Airbnb; Zipcar, Uber and Love Home Swap, an associate of holiday exchange service provider, RCI, to name but a few. Debbie Wosskow, CEO of Love Home Swap, said there are more than 350,000 official property swap listings currently online. Add to that the 21.8 million* swappers worldwide who own timeshare, and the estimated 10 million swappers in the unofficial ‘grey’ market, and you get an idea of the extraordinary potential there is in this industry to monetise hotel and leisure real estate properties. North America and Europe are the largest shared-ownership markets, accounting for more than 71% of shared-ownership resorts around the world. From traditional timeshare and upscale fractional properties, to hotels, serviced apartments and many other forms of residential leisure real estate – all have proven to be robust products. The most recent audited figures for European timeshare purchases showed sales volumes of €2.3 million. There are approximately 1,342 resorts across Europe putting 92,234 units onto the market. Resorts incorporating a shared-holiday ownership component in their business models have an average of 76% occupancy levels. RCI, the world’s leading provider of holiday exchange services, has been in the industry for over 40 years and is a pioneer of the pay-as-you-live lifestyle. In its four decades in business, RCI has seen a continual increase in the numbers of developers coming into the market, including an increasing number of established hospitality brands, and has affiliated more than 100 new properties around the world to its exchange programme each year, for the last five years. The future for the shared-holiday ownership market is one of continued growth, as developers of ever more property types seek a stronger return on their investment, while consumers are living longer and wanting more out of life in terms of experiences, lifestyle and value for money. Being a global business, shared-holiday ownership continues to be strengthened as new destinations come on board in Eastern Europe, Australia, Africa, Asia and India. The growing middle classes in countries such as Russia, China and India, having a desire to travel to Europe, are playing an important role in boosting demand for shared-holiday ownerships. These are just some of the factors which are expected to drive industry growth in the future. *Source: Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger for ARDA International Foundation.

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Leisure Real Estate Trends & Opportunities


DEFINITION OF

Shared-Holiday Ownership Shared-holiday ownership is a category of leisure-orientated, real estate products that enable multiple owners, or rights-of-use holders, to share long-term usage of an individual villa, apartment or collection of units/properties. • Shared-holiday ownership is typically understood to encompass holiday ownership (timeshare), fractional and private residence clubs. • Buy-to-Use and Let properties are also considered to be shared-holiday ownership products. • Offerings are typically leisure-orientated, often with strong recreational and lifestyle components, offering a variety and authenticity of experience. • Shared-holiday ownership is often a component of a mixed-use project development, including hotel and wholly-owned residential real estate. • While the industry has a great deal in common with other forms of real estate development, it is first and foremost a holiday product for most consumers and should not be sold as a financial investment, but as an investment in a set period of holidays and a leisure lifestyle. • The exchange component, allowing owners to exchange into properties of commensurate quality across the world, using a holiday exchange services provider, such as RCI and The Registry Collection®, is a valued and persuasive benefit for prospective shared-ownership purchasers. • Management services capabilities and hospitality solutions are integral components of successful shared-holiday ownership products. • Shared-holiday ownership can generally be categorised into two main forms: Deeded or Right-to-Use.

• Shared-equity ownerships in leisure real estate are known as fractional ownerships. Typically high-value properties in AAA locations, fractional properties have an entry price point of around £250,000 and are sold in longer use intervals of up to 12 weeks. These properties tend to follow the values of other unique properties in the neighbourhood and, at the end of the contractual period of ownership, if the property is then sold, the owners may well benefit from a return on equity if the property has increased in value over the ownership period. • Loyalty Club business models are, as the name suggests, based on a fee payable to join a club which gives its members access to accommodations, spas, golf, ski and a host of other leisure lifestyle amenities and exclusive club benefits. Club models often use a tiered membership structure so that lower fee-payers can access the introductory products, designed to give new members a taste of the brand experience, building their loyalty and trust with that brand, and affording the developer many different opportunities to up sell to higher membership levels. Up selling and selling more brand products to existing members significantly lowers the marketing costs. • Shared-holiday ownership models are generally known as timeshare or fractional properties, while a hotel or leisure real estate/rental properties operating a timeshare or fractional arm are known as mixed-use developments.

EXECUTIVE SUMMARY

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Hospitality Trends Travel and holidays are an essential for many people across the world – even in times of global and economic uncertainty, travellers are not willing to give up their precious holiday time, which is why the hospitality and leisure industry is renowned for its growth and resilience. The number of people travelling to destinations outside their own country continues to increase, with 2016 predicted to be another record year for inbound arrivals worldwide, after 2015 saw more than 1.2 billion global arrivals.

The European market Europe has always been a ‘must-visit’ destination, not only for European travellers, but also for long-haul visitors, in search of the glorious culture, spectacular scenery and delicious cuisine that the continent has to offer. For a significant number of leisure travellers from the UK, France and Italy, the number one reason for going away is to ‘discover something new’. Europeans are now very much in search of a healthier lifestyle, and holidays continue to be a critical factor in the sought-after work/life balance equation, helping them to spend time with families, friends and partners or to simply enjoy a solo break. One of the biggest trends in Europe is the ‘micro-adventure’. Travellers are embarking on shorter breaks, packed with activities which offer the escape from their hectic working lives, as well as an adrenaline rush through experiencing something new. The rise in adventure travel comes as the consumer shifts away from material possessions towards authentic experiences. Adventures can range from sleep outs under the stars to challenging hikes, swimming or kayaking, and can be a standalone trip or added onto a planned holiday. Supersonic commercial air travel is expected to have an impact on consumer travel in the future, cutting flight times on popular routes and opening new destinations to new source markets, including Australia, the US and Latin America, all of which will become even more accessible from the UK.

Worldwide trends US – Co-living in communities while travelling is becoming popular. A rise in start-ups offering co-living, complete with attractive amenities, are catering to a younger generation lured by affordable rents in desirable locations. Flexible working and the heightened popularity of solo travel play a major part in the global co-living communities, with single parents and Baby Boomers also signing up to the trend.

Mobile and Online Sales Power 2011 - 2020 Other online

Mobile 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

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2011

2012

Leisure Real Estate Trends & Opportunities

2013

2014

2015

2016

2017

2018

2019

2020


Middle East – Historical hiking trails are being developed in line with the trend across the region. Trails which are centuries old are becoming increasingly popular, including the Nativity Path in Palestine, Abraham’s Path from Turkey to Egypt, the Jordan trail and Lebanon’s mountain trail. The hiking trend brings tourism to rural communities and homestays are often the only lodging opportunity for those seeking remote trails. Africa – Wellness travel is on the rise and is being incorporated into traditional safari breaks. The concept of ‘wellness in the wilderness’ is largely popular with relatively older and wealthy holidaymakers. The Global Wellness Summit found that in 2014, travel with a purpose of improving health and well-being was growing at a rate of 74% more than regular global travel. Asia – Theme parks are a major attraction in China and may take on international competitors. China is poised to overtake the US to become the number-one market in theme parks, with 59 parks planned or being built. Dalian Wanda Group has locked horns with Disney and opened two parks in 2016, with a greater Chinese cultural focus and cheaper ticket prices. India – Travellers are favouring authentic local experiences over luxury commercial holidays. According to the Times of India, travellers are seeking to sample real-life, hyper-local experiences, instead of the typical tourist itinerary that includes visits to ‘must-see’ places. Rather than staying in lavish hotels, travellers are opting for homestays and soaking up the indigenous culture, history and culinary traditions.

Key Performance Indicators % Y-O-Y Growth 2011 - 2020 Airlines

GDP

Arrivals

Lodging

Intermediaries

6 5 4 3 2 1 0 -1

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Key global opportunities • Travellers are increasingly more confident with purchasing on their smart phones, and the mobile channel now accounts for 18% of all online sales.

• Short-term rentals are outperforming hotels in all main geographical regions, which comes as hotels are investing in short-term rental players to adapt to changing consumer demands.

• ‘Virtual Reality’ has entered the travel arena, providing an immersive experience for consumers and an effective sales tool for hospitality groups and travel agents.

• The sharing economy and the impact of the Millennial consumer has led to everyday essentials being rented, offering a pay-as-yougo convenience, from luxury clothing to fitness equipment, reducing the need for luggage and increasing opportunity for personalisation.

• Artificial Intelligence (AI) is set to have a major impact on personalised online communication, to improve user experience in the booking and selection process. • Tourism is the latest industry to realise the growing spending power of the Muslim consumer, which comes as Muslim and religious tourism overall is expected to be worth €205 billion by 2020, according to an October 2016 report by Mastercard and CrescentRating.

• Consumers are demanding novel ways of becoming fully immersed in nature, which has led to ‘open air’ concept stays for travellers to sleep under the stars. • The boundaries between the homeware and the hospitality industries are breaking down; luxury home brands are opening boutique hotel rooms and furniture and artwork can now be purchased direct from the hotel.

Source: Euromonitor International; World Travel Market Global Trends Report 2016, in association with Euromonitor International

EXECUTIVE SUMMARY

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Why SharedHoliday Ownership? The rationale for entering shared-holiday ownership depends on the type of business you operate and its precise characteristics, needs and objectives. Both leisure property developers (second home market) and hospitality companies will find shared-holiday ownership models offer significant benefits, including:

Create synergies with other asset classes in mixed-use developments

Most immersive brand experience available to consumers

• High year-round occupancy levels of timeshare developments drive revenues to ancillary businesses

• The residential nature of shared-holiday ownership products offers an incredible platform on which to tell brand stories and to evolve brands over time

• Shared-ownership marketing incentives (i.e. gift certificates) drive incremental business to on-property outlets • Increased occupancy can result from sales preview packages • A portion of the capital costs for developing key amenities can be borne by the sharedownership component

• Purchasers often go on to become tremendous brand ambassadors

Scalable

• Concierge and other service areas that could generate ownership leads can be offset by shared-ownership marketing

• Sales and marketing capability is a vehicle for monetising inventory from multiple phases and projects

Multiple revenue streams

Accelerate capital return

• Profit contribution through initial sales and marketing

Investment diversification

• Recurring management fee revenues provide higher margin with little risk • Lower cost marketing through referral and existing owner programmes

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• The purchase of a branded holiday ownership or private residence club is the ultimate expression of loyalty

Leisure Real Estate Trends & Opportunities


European Market Resilience

S U E M CN I C O L

for ARDA International Foundation.

Source: Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger

RDO, UK Head of Operations

THE EUROPEAN MARKET HAS RECOVERED well from the recession of 2009. RDO's latest Key Performance Indicators (KPIs) reveal a strong performance on the part of RDO resort members, with sales amounting to just under €500 million in 2014. This represents an average revenue return of approximately €2.2 million per resort in 2014, and €32,000 per unit. RDO calculated that sales of €500 million accounts for just 41% of total sales across Europe which, in 2010, achieved sales of approximately €1.2 billion according to a report released by ARDA International Foundation (AIF). Consumers have become reluctant to think long-term commitment, which has given rise to the introduction of short-term ownerships. The industry became creative to safeguard future sales, with a large proportion of the market now selling short-term holiday ownership products of between five and 15 years’ duration. This works well for the current generation of buyers, who often work in a less secure job environment. The European market is the second largest in the world, after North America, with a total of 1,342 resorts, 92,234 accommodation units and approximately 1.6 million timeshare owners. There is a great demand for timeshare, which saw year-round occupancy levels among RDO member resorts increasing by 5% between 2013 and 2014, standing at just over 74%. This is an exceptionally high level compared with other

ABOUT SUE MCNICOL Sue McNicol has more than 20 years of experience in the shared-holiday ownership industry after commencing her career with the Timeshare Council in 1996, which has since become the UK Chapter for the European Trade Body.

accommodation types, such as hotel rooms. AIF estimated that there were nearly 59,000 jobs created by European shared-holiday ownership operations in 2010; 24,000 of these relating to resort operations, and over 16,000 in sales and marketing. RDO KPIs revealed that the average wage per employee at timeshare resorts in 2014 was just over €24,000.

Who are our customers, where do they go? RDO found that 40% of visitors to its European member resorts are British, 14% German, 7% Finnish, 6% Spanish, and the remaining European countries representing under 4% each. Two thirds prefer to holiday at resorts other than their own, with the exception of Spain, where the majority of Spaniards prefer to holiday at home. Spain is in fact the most popular European destination, attracting over half of Europe's timeshare owners. This is followed by the UK, Finland, Germany and Portugal. Maintenance fees at RDO member resorts in 2014 stood at an average of €649 for a twobed unit, €532 for a one-bed unit – the most common unit type, and €383 for a studio. Overall, the figures in Europe are positive, supported by ongoing buoyant sales. In the long term, developers who can rapidly adapt to consumer trends and develop innovative products will thrive. They will succeed in finding buyers in the volumes we saw in the 80s and 90s.

A RESILIENT PRODUCT

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Industry Insight SHARED-HOLIDAY OWNERSHIP WORLDWIDE REPORT*

Europe SALES

(All figures shown in US Dollars and based on research for 2015)

G R OW T H Sales Volume

$2.537m

Rental Volume

$ 3 6 1 , 8 9 4 , 5 4 0 (2,584,961 nights rented at $140 per night)

AV E R AG E S A L E S P R I C E P E R T I M E S H A R E P U R C H A S E Avg. price per interval

$16,765

Avg. price per transaction

$12,401

Intervals sold

151,329

N U M B E R O F T I M E S H A R E T R A N S AC T I O N S I N A Y E A R (2015) Transactions

204,580

NUMBER OF RESORTS IN SALES In sales

83%

Pre-sale

2%

42%

NUMBER OF RESORTS SOLD OUT Sold-out

16%

O F OW N E R S A R E L I K E LY TO P U R C H A S E AG A I N

PROPERTY O U T LO O K Resorts built 2016

3

Resorts built 2017 and beyond

5

Units built 2016

459

Units built 2017 and beyond

785

PERFORMANCE

TYPE OF TIMESHARE PROPERTY

Occupancy

76 %

LEGAL STRUCTURE

Avg. Maintenance Fee

$542

Right-to-Use

56%

Deed

9%

Interest in Trust

16%

TYPE OF CONSTRUCTION S TA N D -A LO N E 35% CONVERSION 47 %

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USAGE

Leisure Real Estate Trends & Opportunities

NUMBER OF RESORTS Number of Resorts

MIXED-USE 65%

NUMBER OF UNITS

P U R P O S E - B U I LT 53%

Units

1,342 REPRESENTING 25% OF RESORTS WO R L DW I D E

92,234 W I T H AVG . R E S O R T SIZE OF 69 UNITS

*Source: Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger for ARDA International Foundation.

N U M B E R O F I N T E R VA L S O R E Q U I VA L E N T S S O L D I N A Y E A R (2015)


Global SHARED-HOLIDAY OWNERSHIP ECONOMIC IMPACTS (Direct, Indirect and Induced)

USD (MILLIONS)

REGION

E M P LOY M E N T ( TOTA L J O B S )

OUTPUT

I N CO M E

TA X E S

ASIA

73,088

$5,260

$1,382

$510

AU S T R A L A S I A

11,175

$963

$423

$125

CARIBBEAN

51,953

$2,457

$1,097

$182

CENTRAL & SOUTH AMERICA

66,398

$3,593

$1,041

$310

EMEA

280,448

$24,504

$8,622

$3,211

NORTH AMERICA

796,081

$109,213

$32,932

$12,582

TOTA L , WO R L D

1,279,143

$145,990

$45,497

$16,920

WORLDWIDE SHAREDHOLIDAY OWNERSHIP UNITS BY REGION, 2015

WORLDWIDE SHAREDHOLIDAY OWNERSHIP SALES $20

37 ,5 92

$15

60,526

293,682

92 ,

23

8

USD BILLIONS

37, 32 0

6,083

$10

KEY NORTH AMERICA

$5

EMEA CENTRAL & SOUTH AMERICA CARIBBEAN ASIA AU S T R A L A S I A

$0

2013

2014

2015

A RESILIENT PRODUCT

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Holiday Ownership MARGIN IMPROVEMENT OVER TIME Holiday ownership margins and overall profitability typically improve over time as developers unlock synergies associated with a growing member/owner base. As the owner base grows, it enables the developer to introduce new, more efficient marketing programmes with higher associated margins. At the same time as the owner base grows, so do attractive downstream revenues.

Forty-two per cent of timeshare owners are likely to purchase holiday ownership again. Many owners, being highly satisfied with their product, will be happy to upgrade their timeshare ownership or buy additional weeks or points.* Higher margin marketing programmes become increasingly attractive as the owner base increases:

Downstream revenue plays an increasingly positive role as owner base grows: •

Management services fees

Referral programmes

Loans portfolio (where applicable)

Existing owner (add-on) programmes

Trial programmes

KEY SUCCESS FACTORS

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H O L I DAY OW N E R S H I P

F R AC T I O N A L / P R C

Strong average daily rates in the surrounding hotel segment most closely aligned with the quality of the holiday ownership product

Resorts with a 24-week high season or longer

Destination with high volume of seasonally consistent tourist visits

Location with high real estate values

Strong leisure-orientated location

The degree to which consumers view the market as a compelling leisure destination

Customer-centric and effective property management company

Fair and equitable use plan enabling purchasers to access high-demand periods

Strong owner satisfaction

Flexible layouts and design

Global exchange affiliation

Global exchange affiliation

Efficient sales and marketing costs

Turnkey services

Compelling sales centres

Quality product

Solution to compete against resales

High service levels yet reasonable maintenance fees

Leisure Real Estate Trends & Opportunities

*Source: Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger for ARDA International Foundation.

Example of potential efficiency lift


Sales & Marketing BY THE NUMBERS PERRY NEWTON MANAGING DIRECTOR, AZURE MALTA RESORT PROPERTY: THE RADISSON BLU RESORT & SPA, MALTA GOLDEN SANDS MEMBERSHIP PRODUCT: AZURE ISLAND RESIDENCE CLUB MALTA; THE HEAVENLY COLLECTION AT GOLDEN SANDS BY AZURE; AZURE ULTRA POWERBOATS & MOTOR YACHTS; AZURE PERFORMANCE SUPER CAR CLUB. UNITS IN PROPERTY: 240 IN TOTAL

I HAVE BEEN MARKETING AND SELLING shared ownerships – timeshare and fractional resort properties – for over 25 years. In that time I have learned a lot about the efficiencies of the marketing and sales operation. Here’s what I know – ACQUISITIONENGAGEMENT-RETENTION: These are the goals! Initially, quite a few years ago, we would take prospective purchasers on sales tours, and would do at least three tours a day. When reviewing the cost of those tours against the percentage closing rate, this was not an efficient process for many reasons. There was a low level of engagement, largely because the sales representatives became tired as the day wore on, while the tours themselves were built around the hard sell and did very little by way of giving potential customers a taste of our brand experience.

Sales formula: efficiency How do you create industry-busting efficiency? We revised our marketing and sales process completely. The changes we made, which have been proven to increase our closing rates, are: • Researching the inbound visitors to our destination and targeting those source markets in our sales operation • Using sales training programmes and matching our sales representatives to specific customer categories – a case of putting the right jockeys on the right horses • Limiting sales tours to one a day – six a week – to focus our representatives’ energies; there is no rush and each session is cherished, and the tour guests’ experience with us is far richer.

In a resort comprising 240 units in total, we employ three sales teams, each staffed by representatives reporting to a team of two managers. In each team, the two managers are dedicated and specialise in either cold line selling – fly-buy promotional tours, for which we fund part of the cost of the resort visits; or existing members where we upsell our wide product range – including penthouse suites, high-performance car and luxury yacht charter clubs. Care is taken to recruit sales staff who demonstrate professionalism and who are very good at what they do. Our cold line and fly-buy sales lines generate an average of 1,500 new members buying into our vacation club every year. These sales lines have a cancellation rate of only 22%. In order to calculate our effectiveness ‘efficiency’, we use:

Efficiency =

Net Volume of Sales Total Number of Clients, Net of Cancellations

Currently our operation sees efficiencies by market source per client of: Off-Premises Canvasser (OPC)

£1,200

Cold Line

£800

Fly-Buys

£1,500

Scandinavian

£3,500

Existing Members

£4,000

A RESILIENT PRODUCT

15


On average, our closing rates are around 25% for new business. We are constantly looking at other ways to enrich our tours. Today, for example, before the resort tour and well before any sales are presented to the guests, we treat them to a boat trip around the island of Malta, giving them an engaging 5-D tour, with guides educating them about the rich history of the island and increasing its value to the potential new member. Visits to attractions, such as The Grand Harbour, have an immeasurable effect, along with quenching the thirst and hunger of our guests with catering laid on to give them a taste of local delicacies and drinks. We capitalise on the value of the location itself as a special stay experience.

The five whys… Our sales and marketing strategy is very much shaped by the Shari Levitin sales training principle of the ‘Five Whys’ when talking with your guests. These are: 1. Why holiday? What is important to your guests about taking holidays? If they don’t have enough emotional reasons to holiday, it’s going to be tough. 2. Why timeshare? If you value and love holidays, what makes holidaying this way far better for you and those you love? What’s going to be your ‘why’ to change? Explain the many benefits of the quality, flexibility and value of timeshare ownership

16

Leisure Real Estate Trends & Opportunities

with an exchange membership. 3. Why Malta? For example, highlight the features of your destination that are attractive and offer value: It’s a UNESCO World Heritage site. There are many iconic attractions nearby. What are your unique features? Share what your guests tell you about why they love the place? TripAdvisor ranking? Flight links and ease of getting there… 4. Why us? Describe what it is that makes you proud of your brand and your company: its strengths; any experiential features of your offering; any spin-off products to be enjoyed as part of your offering. Tell them about your brand partners, such as exchange companies like RCI; the diversity of holiday experience when holidaying with your brand and at your resorts. What makes your company a cut above the rest? Remember, you can always tell the strength of a business by the company it keeps. Buyers like to feel proud of you too, so demonstrate your credibility. 5. Why today? Your call to action – why not today? Why should they sign today? If it’s an offer, then it better be a real one. Today’s buyer is not only tech savvy, but is also sales savvy and won’t fall for ‘this deal is only available today’. You need good solid reasons, or offers, so that your team can gain commitment with something real and of value.


PERRY NEWTON Managing Director, Azure Malta

It’s a simple concept and our sales systems are built around it. At its heart is the business of building customer relationships. Other rules we follow are to resist bolting everything the industry has to offer onto your product – keep it simple, no one wants, or has time, for complicated. Cold line licenses can be costly and without the right team, damaging to reputations. While your fly-buy promotional clients, on the other hand, will often come from your online marketing efforts, and if you have a hotel or resort you have the accommodation and can absorb some, or all of that cost. A hotel is a rich source of leads if you go about it in the right way and can enter into alliances with other hotels. An Internal Personal Contact (IPC) or a desk in a reception area improves efficiency and effectiveness significantly over most cold line operations, as the whole experience is a warmer one. Create your own tourist information centres in your destination, liaising with other tourist information centres to promote your own branded, sexy, island excursions or other smart tours and trips, using local people to give insider tips on getting the best out of your destination. Create a craft market with local traders which can be good for them, your clients, and a great capture point for you. Costs can vary. For example, do you want to provide gifts – high value or less expensive? Will you use an agency or your own staff to

ABOUT PERRY NEWTON Perry Newton has been a soldier, a sales person in most markets, a sales manager, a sales director, a life coach with countless hours of mentoring and training, and has led teams at all levels. He is one of few Levitin-recognised trainers in Europe and is a member of the Institute of Directors. He is a champion of numerous charities, many for the military, such as Help For Heroes and Give Us Time, as well as Cancer Research. In raising funds for charity, Newton has diced with death in events such as the Dakar Motorbike Rally and the Greek Hellas Rally. Being totally committed to providing a work environment where talented individuals have the support, equipment and the autonomy with which to flourish and grow, Newton believes that people are by far the greatest asset of Azure Malta.

operate your cold line sales and fly-buys? Do you have to duplicate the operation set up, having subsections for each different source market and therefore languages, which will add to the cost. We play around the edges of the business to test different strategic approaches and to look for areas of possible growth. We will invest a percentage of our yearly marketing budget in a new test and, if it doesn’t drive ROI or some other benefit to us as an organisation, we will kill it. We do lots of surveys through providers such as SurveyMonkey, to members and non-members, and we get some interesting feedback as to why some people are interested in our offering, and why others are not; what they would like and what not. We find the majority of non-engagers at times do not know, or have forgotten, how to use the product or it’s been a while, and they’ve missed a bit here and there as developments and improvements to the product they bought have passed them by – even with the best product educational methods you may have. It is always worth taking time to revisit your product educational communications on a regular basis. Remember the three pillars of your success strategy should always be, ACQUISITION-ENGAGEMENT-RETENTION. Happy selling!

A RESILIENT PRODUCT

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Case Study: The Canary Islands

HARD ROCK HOTEL, TENERIFE

AS ONE OF THE LEADING MARKETS FOR shared-holiday ownership in Europe, the Canary Islands offer more accommodation of this type than any other Spanish region. In total, 128 out of 302 resorts in Spain are located in the lush landscape of the Canary Islands, providing more than 14,000 units and 59,000 beds for European and global tourists. Each year, the shared-holiday ownership industry alone attracts 1.3 million visitors to the Canaries, with guests staying at a hotel or resort for an average of 11.6 nights. The Canary Islands are, without a doubt, favoured holiday destinations among sun-seeking tourists, which is one of the reasons why residential leisure real estate and shared-holiday ownership has proven to be highly successful in this location. As a result of its strong customer magnetism, it is unsurprising that the travel and tourism industry has identified the infinite potential of shared-holiday ownership. In fact, the hotel business recognises the industry as a key economic driver for its capacity to retain customers and improve the profitability of hotels on a year-round basis. By bridging the profits’ gap between high-and-low seasons, the shared-holiday ownership model brings more stability to the hotel business, as it is less prone to fluctuation during economic downturns. ASHOTEL, the Hotel and Apartment Association of Tenerife, La Palma, La Gomera and El Hierro, has highlighted the strength of the industry and lends further credibility to the benefits of adopting this model. During the past few years, Jorge Marichal, President of

CLUB MELIÁ, TENERIFE

ASHOTEL, has joined forces with RDO Spain to promote the reliability of the industry and pave the way for future collaborations between hoteliers and shared-holiday ownership. Today, shared-holiday ownership is a favoured model among many of the leading hoteliers in the Canary Islands, including Hilton, Marriott, Meliá, Hard Rock Hotel and Diamond Resorts International. One of the main differences between sharedholiday ownership and the hotel business, in the Canary Islands and on a global level, is the experience that the customer receives while on holiday. Shared-holiday ownership offers a more personalised service, as customers are able to build relationships and familiarity with staff, and they are also offered more choice of on-site amenities and services to take advantage of during their stay. Shared-holiday ownership is an extremely successful customer engagement tool, which is reflected in Diamond Resorts and Hotels’ guest satisfaction rate of 90.8%. The average score of timeshare users on a global scale stands at 86.2 points, on a scale of one to 100. The satisfaction rate of those located in the Canary Islands is 4.4 points on a range from one to five on TripAdvisor, and on a range of one to 10 on Booking.com, the satisfaction level is 8.4. Shared-holiday ownership is one of the fastest-growing segments in the travel and tourism industry. In the Canary Islands the industry has generated 10,000 direct jobs and, on a global scale, 500,000 direct jobs have been established throughout the industry.

Sources: RDO Spain Seminar, Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger for ARDA International Foundation.

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Leisure Real Estate Trends & Opportunities


Sales & Training Advice

SHARI LEVITIN

Founder of The Levitin Group

SHARED-VACATION OWNERSHIP IS NOT only a product, it is a lifestyle. We are in the business of transforming the ways our customers go on vacation and, as a people’s product, shared-vacation ownership is best communicated by people. The success of your business is dependent on the members of your team who spend their working days connecting with your customers, therefore it is essential that your team is well-equipped to deliver solutions and effectively market your product. Here are my 12 steps to a successful sales training session and for building a lasting relationship with your customers: 1.

Start on time: Start and finish in a timely manner and your team will reflect this behaviour with your customers.

2. Be prepared: Focus on training or on a motivational subject and prepare for unexpected issues or topics to arise. 3. End on a high note: It is important to inspire your team before they meet their prospects for them to motivate your customers. 4. Praise and compliment in public; constructively criticise in private: Ask your top performers to share their processes to help increase others’ knowledge. 5. Allow participants to perform a task without interruption or feedback: Give your team the freedom to discover and correct their own mistakes.

ABOUT SHARI LEVITIN Shari Levitin has more than 30 years of sales experience and is the Founder of The Levitin Group, which was named as one of Inc Magazine’s ‘Fastest Growing Companies’, and is responsible for over one billion dollars increased profit for companies and salespeople worldwide. In 1992, Shari Levitin became Director of Sales and Marketing for Marriott’s Summit Watch Resort in Park City, and under her leadership the resort was named as the ‘Most Successful Ownership Resort in the World’. Shari Levitin’s book, ‘Heart and Sell’, is available on Amazon. www.sharilevitin.com

6. Keep your objective in mind: Ensure that you have a goal for the meeting so that your team can understand what is expected from them. 7. Hook your sales team with a pre-meeting teaser: Take a creative approach to generate more interest from your team. 8. Use the five senses: Engage by using hand-outs, virtual training programmes, PowerPoint presentations or even change the location to increase involvement. 9. Have someone else lead the meeting: Refresh your meetings with different, well-informed speakers to provide a variety of knowledge. 10. Be consistent: Introduce a timetable for your meetings to create a habit for your team to attend. 11. Make it interactive: Increase engagement through participation and your team is more likely to retain the information and use it in their roles. 12. Post meeting follow-up: Practice, drill and rehearse! Use the mantra of all successful athletes and provide visual reminders, follow up exercises and one-to-one support to build on results. As with any industry, having a sound and structured process in place is the key to consistent, good performance. Through these small but significant changes, you can maintain a strong sales arm to your business.

A RESILIENT PRODUCT

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Shared-Holiday Ownership Spectrum

20

H O L I DAY OW N E R S H I P

F R AC T I O N A L

INTEREST SIZE

1 week per year interest

1/20 to 1/4 of a year interest

Q UA L I TAT I V E DESCRIPTION

Holiday resort

Mid to upscale apartments or villas

CONSUMER BENEFIT

Annual holiday solution enabling consumer to return to home resort or travel worldwide via exchange

Benefits of second home ownership, but at a fraction of the cost and without maintenance responsibilities

OW N E R S H I P STRUCTURE

Deeded, equity based or right-to-use

Deeded, equity based or right-to-use

Q UA L I T Y O F S E R V I C E

Standard resort level service with mid-week clean and à la carte services

Standard and upscale resort level service with mid-week clean and à la carte services

A N N UA L M A I N T E N A N C E * FEES IN EUROS.

€250 – €1,200 /week

1.5% to 2% of purchase price

Leisure Real Estate Trends & Opportunities


P R I VAT E R E S I D E N C E C LU B

D E S T I N AT I O N C LU B

CO N D O H OT E L ( B U Y-TO - U S E A N D L E T )

1/20 interest or greater

10 to 60 days’ usage

Whole ownership

Exclusively upscale luxury apartments or villas

Membership offering global access to a portfolio of luxury residences

Hotel rooms and apartments managed by a hotel operator

Benefits of second home ownership, but at a fraction of the cost and without maintenance responsibilities

The benefits of owning a portfolio of signature homes around the world without the complexity of home ownership

Return on investment through rental plus personal usage and exchange options

Deeded, equity based or right-to-use

Typically right-to-use membership

Deeded or right-to-use

5-star service sometimes complete with dedicated staff. Comprehensive amenities

Ultra-luxury service experience often complete with concierge, butler, personal chef, etc

Varies by property but frequently aparthotel and hotel type of services

€210 – €700 /day

Varies

Varies, usually applies only to the personal usage periods

*Annual fee estimates are approximate, for illustrative purposes only.

A RESILIENT PRODUCT

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MIXED-USE DEVELOPMENT

Opportunities & Benefits More and more hotel brands are joining those already established – Hilton Grand Vacations, Club Meliá, The Cela Group, SkiStar, Disney Holiday Club, Wyndham Vacation Ownership, MacDonald Hotels and Resorts and Pestana Vacation Club – in the timeshare industry. The mixed-use development market is rapidly expanding, as is the demand for a linked shared-ownership component. It is no longer enough for hotels to have a great location and smart rooms; today’s guest is looking for lifestyle options, flexibility, choice and more facilities than ever before. The hotel/timeshare model mix has become one of the new norms in hotel developments. Coming into the mix are residential leisure real estate developments, with second homes being sold with holiday exchange options. The relationship and synergies between these different business models can create significant economic benefits, such as: • Reduced marketing, operational and development costs • Higher occupancy levels driving increased retail revenues • Building a brand community and growing brand loyalty • Resistance to standard seasonal lodging cycles, levelling out peaks and troughs, bringing more certainty to staff planning and operational management • Shared marketing, sales and PR costs across product lines

• Warm sales leads and no-cost marketing opportunities for timeshare using hotel customer database and promotional channels ie: Reception/in-house TV • Higher revenues from maintenance fees and sales used to provide multi-dimensional on-site guest amenities and lifestyle offerings.

NORMAL O P E R AT I O N S

P E R I O D O F S A L E S W I T H S H A R E D - H O L I DAY OW N E R S H I P CO M P O N E N T

Rooms, Hotel Occupancy & Revenue

Normal occupancy

Increased occupancy from sales preview packages. Varying from hotel size and sales velocity, hotel occupancy could increase after any displacement.

Retail Outlets – F&B, Spa, etc.

Usual F&B from operations

Marketing incentives (ie: gift certificates from tours) can drive incremental business to on-property outlets. Post sell-out, outlets may achieve additional revenue from captive ownership and increased year-round occupancy levels.

Amenities

Normal sales from operations

A portion of the capital costs for developing key amenities can be borne by the shared-ownership component. Post sell-out, a portion of maintenance/operation costs can be set against ownership revenues and annual maintenance fees.

Fully paid by resort operations

Concierge and other service areas that can generate ownership leads can be offset by sales and marketing. Additionally, a portion of overhead costs – such as general manager, property engineer, security, etc. – can be allocated to the timeshare owners to further offset hotel operational costs.

CATEGORY

Overhead Operational Support Areas

22

• Financial stability delivered by timeshare owners’ annual maintenance fee payments, providing a dependable and steady flow of management revenue

Leisure Real Estate Trends & Opportunities


Preferred Marketing Approaches The scale and location of an existing hotel or resort can have an impact on which marketing techniques are most successful in promoting a shared-holiday ownership product at the property. However, it is possible to explore different marketing approaches while still bringing footfall through the door. Some of the industry’s tried and tested approaches are still viable today, as customer experience of your brand offering has proven to be the most successful method of showcasing the benefits of shared-holiday ownership at a hotel or resort. Here are some of the most frequently used marketing approaches:

IN-HOUSE GUEST PROGRAMMES

A great strategy to use in mixed-use developments with hotel components. Hotel guests are invited to shared-ownership sales presentations. History shows that guests who have chosen to stay at a hotel with a shared-holiday ownership product are strong candidates to purchase.

DIRECT MARKETING AND OUTBOUND CALLING

Prospects are selected through purchased, partnered or existing databases and contacted either by direct marketing (electronic direct mail, online or social media) or telemarketing. Prospects are typically offered a resort stay at a significantly discounted rate, in exchange for attending a sales presentation, i.e. Fly Buys.

OW N E R R E F E R R A L PROGRAMMES

Owners/members of shared-holiday ownership schemes are incentivised to refer friends and family. Referrals are then invited to a sales presentation. Referrals of an existing sharedholiday ownership purchaser have a higher probability of purchasing themselves.

TRIAL PROGRAMMES FOR NONPURCHASERS

When a sales presentation will not result in an immediate purchase, a trial period of membership/ownership is sometimes offered. Trial programmes are typically one year memberships that include a week of holiday. Efforts to upgrade trial members/owners to full membership within that year are often very successful.

ADD-ON OFFERS FOR EXISTING OW N E R S

Soliciting existing owners to upgrade their existing timeshare product.

R E N TA L S

Require minimum financial expense and commitment for potential purchasers to sample your resort experience. Used as a soft-sell exponential introduction, rentals can build customer loyalty while covering lower occupancy periods and bring footfall through the door.

LEISURE REAL ESTATE - THE OPPORTUNITIES

23


Shared-Holiday Ownership VERSUS

Residential Product Cycle Synergies and new requirements for developers and hospitality companies considering shared-holiday ownership

STA GE FEA 1: SIB ILIT

Rental and Exchan ge Off er

Whole-Ownership Residential Development Cycle

Y

Design Develo pment

Feature

s and S

Sales R etentio n and Toppin g Out

Events and Marketing Programmes

Pre-Sales Planning and Marketing

Budgets and Approvals

Preliminary Business Planning

pecs

Move-In

Repairs and Maintenance

In ove-

M Post

Land

ew Revi

c mati Sche plan r e t Mas

ion n truct Cons inalisatio F t c a r Cont

ion truct Cons ments Docu

nd

a ch un a L ng ti les -Sa arke e r M P ng

eri

d Ten

ing nn Pla rch o ari esea en Sc nd R a

24

Leisure Real Estate Trends & Opportunities

a rm Fo ls o r P va ls, ppro ga Le nd A a

2: E N G A IG T S S E D

er

m sto Cu

3: N O E G TI A A ST LIS A RE


6

P ST T IM AG IS E A 4: T IO N O

Shared-Holiday Ownership Development Cycle

ce t du en ro em s t In ag ce n vi Ma Ser ew r e N mbe om e elc /M W ner Ow

5 ing

ic

3

Pr

S

E

A

S

T

A G IB E IL 1: IT Y

: ct du s o r n l P tio s ica ifica nitie s y c e Ph pe Am S d an

F

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n ha

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a nt Re

er Off

Use

c Ex

u ry B

1 y

d ity Stu

il Feasib

se/ Best U

Lega ls

, Pro F Appr orma and ovals

keting h Mar Launc ammes Progr

n ructio Const ts n e m Docu

ts and Benefi es g Privile

Define Legal Structure

Consumer Research

4

n

ng

ina

s ale st S on Ho ntati se Pre

Pla

nni

la sP nes

si

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g nin lan g P les ketin r -Sa Pre d Ma an

g stin Exi o t ers es Sal Own

Create Sales and Marketing Team

Tendering

al Referr es m m a r g o Pr

Management Service Fees

2 STAG E 2: DESI GN

STAG E 3: REAL ISAT ION Custo m

er

1 Expanded to include holiday-ownership, fractional and private residence club options

2 Incorporate shared-ownership business model assumptions 3 See page 38

4 Particularly in the case of holiday ownership where strategies differ significantly from residential. See page 15

5 Holiday ownership, in particular, utilises a unique sales process,

but like residential ownership it benefits significantly from branded, experiential sales centres

6 While very similar to those of a hotel, shared-ownership servicing has some unique dimensions. See page 39

LEISURE REAL ESTATE - THE OPPORTUNITIES

25


State of the Nation EUROPE

WHEREVER YOU ARE LOOKING TO DEVELOP and operate a resort, you should start with the most important question, which is: What constitutes a good location? Many European destinations tick all the right boxes, and here’s why.

Ease of access You must consider access. The sharedownership business relies upon making it easy for guests to use the product. If good air routes or other forms of transport don’t exist or are too expensive, this will be a limiting factor on the attractiveness of your product.

Experience, experience, experience Proximity to demand generators is vital too. Europe is rich in iconic tourist attractions, which makes it a popular holiday destination with tourists worldwide. It is rare that the accommodation is the only attraction to convince a customer to make a long-term commitment to shared-holiday ownership. Demand generators in the form of tourist attractions and activities can be internal as well.

26

Leisure Real Estate Trends & Opportunities

You can add value to your resort by adding things like a golf course, a spa or an equestrian centre. Make sure that you fully understand how they will add value to your business and who is going to pay for them, either directly or indirectly through premium pricing, as they require significant investment. If you are relying on external demand generators, make sure that they are not too far away and also consider whether you can achieve some sort of privileged access to them for your customers.

Seasonality Most places have a clear seasonality and a clear market to go with it. To bring yearround attractions to your development will require significant investment in promotion and communication costs, so be committed to creating real demand for your project, as well as having the cooperation of local/regional tourism authorities.

Opportunities in Europe today: The Adriatic coast of the Balkans – Generally hailed as being ‘the Mediterranean as it used to be’. The Black Sea coast of Bulgaria and Russia – Accessible by a huge ‘drive-to’ population. The south-east coast of Italy – Developing rapidly as a new focus for tourism.


PHILIP BACON FCA MRICS Director - Planning & Development/Valuation, Horwath HTL, Global Leader in Hospitality Consulting

Sicily – One of the greatest tourism assets in the Med. Cyprus – Appealing to new, growing outbound markets, as well as having a strong pull for the UK. The UK – The ‘staycation’ is probably not a passing fad. The Atlantic coast of Portugal – A real competitor for the Algarve. South-west France – Relatively undiscovered but with easy access and a long tourism tradition. Many of these locations appeal to some of the newer members of the EU, as well as Russia. However, remember that undiscovered and undeveloped locations will always attract the pioneers of tourism, but shared-holiday ownership is typically about repeat visitation to places where people like to have something more permanent than a rental opportunity. It is also about ease of access and long-term service delivery, and these things are more challenging in undiscovered parts of the world. The week-based timeshare or holidayownership business, arguably the oldest of the shared-ownership models, is still relatively new, despite being nearly five decades old. This is nothing compared to destinations like Las Vegas, Miami Beach and the French Riviera; and let’s not forget that the first Thomas Cookorganised tour was in 1841. The places in Europe where shared-holiday ownership has flourished have been where people already enjoy going on holiday, such as the Canary Islands, the

ABOUT PHILIP BACON Philip Bacon is a chartered accountant and member of the Royal Institution of Chartered Surveyors with over 30 years’ experience in professional business advisory services and general management. He has been a consultant to the hotel and mixeduse sectors of the hospitality industry for over 15 years. Philip has been involved in the development of branded residences and other leisure real estate concepts working with brands such as Mandarin Oriental, Four Seasons, Fairmont, Jumeirah and Armani. Horwath HTL is a global leader in hotel advisory services and is uniquely positioned to provide the depth and breadth of advice required by leading hotel owners, investors, financiers, and operators.

Costa del Sol and the Alps. The objective in today’s market is to carefully match your product with your chosen target market. Do not compromise, there is too much choice out there and your customer is better informed than you think. Seek out sources of customers who meet your profile – remember it is no coincidence that some of the world’s shared-holiday ownership leaders are hospitality-driven organisations with access to large numbers of loyal customers. What is needed is a well-planned approach to the established model and in Europe, the quality bar is high. The ‘must have’ components are: • Excellent standards of accommodation, designed with families in mind, which is something traditional hotels often get wrong • High service levels and on-resort activities designed to meet your customers’ needs • Added value using external and internal holiday exchange, as well as tailor-made and concierge-style services • Greater flexibility using points-based systems – but these may not be the answer for everyone • Shorter term ownerships and memberships. All of these benefits can add up to a compelling shared-ownership product. Know why people are attracted to your location, understand what your customer is looking for on holiday, and design your holiday product around those needs.

LEISURE REAL ESTATE - THE OPPORTUNITIES

27


State of the Nation INDIA

THE SHARED-HOLIDAY OWNERSHIP industry in India is a business of significant scale and its potential is great. There are approximately 80 holiday ownership companies throughout India today, and the total number of resorts in the country is around 180. Taken as a cumulative number, the shared-holiday ownership industry, including units in hotel and mixed-use resorts, represents an overall capacity of around 9,000 units.

Product preference Indian consumers are demonstrating a preference for weeks, points and short-term membership products. Most companies in India today offer a contemporary product modelled on the international points system. There is little demand for the older fixed-weeks system. The current product offers great use flexibility across the different seasons and apartment types, as well as access to fully-serviced resorts. Short-term memberships haven’t really been launched in a big way in India as yet, however we are likely to see some action in that space going forward.

The opportunities There are many opportunities for a resort developer coming into the market in India today. We need to look to the younger buyer, so there is a real need to orientate your

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Leisure Real Estate Trends & Opportunities

product towards the younger consumer. The younger or Millennial buyer is looking for value in their purchase – whether that is value for money or value in the experience and the choice your product delivers. Any sharedholiday ownership products going to market today should offer flexibility of use. Being aligned to a holiday exchange services provider is of great value, as this brings operational benefits, such as floating weeks and being able to offer a choice of check-in times so that guests can take advantage of the differing flight times the low-cost airlines make available. There is also a need to simplify the product and buying process. The industry should move to the online platform for both its purchasing and reservations processes to increase efficiencies for both the customer and the resort. As many as 60% of our buyers today are under 40 years of age. This is a significant demographic shift, and has a huge impact on our product offerings and the way we market them. Online presence and social media are important influencers and most Indian players are focusing on increasing their share of voice in the online space, driving customer engagement, both online and offline – and on a regular basis to build loyalty. For the Millennial audience, drive-to destinations are important. The strategy would


ABOUT RAMESH RAMANATHAN Ramesh has over 38 years’ experience over a range of industries, approximately 22 spent in the timeshare and hospitality sectors. Ramesh is a pioneer in the Indian industry, working with Sterling Holiday Resorts in the early 1990s before helping to set up Mahindra Holidays and Resorts in 1996. After being credited with establishing the shared-holiday ownership concept with the ‘Club Mahindra’ brand, making Mahindra Holidays and Resorts one of the largest holiday ownership companies in the world, Ramesh rejoined Sterling Holidays in 2011 and succeeded in establishing it as a leading player.

RAMESH RAMANATHAN Managing Director, Sterling Holidays, India Executive Committee Member AIRDA (All India Resort Development Association)

be to expand in this direction, as with multiple resorts across the country this is a strong marketing message for India’s Millennials. India is a country of fabulous diversity in its holiday destinations, from the famed beaches of Goa to the hillside havens of Coorg and the cultural riches of Puducherry. There is every type of holiday experience within the country to satisfy today’s experience-hungry holidaymaker. And it’s not just the domestic traveller. TripAdvisor’s Adventure Travel Survey revealed Goa, Rishikesh, Himachal Pradesh, Andaman and Nicobar Islands, as well as Leh and Ladakh, have become popular destinations. Within the resorts themselves, it is important to offer guests varied and unique holiday experiences as they seek to distinguish their holidays as an experience that is different from the usual. From a service perspective, there is intense competition that can make our ‘wow’ factors seem like the norm today. There is a need to constantly evolve your product and service standards to introduce new offerings to surprise and delight your customer. You must never stand still. Right now, the industry revolves around accommodation and services enjoyed while on holiday. AIRDA recognises that today’s traveller seeks a complete ecosystem for all their travel

needs. Any resort – whether shared-holiday ownership or not – needs to travel with its customers, from holiday research and planning, through to booking, travelling and while on holiday. We can do this using digital and online channels, social media and apps; and we all need to evolve in that direction.

Travelling India India is a rich source market. With a rapidly growing affluent middle class, forecast by Deloitte to exceed 600 million people in 2016. The outbound travel sector is also growing. According to the TripBarometer study by TripAdvisor, 82% of Indian travellers planned to try something new in 2016. Tourism demonstrates consistent growth in India. A number of recent studies set the expectation that tourism’s contribution to the country’s GDP will grow at an annual rate of 7.8% up to 2023, while domestic tourism is expected to grow by up to 8% each year. The average Indian family will spend between €700 and €2,800 on a holiday. According to the new 2016 World Wealth Report, India is ranked 7th in the world, in front of Australia and Canada, with a reported wealth of $5,600 billion – referring to the net assets of the nation’s individuals. With the right product, an investment in India will definitely pay dividends.

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State of the Nation USA

THE US TIMESHARE INDUSTRY HAS experienced steady growth for the past six years, including a 9% increase in sales volume in 2015 to a value of $8.6 billion. Our industry and its product offerings have evolved, along with the changing demands of its owner base, since vacation products were first introduced in the 1960s. In fact, long before the sharing economy phrase became trendy, the timeshare industry players were the original and hip innovators of the sharing concept. However, one of the main differences between today’s sharing economy and our industry is that we have ensured that customer service and safety standards are consistently present across all of our products and services.

Essential infrastructure Since the early 1980s, we have established legislation and regulatory procedures to protect consumers which has created a consumer-centric market. Our foundation of industry regulations and standards has provided consumers with the assurance that their purchase is secure and that their ownership will remain protected. This consumer-led approach has built a loyal fan base of more than nine million timeshare owners in the US. These rules and regulations established a foundation for others to follow, as the

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Leisure Real Estate Trends & Opportunities

big brands and publicly traded companies capitalised on the opportunity to join a wellstructured industry. And today the timeshare industry is led by some of the strongest brands in the hospitality sector that deliver on high-quality amenities and services, provide access to affiliate resorts around the globe, and innovate with flexible products through points-based programmes.


ABOUT HOWARD C NUSBAUM Howard has served as CEO and President of the American Resort Development Association (ARDA) since 2000. He currently serves as President of the ARDA Board of Directors, The ARDA International Foundation (AIF) Board of Directors, and the ARDA-ROC Executive Committee. Beyond ARDA, he serves on the Board of Directors of the US Travel Association, as well as being a renowned public speaker.

HOWARD C NUSBAUM President & CEO of the American Resort Development Association (ARDA)

Numbers may not add up due to rounding up or down.

U S K E Y I N D U S T RY M E T R I C S U S I N D U S T RY S I Z E

SALES 2015 Average sales price

$22,240

Resorts

2,482

Number of intervals or equivalents sold

644,402

Units

293,682

Average resort size

118 UNITS

Intervals owned

13.5m

2014

2015

CHANGE

S A L E S VO L U M E

$7.9

$8.6

9%

R E N TA L R E V E N U E

$1.9

$1.8

-5%

O C C U PA N C Y

78.3%

79.9%

2%

MAINTENANCE F E E S (AVERAGE)

$880

$920

5%

G R OW T H

PERFORMANCE

Success looks like One of the most exciting contributions our industry provides to our owners is a vehicle that gives families the chance to experience a different culture, learn more about the world, and return home refreshed and enriched from their vacation experience. The greatest part about using timeshare for these experiences is that our products offer enough space for everyone in the family to comfortably enjoy the trip, as well as a world of destination travel options and the value of knowing that

E CO N O M I C I M PAC T

2015

JOBS

227,500

ECONOMIC OUTPUT

$79.5bn

CO N S U M E R S P E N D I N G TA X E S (F EDERA L , STAT E & LOCA L)

$10bn $10.2bn

you have a pre-paid vacation every year. The golden days of timeshare are ahead of us, and it’s because of our past foundations that we can look forward to future growth. The latest results from the ARDA International Foundation (AIF) State of the Vacation Timeshare Industry 2016 Study and the Economic Impact of the Timeshare Industry on the US Economy 2016 Study, demonstrate the enduring strength of the US timeshare industry and how this industry is set-up for future gains.

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State of the Nation SOUTH AFRICA

ALMOST

400k SHAREDVACATION OWNERS

AS ONE OF THE WORLD’S KEY MARKETS in the shared-vacation ownership industry, South Africa reflects the sustained success of the international timeshare industry, and offers much opportunity for new developers. Since its inception in the 1970s, when the rise in inflation pushed the annual hotel vacation out of reach for many families, shared-vacation ownership has provided an alternative vacation plan and redefined leisure travel for consumers in South Africa. Today, it has a significant footprint in the tourism and hospitality sectors. According to recent research by the Vacation Ownership Association of Southern Africa (VOASA), the industry boasts a mature 3.5 billion South African Rand-per-annum in revenues, and totals more than 190 resorts, and almost 400,000 shared-vacation owners. Established in 1990, VOASA is a trade association that represents the interests of developers and consumers in the industry. Its core objective is to raise the awareness of the power of the industry by developing an environment where the long-term viability and growth of vacation ownership can be optimally ensured. Having the right mix of products to meet individual lifestyles, coupled with a premium portfolio of resorts in the country’s most sought after locations, has laid a solid foundation for our industry in South Africa. Another key driving factor in the success of the market is product innovation, developed in response to consumer vacation preferences. In the past, as more and more customers opted for points-based products, it led to a much higher propensity for developers and resorts to offer a points-ownership product instead of a weeks-ownership product. The industry also responded to the need for flexibility by introducing a more user-friendly format that has progressed to the popular vacation club product.

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Leisure Real Estate Trends & Opportunities

77%

RESORT OCCUPANCY

The industry today There are now more than 8,000 units in more than 190 resorts and an estimated 476,653 weeks (or points equivalents) in use across all resorts. Holiday periods, notably December, remain the most popular periods in which to own shared-vacation ownership products in South Africa. Today, the industry in the region comprises of 17 clubs/timeshare companies, eight marketers, 14 developers, 15 managing agents and four exchange organisations. A steady growth in resort occupancy, to


ABOUT TONY RIDL In 1981 Tony Ridl became one of the pioneers of the vacation-ownership industry in South Africa. Since then, he has continued to be an innovator for the industry and also developed Cape Town’s Bantry Bay International Vacation Resort, one of the most successful vacation ownership resorts in the world. In 1994, together with Stuart Lamont, Tony Ridl formed Club Leisure Group, one of the world’s largest vacation clubs which services over 200,000 member families.

TONY RIDL Chairman of the Vacation Ownership Association of Southern Africa (VOASA)

77%, demonstrates that shared-ownership continues to be a popular vacation choice for many consumers, and the upward trend of club-timeshare company memberships is also forecast to continue, growing by approximately 17% over the next two years. Customers also benefit from a great deal of flexibility from their ownership products today as, on average, the percentage of resorts affiliated to one or more vacation exchange providers has increased from 94% to 99% from 2010/11 to 2015. The knock-on effect of its success has also made a hugely positive impact on the country’s economy, contributing an estimated 44.4 billion South African Rand to the Gross Domestic Product (GDP). Furthermore, the industry provides employment for approximately 94,374 people, ranging from highly skilled to informal positions within the hospitality and construction sectors.

An area of opportunity The vast and intriguing landscape of South Africa, with its eclectic resort towns, powdery beaches, and tantalising African culture, makes it a holiday destination popular with global visitors and South Africans alike. In particular, the emerging South African middle-class provides a significant opportunity for the shared-vacation ownership market.

Now is an excellent time for the industry to revitalise market demand and boost further awareness of the benefits of purchasing a shared-vacation ownership product. Approximately 16 resorts have been completed over the past five years, comprising mostly of studios and two-bedroom units, providing more choice of accommodation, amenities and prices for the consumer. Looking ahead, resort development will continue to play a key role in shaping the future of sharedvacation ownership in South Africa. There is still vast untapped potential for new developments, which is predominantly in the preferred coastal and bush destinations. The areas earmarked for future development are the KwaZulu-Natal north coast, the Western Cape and the inland surrounding regions of Gauteng. The KwaZulu-Natal south coast has also been identified as an area with prospective opportunities for the conversions of properties to resorts offering sharedvacation ownership products. With a notable property upgrade of more than 500 million South African Rand over the past five years; 60% of resorts under refurbishment and two-thirds of developers planning to develop new resorts in the next five years, with 450 new units in the pipeline, the future for the shared-vacation ownership industry in South Africa is very promising.

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State of the Nation ASIA & PACIFIC

THE LEISURE REAL ESTATE AND SHAREDvacation ownership industry in Asia Pacific has seen a considerable growth in the last five years. To date, RCI is the vacation exchange company for more than 222 resorts across Asia, demonstrating the strength of the industry in this region. The number of resorts is expected to grow exponentially in the next five to 10 years, as developers now see a great opportunity with shared-vacation ownerships to drive occupancy levels, especially as the hotel business has been affected by falling occupancy levels across the board. Asia is one of the regions which offers the most opportunity for developers, as the real estate/shared-ownerships industry in Asia represents only about 10% of the sharedvacation ownership industry across the world.

Purchasing trends Historically, the majority of shared-vacation ownerships in the Asia Pacific region were weeks and ownership products but, more recently, we have seen an increased interest in the points product, with vacationers seeking the flexibility of a nightly stay, as opposed to a weekly stay.

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ABOUT DANIEL TAN Daniel has extensive experience in the tourism and hospitality industry in Asia, specifically in OTAs, B2C, B2B and travel agency divisions. Prior to joining RCI Asia Pacific as Director, Business Development, Daniel worked as Regional Director, International Business at Qunar, China’s leading travel search engine, and was responsible for strategising and executing the expansion of Qunar across the Asia Pacific region (excluding China).

DANIEL TAN Director, Business Development, South-East Asia at RCI Asia Pacific

In the last few years we have also seen the emergence of the ‘condotel’ model, where owners who purchase a condo unit are given two weeks right-of-use, and the rest of the time is leased back to the hotel for operations. This new model benefits both the consumer and the hotel, and as a result, it is proving to be extremely popular in emerging markets such as Vietnam.

Challenges and opportunities The shared-vacation ownership industry is not without its challenges, given the legacies surrounding timeshare and common misconceptions. The industry responds to these challenges by continuously reinventing itself and developing innovative products which are relevant to today’s consumer, and packaging them in a way which will attract new consumers. In years to come, the traditional weeks programme with a right-of-use of 25 years and above may not be as relevant to the consumer, particularly with the emergence of Online Travel Agencies (OTAs) and Airbnb portals offering real time accommodation. Shorter term ownerships will help drive the industry and enable it to remain competitive, and it is essential that the industry is proactive in developing new products. One innovative way I believe the industry could challenge its competitors, is to have a product in market which enables hotels to sell points as a form of loyalty programme, while utilising RCI as an exchange provider when their loyalty

members wish to stay in timeshare resorts. Having such a product in place will enable developers outside their own group to position themselves as selling loyalty points instead of a traditional timeshare product.

Selling to the Millennial consumer Millennials today are driven by new experiences and adventures. Traditional and mainstream methods of selling timeshare or shared-vacation ownership products to them will not work. One-to-one hard sell, sales decks should not be used when trying to pitch this product to the Millennial consumer and instead, social media channels and casual functions, such as a cocktail party, will be successful tools and situations to leverage. In essence, Millennials are driven to purchase when you sell them experiences.

The fundamentals of shared-vacation ownership in the region In order to streamline and create greater checks and balances in the industry, it is essential that regional and independent trade bodies exist, such as the Malaysian Holiday Timeshare Developers’ Federation (MHTDF) and the Thai Vacation Ownership Association (TVOA). These timeshare bodies and associations develop a Code of Conduct for new or existing shared-vacation ownership players in the market, and can also align or lobby against legislation that can have a positive or negative impact on the industry.

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State of the Nation LATIN AMERICA

WITHOUT A DOUBT, THE VACATIONownership industry in Mexico and Latin America is an important sector of the tourism market for the region, making a contribution of more than 370,000 intervals, or week-stay periods, sold in 2015. The industry in this region has seen a compound annual growth of 12% for the last five years. Mexico ranks at the top of the market, with a 56% share of the total regional sales, having the advantage of a variety of high-quality products located in stunning beach destinations that offer amenities and services for the most discerning of travellers. In the LATAM* region, as many as 1,520 resorts are affiliated to a vacation exchange company. Mexico leads the way, having 46% (549 resorts) in three top destinations: Cancun/Riviera Maya, Puerto Vallarta/Riviera Nayarit and Los Cabos. Brazil is the second largest country in terms of resorts benefiting from affiliation to a vacation exchange services provider with 193 affiliated, and enjoying a compound annual growth of 8% in the last five years.

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Leisure Real Estate Trends & Opportunities

370,000+ INTERVALS SOLD IN 2015


JUAN IGNACIO RODRIGUEZ Senior Vice President, RCI Mexico Committee Member, AMDETUR (Asociación Mexicana de Desarrolladores Turisticos)

In terms of intervals or weeks sold by product type during 2015, in LATAM, 45% were points based, followed by a floating unit/week at 43% of sales, and travel clubs with 12%. However each country has its own particularities and we find a predominance of points products in Chile, Bolivia, Peru, Colombia, Ecuador, and Venezuela; and a preference for floating week products in Argentina. Moreover, Brazil shows a 40/60 mix between floating and points products, whereas Mexico presents a balanced distribution of 34/37/30 between floating, points and travel clubs. A preference for flexible products with short-term memberships is currently trending in the region. Trends also highlight the need for a variety of destination offers and a combination of experiences based around locations, such as beach, mountain, cities, and vineyards, among others. Consumer preferences are always evolving; new generations with different behaviours and characteristics want different experiences. That’s why it’s important to invest in product innovation and development opportunities, introducing new offers in terms of destinations, flexibility, pricing and ease of use at regular intervals.

ABOUT JUAN IGNACIO RODRIGUEZ Juan Ignacio Rodriguez has more than 25 years of experience in executive operations, sales and marketing positions. He joined RCI in 2000 and, during this time, has led the redesign and re-engineering of RCI’s member services across the business, as well as holding key positions in RCI Mexico, Latin America and Europe. Under his leadership, several new products and services have been designed, developed and launched in tourist destinations.

Developers in this region are starting to implement social media and digital strategies, and this is necessary to reach new markets. The introduction of new technologies, such as the Internet of Things and big data, will be the next step to enable an interaction with the younger consumer generation. Intelligence harvested from such communications will be applied to enhancing the guest experience to generate more sales in a Millennial market. Millennials are a huge consumer sector that cannot be ignored. They think differently, and the way they live and interact with one another is different to previous generations. Tourism bodies in this region are changing the way they speak to this generation. The use of virtual and digital marketing, the importance of digital storytelling, the strategic use of real-time data, interactive apps, and beacon promotions, among others, are now all going to be steps in a colloquial and marketing interaction with this important audience in the future.

*LATAM region includes Mexico, Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Ecuador, Peru, Bolivia, Brazil, Chile, Argentina, Paraguay and Uruguay.

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37


PHYSICAL AND NON-PHYSICAL

Product Dimensions

Shared-ownership design includes many of the same physical product considerations as residential development. New entrants will find, however, that there are a number of additional non-physical product dimensions to consider in the shared-ownership model.

Physical Considerations

Non-Physical Considerations

• • • • • •

• • • • • • •

Master Plan Architecture Interior Design Floor Plans Amenities Facilities

Resort Networking Exchange Solution Deed vs. Right-to-Use Legal Structure Service Levels Management Solution Owner Benefits Programme

• Use Plan: i. ii. iii. iv. v.

Fixed Week (holiday ownership) Floating Week (holiday ownership) Points (holiday ownership) Annual Selection (fractional/private residence club) Fixed Rotation (fractional/private residence club)

DESIGN OF PHYSICAL PRODUCT: HOLIDAY OWNERSHIP VS. RESIDENTIAL The design principles associated with holiday ownership differ in some important aspects from traditional residential developments.

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H O L I DAY OW N E R S H I P

RESIDENTIAL

D E V E LO P M E N T L AYO U T

Designed around the needs of transient holidaymakers, assumes high level of use. Layout may consciously factor accommodating sales tour flow and transient operational considerations.

Designed around the needs of a single residential owner.

OUTDOOR S PAC E

Large outdoor living space with amenities such as barbecue grills, dining area, etc.

Not often pre-designated. End user responsible for design if desired.

COMMON AMENITIES

Comprehensive resort style amenities, expansive pools or alternative leisure amenities.

Resort style amenities limited to very high-end products.

K I TC H E N S

Partial or fully equipped. Functionality not typically as comprehensive as residential product.

Full kitchen design to accommodate all major appliances.

Leisure Real Estate Trends & Opportunities


MANAGEMENT SERVICE CONSIDERATIONS While there are many synergies with hotel operations, shared-holiday ownership servicing has some unique dimensions. The following areas may need to be addressed once your project is operational:

Owner Services

Property & Facilities Management • Resort Maintenance and Repairs • Housekeeping • Front of House • Capital Improvement and Replacement Reserves

• Check-In • Reservations, Owner Inquiry, Product Information • Owner Communications/ Annual Maintenance Fee Statements • Home Owner Association/ Board Management

Rental Management (if applicable) • Central Reservation System • Inventory Management • Marketing

Financial Management • Operating Budget • Owner Dues, Assessment Fees, User Fees • Accounts Payable.

Considerations when determining if management services should be outsourced or managed in-house include: Fee Structure: Either a flat fee model (with margin built in) or a ‘cost plus service charge’ (service charge typically built as a percentage of cost). Either fee structure can be very attractive as scale builds. Core Competency: Does your organisation’s unique strengths include management services and an understanding of timeshare owner association issues? Sales and Service Integration: Synergies can be found between sales and servicing, especially related to add-on sales and referral programmes.

UNIT SIZE ALLOCATION There are approximately 92,000 shared-holiday ownership units in EMEA. Below is the breakdown of units by type and size: NUMBER OF UNITS

% O F TOTA L UNITS

AV E R AG E U N I T S I Z E (FEET 2 )

11,801

13%

330

1 Bedroom units

35,450

38%

552

2 Bedroom units

29,176

32%

1,197

3+ Bedroom units

4,947

5%

1,726

Hotel room units

10,864

12%

298

DESCRIPTION Studio units

*Source: Shared-Vacation Ownership Worldwide Report: 2016 Edition prepared by Oxford Economics and Leger for ARDA International Foundation.

KEY SUCCESS FACTORS

39


Strategic Considerations

Once you have decided that shared-holiday ownership is the appropriate component for your business development strategy, there are still several important decisions to be made.

Vision

Management services

Is your business strategy based around a single project and single site, or are you creating a shared-holiday ownership business which will transcend individual developments? Will you operate across multiple jurisdictions? If so, will you create new products and brands in each market you enter or aim for a product that is flexible enough to meet the needs of customers across the region and potentially around the globe?

There is no question that owner satisfaction is linked to future success. The right service strategy will yield results for years to come.

Marketing approaches

Holiday exchange is a solution which enables your customer to leverage their shared-holiday ownership interest as a key that opens the door to holidays around the world. Multiple platforms exist: weeks, points and luxury segment solutions. The right platform for you will depend on your product, target market and business strategy.

How should your product be marketed, what is the appropriate design for your sales centre(s), and where should they be located? Should you build your own sales and marketing capability or outsource to a capable partner? All of these are important questions, and answers will be based around the individual needs of your business.

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Legal structure Ownership rights are a defining feature of shared-holiday ownership products. Deeded, right-to-use, trusts and club structures are all options to consider.

Exchange: A key to success


Human Resource Requirements PROPOSED ORGANISATION CHART FOR HOLIDAY-OWNERSHIP OPERATION OF A MODERATE SCALE*

M D H O L I DAY C LU B

D I R E C TO R O F S A L E S

D I R E C TO R O F M A R K E T I N G

SALES M A N AG E R

SALES M A N AG E R

SALES M A N AG E R

MARKETING M A N AG E R

MARKETING M A N AG E R

SALES REPS (8)

SALES REPS (8)

SALES REPS (8)

MARKETING REPS (8)

MARKETING REPS (8)

Fractional resorts and private residential clubs featuring smaller interest sizes (e.g. 1/20) may employ a similar organisational structure. It must be remembered that a different size of operation will require a differing composition of sales and marketing teams. It is also worth remembering that the shared-holiday ownership industry has a robust network of experienced sales and marketing consultancies to support your operation.

*Excludes administrative roles.

KEY SUCCESS FACTORS

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Europe: Opportunity for the Adventurous

EUROPE IS A REGION THAT HAS SO MUCH to offer the tourist, and therefore represents a business opportunity which no operator can afford to ignore. At the same time Europe, like other places, has its challenges with ‘curve-balls’ such as Brexit throwing up some unexpected distractions from time to time. Timeshare has operated in Europe since the 1980s and we have seen a steady evolution from an unregulated environment to one with some of the strictest consumer and industry-specific legislation, anywhere in the world. Those of us who have lived through the changes have helped to build a structure around the complexities of the legislation and the positive is that today we are dealing with a known quantity rather than with ‘what ifs’.

On hand to help A new entrant to the timeshare business in Europe will have the same concerns as in any other industry, namely to make sure they can work within the legislative environment and have a product which is attractive to buyers. As with many sectors, the timeshare operator must also be confident that in delivering their product, they can rely on a range of experienced service providers to supplement the essential services they must deliver to their customers and which, for sound commercial reasons, the operator may not want to resource in-house.

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Consideration: 1.

Legislative environment: At the time of print there are 28 member states within the EU (soon to be one less following Brexit). Fortunately, there is now a predictable and harmonised range of consumer and sector-specific laws in force in each EU member country. As far as timeshare is concerned, most countries have regulated the sales practices, though it is worth noting that some, such as Spain and France, have gone further by imposing specific rules on the structure of timeshare products created within properties in their country. Hire competent lawyers and accountants who specialise in timeshare – money spent upfront can reap benefits in the future.

2. Products: Just as in every other walk of life, we see rapid development and shifts in consumer spending and leisure activity patterns. Timeshare products have had to evolve. The trend is now for the highest quality of accommodation – and the bar was already set high. Resorts are now expected to offer a range of experiences for guests to enjoy on holiday and there is a seemingly unstoppable push towards shorter term products. Skilfully crafted, today’s timeshare product should combine the quality offerings of the traditional


EUGENE MISKELLY

Chairman & Board Member, RDO Legislative Counsel

timeshare with more flexibility for the user and, of course, an even more compelling commercial commitment for the buyer. One of the great strengths of timeshare is that it has always managed to preserve its adaptability to changing circumstances – as well as proving resilient in times of economic fluctuation. An operator should offer a buyer a finance option, and early consideration must be given to which lender to approach. Lending tends to be country specific, so it is never too early to start conversations. The independent trustee/fiduciary plays an important role in the business. Its job is to hold and protect the real estate to guarantee the timeshare-use rights being sold to the purchaser. The purchase can then be made with confidence that there is a property and use period behind it. The trustee has become such an integral part of timeshare projects, that almost certainly any lender will insist on there being one in the equation.

ABOUT EUGENE MISKELLY Based in the UK and Spain, Eugene has been involved over the last 25 years in various aspects of the industry, from trust company and exchange through to developer and resort management. Qualified as a lawyer in the UK, he has worked in private practice, private equity investment and as General Counsel. Eugene also chairs RDO’s Legislative Council and is an RDO Board member.

from resort management, trustee services, and holiday exchange to cruise options and a range of membership benefits. While many aspects of doing business in Europe will come down to local countryspecific requirements, the degree of harmonisation and familiarity of approach is reassuring. Even in the face of economic uncertainty, operators in this industry sector have the advantage of being able to surround themselves with experienced commercial partners who will instinctively guide a new industry entrant to identify the best opportunities for their property, and to do the right thing with it, at the right time. Europe’s many and varied fantastic destinations are always going to attract holiday makers from across the world. Having experiences which are second to none and a well-educated work force to deliver on the promise, means that Europe will always be an enduringly strong tourism market.

3. Service providers: The operator should be keen to ensure excellence in his business, especially in customer interactions, and it is fortunate in this industry to be able to call on a raft of experienced providers offering support in every area of operation,

PROTECTING YOUR CONSUMER

43


Protecting the Consumer & Strengthening Credibility IF YOU ARE OPERATING IN THE TIMESHARE and shared-vacation ownership hospitality sector, then you can be assured that your customers buying timeshare today are protected by the most stringent consumer protection to be found in any of the retail sectors. The industry has implemented two EU Consumer Directives to date – the last one being implemented in 2011 – and both have been translated into domestic law across the European member states. The 2011 EU Timeshare Directive tightened up the first Directive and clarified certain provisions. The most important legal requirements of the 2011 EU Timeshare Directive were a 14-day cooling-off period for purchasers after contract signing, and a total ban on the taking of any deposit monies during that period. The 2011 Directive extended this legislation to so-called ‘long-term holiday products’ that had previously escaped the reach of the first Directive. The inclusion of all long-term holiday products by the EU Commission was done at the request of the timeshare industry, as represented by RDO (Resort Development Organisation), the industry’s governing trade body in Europe.

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Structure and credibility EU legislation under-pins consumer protection for timeshare in Europe, giving the business a secure structure, as well as building credibility and trust among its consumers and industry suppliers. However, RDO, believes that industry operators need direction and support closer to the ground – and closer to home than the lawmakers in Brussels. To ensure best practice in Europe with regard to the sale and provision of timeshare products, RDO implemented the RDO Code of Conduct, and any industry entrant applying to become an RDO member agrees to abide by these regulations. The RDO Code of Conduct is all about treating the consumer fairly, and accepting any RDO decision during mediation procedures when dealing with a consumer issue. It puts a fair and reasonable structure around the business of customer complaint resolution.

Product term Much discussion and publicity has been given to the issue of exit routes from ownership by timeshare owners.


PAUL GARDNER-BOUGAARD

Chief Executive, RDO

This is very much a legacy issue in that it relates back to timeshare products bought in the 80’s and 90’s. It is considered a legacy problem because those early buyers were signed up to either 30-year or in-perpetuity contracts, and found it difficult to get out of them when they reached a stage in life where travel was not possible any longer. Back during the time of purchase, they did want to seek out long-term ownerships, as it was fashionable to ‘own’ assets then. That has changed. Today’s Millennial buyers are looking for more flexibility, reduced financial exposure and are much less likely to find a longterm commitment an attractive proposition than their Baby Boomer forebears did. Most, if not all timeshare products, sold today are offered on a much shorter term of ownership. Typically sold as three-, five- or ten-year ownerships or memberships, they are now sold with a definitive end date to the ownership contract. ‘Try before you buy’ or offering mini-breaks and, say, three-year memberships are ideal ways of allowing potential buyers to sample your brand experience, giving you the opportunity to upsell to those strong sales leads. To deal with the legacy issues for early owners, RDO has introduced a solution by setting out ownership exit criteria for owners at RDO member resorts.

ABOUT PAUL GARDNER-BOUGAARD Paul has been Chief Executive of RDO since 2007 and was formerly a practicing barrister at the English Bar, specialising in EU law. He has worked with the EU Commission in Brussels, before moving into financial services with the Abbey National, where he headed up European expansion, becoming MD of its estate agency network. He then joined the IFG Group where he ran the trustee business and overseas operations, before joining RDO.

Owners can walk away where: • One spouse/partner dies and the other no longer wishes to continue with the timeshare and the next of kin and/or siblings do not want to take it on. • A sole owner dies, and the above provisions apply. • An owner, or either of the joint owners, is suffering ill-health and is no longer able to travel to their home resort. • Personal bankruptcy has occurred and, in addition, RDO recognises that any owner can at any time apply to exit, subject to the permission of the developer and/or the membership club. • The RDO member resort imposes a charge to allow the owner to exit, that cannot be more than three times the annual maintenance fee. A large number of RDO member resorts will automatically grant exit to their long-standing owners, as long as they are up to date with their maintenance payments. As a developer of any shared-holiday ownership business, you must look upon your exit strategy as an entry strategy, because without a properly structured process for owners to hand back their timeshares when circumstances dictate, potential buyers will be reluctant to commit to that contract.

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Considering the Contract THE EU TIMESHARE DIRECTIVE IS transposed into the national laws of the EU member countries, so it is necessary to look at the individual laws of each country to assess the legal requirements in your target market. As the national timeshare laws follow the EU legislation closely, the basic requirements should be fairly consistent across the EU. The most crucial elements are that standard information must be provided to potential owners upfront; the taking of pre-sale deposits is illegal; and any contract signing is subject to a 14-day cooling-off period.

Nuts & bolts Think carefully about your target markets, because the Directive stipulates that all sales contracts and standard pre-sale information must be laid out in the native language of your purchaser or in the language of their country of residence – whichever they prefer, provided it is an official language of the EEA. There is a cost associated with the translation of the materials. Other considerations to note are: • The timeshare product must never be marketed as an investment product that can be expected to increase in value. • There should be complete transparency of purpose and product detail throughout the sales process – from presentations and information distributed at sales events to the contract itself. • Your contract should contain all key product information that had been given in advance. • Include a standard Withdrawal Form making the withdrawal or cooling-off period clear.

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• Always get a clear purchaser signature to prove purchaser awareness of all aspects of the sale. • If an exchange contract is also entered into, this should also satisfy the requirements of the legislation (and if there is a cancellation during the cooling-off period, the exchange contract will automatically fall away).

Shaping your product The Directive does not regulate the structure of your business model or scheme. That is for the resort developer to decide, with guidance and support from the industry experts. A primary consideration is to choose a model that works in the country where your resort is located. It is crucial to take local advice, not only in respect of the timeshare legislation, but also any relevant consumer protection legislation which may affect your plans. Some examples of potential structures include:

Club trustee system The most common timeshare structure used in the UK, it requires the purchasers to join an owners’ club. The club committee works with the resort developer and/or its management company. The units are held in trust by a Trustee company for the benefit of the club members. This model offers your owners protection against developer bankruptcy, which is a strong selling point and will give your purchasers confidence in your product.

Corporate structure Popular for certain fractional products in recent years, your owners become members of a company which is limited by guarantee.


S U S A N M CF A D Y E N Director Business Services - Corporate and Commercial, Blackadders LLP, Solicitors

The company owns the assets or units behind the sold weeks’ intervals and the company directors are often elected by the owners. It is possible to include restrictions on sale, borrowing and creating mortgages against the property, which means that there should be very little risk of the company running up debts and becoming insolvent. Operating in different countries may require different legal structures. Whatever the contractual arrangement, it is important to use a lawyer who is knowledgeable about EU legislation, national requirements, and can draft a contract that is fair to the consumer, thereby instilling confidence. It is worth considering that the Timeshare Directive, and relevant national laws, can also apply to fractional sales, as ‘timeshare contracts’ are broadly defined in the law. Fractional or mixed-use resorts could fall within the definition of ‘timeshare contracts’, even if they are not thought of as timeshare, or marketed and sold as such.

Top tips If you choose to operate a mixed-use model, think carefully how your hotel guests interact with your owners and what facilities each guest category can access. It is important to give your owners some standout benefits to reward their financial commitment to your brand with real value adds. You might consider an exclusive members’ club floor and bar, or complimentary refreshments and services.

ABOUT SUSAN MCFADYEN Susan is a director at Blackadders Solicitors, specialising in corporate and commercial law. She assists a wide range of clients, with a particular interest in holiday ownership, having advised RCI Europe for over 15 years. She has also acted for developers in establishing sharedownership schemes, and in managing legal issues arising from existing schemes.

The market today is moving towards shorter breaks and greater flexibility in ways to holiday. The majority of developers are now selling short-term ownership and memberships of five and ten years. Short-term products give you an opportunity to upsell to those who have bought into your brand experience, and exchange arrangements allow you to offer the flexibility which today’s owners desire. Maintenance fees are essential to maintain your resort quality. However, it may be a better purchase experience, reducing resistance to sale closure, if you incorporate the maintenance fees into the purchase price, instead of setting them as an additional annual levy. Clearly, this will only be possible with a short-term product. Always set an end date to the contract, at which point the property usually reverts back to the developer company for resale. In some fractional schemes, the property will be sold when the contracted period of ownership expires, and a portion of any equity accruing during the ownership period may be shared out between the owners. It is important to remember that the legal structure of the scheme is not specified by the Timeshare Directive or, in general, by local legislation. Your lawyer can guide you to the best model and contract for your situation and purpose. There is much scope to customise your model with a view to, ideally, ensuring the best ROI whilst delivering a great owner experience.

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Working with RCI As the world’s leading exchange company, RCI currently helps more than 3.8 million families each year to enjoy amazing exchange holiday experiences and provides products and services to support the growth of the residential leisure real estate industry across the world. RCI pioneered the concept of timeshare exchange in 1974 and since then has continued to be a leader in the innovation of the shared-ownership industry. An affiliation to the RCI resort exchange network enhances the benefits of your shared-ownership product, giving your customers access to holidays across the world through a holiday exchange platform, that connects your project to more than 4,000 affiliated resorts in 100 countries across the world. Your owners, who become RCI members, also have access to exclusive benefits and enhanced services, including member reward programmes and special offers, in addition to being part of a global member community. With more than twice the number of affiliated resorts than our nearest competitor, RCI gives your owners more quality and variety of exchange holiday options and accommodation than any other exchange provider. RCI Weeks® was the pioneering exchange programme and today it is a fully transparent exchange system based on trading power, while adding additional flexibility and value to our affiliates’ product and member experience. RCI Points® is a global points-based exchange system, the first of its kind in the industry. RCI is part of Wyndham Destination Network, which offers other renowned holiday rental brands including Endless Vacation Rentals®, Landal GreenParks®, Novasol®, Hoseasons, James Villa Holidays, and ResortQuest®. The Wyndham Worldwide group of companies is the world’s largest and most diverse hospitality group.

What can RCI do for you? RCI has partnered with developers and hospitality companies around the globe to create a timeshare, holiday club, with additional fractional and private residence club offerings. As a global leader and innovator, RCI is renowned for being a trusted partner and for delivering first-to-market products and services to its affiliates. With over four decades of experience in the industry, we are well-equipped to support you from strategy development and product design, through to launch and a successful operating phase. Our Business Development and Resort Operations teams have the expertise to support a development or resort of any size or scale and at any stage of planning and implementation. RCI’s 360° approach delivers full circle support to your business, providing the resource, experience and flexibility to work with you on a partnership basis to suit your developments’ needs and support you in creating a successful and resilient product.

RCI can support your business through: • Assisting consideration of feasibility studies, business models, legal framework, brand/ marketing programme design

• Sharing RCI member feedback on resort experience and partnering in on-going resort quality and maintenance

• Putting you in touch with the best professionals in the business to build an experienced support network, such as financiers, trustee companies, legal firms, marketing and sales

• Working with you to create a ‘white label’ own-brand customised club membership product

• Giving you access to its multi-million Euro global technology platform • Providing expert inventory and club management capability • Assisting with product training

• Engaging in direct mail and email campaigns to drive resort occupancy levels and leads • Providing customised point of sale and marketing materials, plus RCI Resort Showcase, RCI LiveStream, RCI Presenter products, RCI TV and RCI.com for members with full online account management access.

For more information visit www.RCI.com or www.RCIAffiliates.com

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WHO IS RCI?

EXCHANGE HOLIDAYS IN

3.8m

100+

MEMBER FAMILIES

COUNTRIES

MORE THAN

50m

MORE THAN

4,000

RESERVATIONS SINCE FOUNDING

AFFILIATED RESORTS

WHO DO WE WORK WITH? • Intimate and independent resorts • Large-scale international operations • Hotels with mixed-use benefits • Residential leisure properties • Luxury, timeless villas

WHAT CAN RCI DO FOR YOU? • Offer 360° support • Business advantage by working with Wyndham Worldwide

• Product definition process • Financial planning exercises • Sales and marketing support

RT T SO EN RE PM UR ELO YO EV D

• Feasibility studies

OR

• Identify opportunities and competitive advantage

• Insight on industry best practices • Worldwide credibility

WHAT IS EXCHANGE?

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ABOUT

The Registry Collection® RCI also services The Registry Collection®, the world’s leading luxury exchange programme, featuring high-end fractional properties, either available for exchange or under development. The Registry Collection® currently has over 43,000 members and approximately 200 properties, affiliated to its exchange programme. Members have access to an elite global network of some of the finest holiday properties at some of the world’s premier destinations, as well as personal concierge services that are available 24 hours a day. From condo hotels and high-end fractional resorts to private residence clubs and fractional yachts, The Registry Collection® programme facilitates exchanges around the world to some of the most unique properties, redefining the luxury holiday and second home experience for owners and developers. Developers affiliated to the programme can offer their purchasers the largest choice of luxury exchange options currently available, as well as benefiting from exclusive developer services such as the Early Privilege Programme. This gives them the opportunity to offer off-plan purchasers the chance to take holidays in The Registry Collection® properties that are available while waiting for the keys to their own properties. To find out more, visit www.TheRegistryCollection.com or www.TRCAffiliates.com

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BUSINESS ADVANTAGE THROUGH

Wyndham Worldwide When working with RCI, you are working with the world’s largest and most diverse hospitality group, Wyndham Worldwide. As part of our network of affiliates, you can take advantage of leading mixed-use development opportunities offered through RCI and Wyndham Hotel Group (WHG), as well as from the wider Wyndham Worldwide group of companies, to grow your development, giving it greater international reach and helping to make it bigger and more successful than it could be on its own. As part of the iconic Wyndham brand, both the WHG and RCI business units are uniquely positioned to deliver the benefits of a large-scale and multi-faceted international operation to your mixed-use project and business.

H OT E L G R O U P

About Wyndham Hotel Group (WHG): • Nearly 8,000 hotels and approximately 679,000 rooms worldwide in 73 countries • 16 internationally-recognised hotel brands, including Wyndham Hotels & Resorts, Days Inn, TRYP by Wyndham, Super 8 and Dolce Hotels & Resorts

About Wyndham Destination Network (WDN): • More than 112,000 properties in over 100 countries • 8 internationally-recognised brands, including RCI, James Villa Holidays, Hoseasons and Cottages.com • More than 10,000 office staff working in offices across 34 countries • More than 13 million families sent on holiday in 2015

For more information on how RCI and Wyndham Worldwide can create advantage for your business, contact Amanda White at Amanda.White@RCI.com

WHAT IS EXCHANGE?

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V I DEO BROCHURE

PACKAGE YOUR PRODUCT

WITH A

BROCHURE LIKE NO OTHER Break the boundaries of your printed materials to inspire, excite and motivate your new buyers. RCI Video Brochures embed a high-quality video of your choice into a traditional printed brochure, helping your buyers to visualise ownership. Choose from: Customised

Co-branded

Templated

For more information on how our RCI Video Brochures can transform your sales materials, contact your RCI Affiliate Services Manager Design is used for illustrative purposes only. Actual product may vary.


Key Global Trade Associations RDO

ARDA

www.rdo.org RDO (Resort Development Organisation) is the trade association for vacation ownership across Europe, encompassing a number of usage types including timeshare, fractional interests, private residence clubs, condo hotels, destination clubs etc, aimed at providing holidaymakers with quality holiday accommodation through various concepts of use. RDO members represent the best in European vacation ownership and are committed to high service standards and integrity. They are bound by a Code of Conduct and an independent arbitration scheme, providing levels of protection beyond those required by law. The RDO logo is the kitemark for quality and trust in the industry.

www.arda.org The American Resort Development Association (ARDA) is the Washington DC-based trade association representing the vacation ownership and resort development industries (timeshares). ARDA has almost 1,000 corporate members ranging from privately held firms to publicly traded corporations with extensive experience in shared-vacation ownership interests in leisure real estate. The membership also includes timeshare home owner associations (HOAs), resort management companies, industry vendors, suppliers and consultants; as well as owners through the ARDA Resort Owners’ Coalition (ARDA-ROC).

VOASA

AMDETUR

www.voasa.co.za VOASA, or Vacation Ownership Association of Southern Africa was previously known as the Timeshare Institute of Southern Africa (TISA). Established in 1990 as an organisation representing the interests of the South African vacation ownership industry, as well as supporting new buyers and owners of vacation ownership products, including; conventional timeshare, points clubs, fractional ownership, destination and private residence clubs. A key contributor to VOASA’s existence is the protection of consumer rights and the stimulation of the on-going growth within the industry in a positive and organised manner.

www.amdetur.org.mx AMDETUR – The Mexican Association of Tourist Developers encourages the development and integral growth of the tourism real estate property sector in Mexico with a sustainable and competitive approach. AMDETUR has driven growth and sustainable development of shared-vacation ownership, through best practices and management processes, transforming it into a highly competitive industry and one of the pillars of tourism and economic activity in Mexico, positioning itself as a reference point worldwide.

WHAT IS EXCHANGE?

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AIPP

AIRDA

www.aipp.org.uk The Association of International Property Professionals is a global organisation dedicated to building confidence in international property markets, representing industry professionals and promoting the highest standards of professionalism in the property development markets across the world.

www.airda.org AIRDA – The All India Resort Development Association, is an independent, nonprofit advisory body dedicated to the Indian timeshare and holidayownership industry. In 1998, a visionary group of resort developers and RCI inked a blueprint for an independent body – an association with a purpose and an agenda – keeping in mind the nascent profile of timeshare in the country and the constructive role that could be played by developers to grow the industry. Importantly, it works handin-hand with both promoters and consumers.

Leisure Real Estate Trends & Opportunities


RDO: The Voice of the European Vacation-Ownership Industry

RDO represents the very best of the industry in Europe, delivering a range of benefits to its resort-developer members. RDO is there to: • Raise industry standards • Promote ethical practices and professional integrity through its Code of Conduct

• Support resort developers, offering expert guidance and industry reporting • Provide annual KPIs for its members’ resorts

As an RDO member, signed up to the Code, you are giving your buyers the assurance that they are dealing with a responsible and professional company. The RDO logo is recognised as the kitemark for quality and excellence.

Give your customers more reason to trust and buy your product through your membership of RDO

For further information or to request an RDO membership pack, visit www.rdo.org or email info@rdo.org


REGISTERED OFFICE: KETTERING PARKWAY, KETTERING, NORTHAMPTONSHIRE, NN15 6EY REGISTERED IN ENGLAND AND WALES, COMPANY REGISTRATION NUMBER: 01148410 VAT REGISTRATION NUMBER: GB217704768 www.RCIAffiliates.com www.RCIVentures.com www.TRCAffiliates.com www.WyndhamWorldwide.com

Leisure Real Estate Trends & Opportunities  

Leisure Real Estate Trends & Opportunities, 2017