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T H E B U S I N E S S O F VAC AT I O N Q 1 /Q 2 2 0 1 7

S M A L L ST E P S BIG GAINS Dubai, Turkey and the CIS climb to new heights

IIRO ROSSI Profile on Holiday Club Resort’s new MD

CARLOS MONSERRAT Plans for industry evolution in Spain

TOURISM IN GEORGIA The potential of a little-known country


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CONTENTS

IN BRIEF 4 News The latest news from Europe and around the world

Welcome RCI Affiliates

INSIGHT 6 Taking New Steps Iiro Rossi faces a new challenge as Managing Director of Holiday Club Resorts 10 The Changing Face Of Familiar Shores Carlos Monserrat’s new venture for a changing business on the Spanish Costa IN DEVELOPMENT 14 Small Steps, Big Gains: Dubai – Creation Of A Destination Dubai’s transformation from real estate hub to hot family holiday destination 22 Georgia – On The Tourist Map Alliance Group explores the potential of the Georgian leisure real estate market IN DEPTH 26 Small Steps, Big Gains: East Emerging Stronger timeshare associations in Turkey and the CIS drive industry strength 30 Social Media Masterclass The importance of the integration of social media into marketing strategy FINAL THOUGHT 34 Risks Of Division The BHA’s CEO, Ufi Ibrahim, assesses the impact of Brexit and homestay programmes

There are many high-profile destinations where shared-vacation ownership is an established industry, however, it is exciting to know that some regions and countries still have room to exploit the full potential of the product. In considering the further opportunities, in this issue we take a look at Turkey and the Commonwealth of Independent States, to evaluate what several key industry stakeholders in those regions have been doing to create a business environment in which our industry can prosper. Their influence extends to driving the implementation of a much-needed structure by supporting their own timeshare trade body associations. We track their steps to big gains on page 26. In our cover feature on page 14, we chart Dubai’s progress through its total transformation from a real estate hub to a world-class family holiday destination with entertainment and theme parks to rival the best in the world. The government has also identified the importance of regulatory structure for our industry if it is to reach its full potential in Dubai, and new legislation is set to be implemented this April. Transformation through product innovation would be impossible without influencers and advocates to drive change. In our interview with Iiro Rossi on page 6, he talks to us about filling the big shoes of Vesa Tengman as Managing Director of Holiday Club Resorts; and with those big shoes, come big plans to carry the group forward. We also welcome Carlos Monserrat to this issue of the magazine. He has news of his new venture on the Costa del Sol as a partner of Independent Management Services, which supplies turnkey solutions to hoteliers, investors and developers, see page 10. With a combined industry tenure of 51 years, the business insights of Rossi and Monserrat are invaluable to anyone looking to develop a shared-ownership product in today’s marketplace. I hope, as ever, you find this issue of your RCI Ventures magazine a useful and informative read.

S E A N LOW E

Managing Director RCI Europe, Middle East, Africa and India

Visit rciventures.com for news of the worldwide shared vacation ownership industry and insight from the experts.

  is published by RCI, a trading name of RCI Europe, Kettering Parkway, Kettering, Northants, NN15 6EY, United Kingdom. Tel: +44 (0)1536 314266. Email: helen.foster@rci.com EDITOR: Helen Foster. ASSISTANT EDITOR: Leigh Connelly CONTRIBUTING EDITOR: Steve Adams. DESIGN: Charlotte Semark, Ginny Knight, Charlie Hayes. PRODUCTION: Claire Williams, Helen Gurney, Trevor Lewis, Leigh Connelly. PRINTING: Portland Print. PHOTO CREDITS: Shutterstock, Getty Images. ILLUSTRATIONS: Cover and page 26 - Charlotte Semark. Original articles and contributions may be reproduced or transmitted only with written permission from the publisher. All facts and figures stated in the articles contained in this publication are provided by the contributors and no responsibility is accepted by RCI Europe for content not created by them, nor for any losses or other consequences resulting from advertisements or other material appearing in this publication. You are advised to make your own enquiries and conduct further research if necessary. © RCI Europe 2017

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I N D U S T RY & R C I N E W S

IN BRIEF

RCI adds more properties to exchange network

Balkan Jewel Resort in Bulgaria.

RCI continues to strengthen its position as the world’s leading holiday exchange provider by affiliating exciting new resorts into its exchange network. The company added more than 100 properties during the first three quarters of 2016, boosting holiday options for its members, as well as improving the sales proposition for its affiliated developers. The latest additions include resorts in Europe, Asia, the Caribbean, India, Latin America and North America, creating more exciting and diverse holiday options for RCI members. Among resorts to join the company’s exchange network are Balkan Jewel Resort, RCI’s first affiliate in Bulgaria; Golden Prague Resort Salabka in the Czech Republic; Grand Muthu Golf Plaza and Hard Rock Hotel Tenerife, both on the ever-

popular Canary Island; Forte Da Oura in Portugal, Sterling Regal Vista in Agra, India; and, in the UK, Cameron Club Lodges, Belton Woods, Slaley Hall, Belstead Brook Hotel and the Westcliff Muthu Hotel. Dimitris Manikis, VP, Business Development, RCI Europe, Middle East and Africa, said: “At RCI, we have a commitment to our members to continually expand the options we offer, as well as to seek out new destinations that provide authentic cultural experiences. “Expanding our holiday horizons for members is a priority for RCI, so we are delighted to welcome our first resort in Bulgaria. We’re also working hard to extend the choice in our most popular destinations, such as Tenerife, Portugal and the UK, where we’ve added a range of exciting new properties.”

EVR is the perfect incentive RCI is improving its service to its affiliate partners by offering a wide range of accommodation for use in rewarding, acquiring or retaining customers and members. Through its direct-to-consumer rental business, Endless Vacation Rentals (EVR), RCI is enabling its affiliates to enhance the appeal of their product through services such as:

• T  rial programmes • V  oucher programmes • R  ental programmes • C  ustomer incentive and benefits programmes • Fulfilment of lifestyle and membership programmes. Dimitris Manikis, VP, Business Development, RCI Europe, Middle East and Africa, said: “Endless Vacation Rentals is a great way for our affiliate partners to develop incentive programmes to reward or retain their customers by offering great deals at 200,000 vacation rentals in nearly 100 countries around the world.” RCI affiliates can find out more by contacting their RCI Regional Affiliate Services Manager.

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LGBT annual travel market worth US$211 billion A new study has revealed the global lesbian, gay, bisexual and transgender (LGBT) travel market is worth more than US$211 billion in consumer spending per year. International research by specialist consultants, Out Now, as part of the LGBT2030 programme also showed continuing expansion in key LGBT markets around the world. Ian Johnson, Chief Executive Officer of Out Now, said: “The global LGBT market continues to be one of healthy growth, with opportunities for a growing

number of travel industry participants. “However the consumer market continues to raise its expectations and there is much work to be done by the industry in the areas of communications improvements, strategy development, training and quality assurance for LGBT travellers.” Johnson said LGBT travellers expect the same level of welcome and respect as other guests and that the latest market valuations show that targeting LGBT customers “is not only the right thing to do – it is also smart business”.


I N D U S T RY & R C I N E WS

HGV looks to independent future

Global timeshare giant, Hilton Grand Vacations (HGV), is now an independent, publicly-traded company following its spin-off from Hilton. The business began ‘regular way’ trading on the New York Stock Exchange in early January, a milestone that marked

Website offers enhanced experience RCI continues to invest in its online presence to provide the best possible service and user experience to its members and affiliate partners. A selection of pages on the member website, RCI.com, will soon be responsive on any device – from mobile to tablet – to give RCI members a seamless experience when they search and transact online. The latest version of the website includes a new-look home page that provides RCI Weeks members with all their key account information as soon as they login. It also provides a new map view that enables members to search for resorts

across the world and see which ones are available. The same enhancements will be rolled out to RCI Points members at a later stage. Tanya Lee, Director of Product, Channel and Content at RCI Europe, said: “We’re constantly upgrading our systems to ensure the user experience is the best it can be for our members and affiliate partners. “With more and more people accessing the internet and making online transactions through their mobiles and tablets, we made it a priority to invest in upgrades to the RCI site to deliver a better exchange holiday search, planning and booking journey to our members.”

IN BRIEF

Mark Wang, HGV President and CEO.

an “exciting next phase” in HGV’s development, according to President and Chief Executive Officer Mark Wang. “Since its founding 25 years ago, HGV has been an industry-leading timeshare business with a track record of best-inindustry growth,” he said. “I look forward to HGV’s continued success as we deploy our experienced management team, dedicated strategies and capital to take advantage of future opportunities.” A long-term RCI affiliate, HGV was established in 1992 and now operates 47 resorts around the world. Wang added: “We will continue to leverage our capital-efficient business model to invest strategically and expand globally, delivering exemplary service and exceptional vacation experiences.”

RCI expands social media offering RCI is continuing to expand its social media activities to communicate with its members, timeshare owners and potential owners in the increasingly powerful online space. A new Instagram page was launched last year, providing another way for RCI members to engage with the brand and share their love of travel using exchange holidays. In addition, the RCI Europe Facebook page now has a community of more than 430,000 committed travellers. Tanya Lee, Director of Product, Channel and Content at RCI Europe, said: “With our dedicated social media team behind it, we are confident the Instagram page will have the same success as our Facebook page. “One of the top five marketing channels, Instagram is now one of the ‘go to’ places for destination and travel inspiration, and is hugely influential for people planning their holidays. Happy owners are fantastic ambassadors for timeshare and a great advertisement for the industry – we really encourage our affiliate partners to get their owners and resort staff to join these conversations on social media.” • Follow RCI at: Instagram.com/rcieurope and facebook.com/rcieuro

R CI VEN T U RES 5


INSIGHT

Taking New Steps Iiro Rossi is ready for the challenge of filling some big shoes as he takes over as Managing Director at Holiday Club Resorts. BY STEVE ADAMS

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IT’S BEEN A MOMENTOUS 18 MONTHS FOR Holiday Club Resorts (HCR), Europe’s largest sharedholiday ownership timeshare company. In summer 2015, the Finnish business was effectively sold to Mahindra Holidays & Resorts when the Indian giant raised its stake in HCR from 23 to 86 per cent, while in 2016 – its 30th anniversary – the company’s longserving CEO, Vesa Tengman, stepped down from the role. A leading light in the European timeshare industry, Tengman, who remains an advisor, as well as on the company’s Board of Directors, had led HCR for 25 years, overseeing its growth into one of Europe’s major players, with 31 resorts and more than 55,000 member families. New CEO, Iiro Rossi, is now aiming to build on Tengman’s legacy, and having worked alongside him for five years as the company’s Director of Business Development, he knows he’s following in the footsteps of an industry giant. “In Finland we have a saying about ‘stepping into somebody’s big shoes’, and in this case it’s definitely true,” he said. “I need to buy my own shoes for them to fit at the moment!”

In Finland we have a saying about ‘stepping into somebody’s big shoes’, and in this case it’s definitely true.

Iiro Rossi, Vesa Tengman’s successor at HCR.

About Rossi If that all sounds like a daunting task, then Rossi’s longterm experience, both in and out of the travel and leisure industry, should serve him well. “I first got acquainted with the travel business in 1991 when I was writing my master’s thesis about the launching of a service product,” he said. “One of the case studies happened to be a recently-opened resort called Katinkulta, which is now our flagship resort and the biggest in the Nordics.” After completing his studies, Rossi worked in the marketing department of a book publisher that was then part of Amer Group – now a leading sports goods producer with brands including Wilson, Atomic and Suunto – only to be drawn back to the site of that original case study… A scenario that was to become a theme throughout his career. “In 1996 Vesa asked me to join the company which was soon to be transformed into Holiday Club Resorts. One of the attractions for me was that the company was aiming to buy Katinkulta,” said Rossi. “I joined, and after some challenging times, we bought Katinkulta, as well as several other spa hotel resorts.” Rossi said the company’s business philosophy at the time was very similar to the way it operates to this day. “The basic idea was to have attractive central facilities – including sports, activities, restaurants, spas, and such – and then have or build a hotel and timeshare units around them. Later we added fractionals as well, which we call Villas,” he explained. “Most of the sales tours would then take place on site, primarily as mini-vacs or fly-buys. We still believe in that concept and it is the basis of our operation. In addition to that we have grown to be a significant conference and event organiser as well. “Today the company is more than 35 times the size it was when I started, and employs more than 1,000 people.” In 2002 Rossi left his role as HCR’s Deputy Managing Director to become a local Managing Director for an international cosmetics company, but returned to start up HCR’s businesses in Russia. R CI VEN TU RES 7

INSIGHT

Learnings Quick to praise Tengman’s work in overseeing the company’s rapid growth, Rossi is nevertheless determined to be his own man as he aims to take HCR on to even greater success. “Vesa and I have worked very closely over the years and I have learned a lot from him and am grateful for that. Now I want to combine what I’ve learned with a slightly different approach,” he explained. “I have seen and been part of some brilliant business manoeuvres – some of which might have been a bit too brave for my world! The key things I’ve learned from Vesa are related to different kinds of negotiations and having a relentless attitude – not forgetting understanding the business and number crunching of course.” That number crunching spans a major operation – HCR has 2,173 holiday homes at its 31 resorts in Sweden and Spain, as well as in Finland. It also operates eight spa hotels encompassing 1,159 hotel rooms, employs more than 1,000 staff, and has an annual turnover in excess of €150 million.

FILLING BIG SHOES:


INSIGHT

After leaving again, to work for other businesses, as well as operate as an entrepreneur, he returned for a third time in 2012 as Director of Business Development, working alongside Tengman on a range of transactions and deals to grow and expand the business. But as much as it appears he’s been unable to escape – a notion that brings a hearty laugh – there’s a real sense that Rossi has found his natural place at the helm of what feels very much like a family company. “There’s definitely a family atmosphere, even though HCR has had several owners,” he said. “That has been very much down to Vesa, who has been a major shareholder and was always very keen to run the company as a family. “What brought me back twice? The spirit of the company, constant development, good products, interesting business, and long-term colleagues – Vesa, of course, playing a major part in all of these considerations.” During Rossi’s career with the company, he has learned the ropes by working in a wide range of roles. “I have now worked for the company for 13 years, but been involved for 20, most of the time as a small shareholder as well,” he said. “I have been responsible in different periods for marketing, sales, various business units, human resources, legal, IT, business development and mergers and acquisitions.”

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Milestones Rossi’s period working alongside Tengman for the past five years has coincided with one of the most exciting and productive periods for the company. Just before Rossi’s return, HCR created subsidiary company, Holiday Club Canarias, through the acquisition of five resorts in Gran Canaria. On his return, HCR entered into several transactions, the most significant being the Mahindra deal and the purchase of the Turun Caribia Spa Hotel. In addition, the company has developed the Villas Concept, with the construction of high-quality apartments at Katinkulta, Saimaa and Kuusamon Tropiikki; announced preliminary plans for a spa, hotel and holiday accommodation in Himos in central Finland, and formed a property company with the Municipality of Salla to boost tourism through expanded and improved accommodation to that region of eastern Lapland. The company also launched the Angry Birds Activity Park concept in partnership with Rovio Entertainment, the Finnish creators of the popular children’s video game. The first and biggest Angry Birds Activity Park opened in Vuokatti in December 2012, and has since been followed by others in Saariselkä, Saimaa, Kuusamo and Puerto Rico in Gran Canaria.

ARUN NANDA Board Chairman, Mahindra

HCR FLAGSHIP VILLAS:

(Clockwise) Holiday Club Saimaa. The largest resort in the Nordics, Katinkulta. Elegant interior of Kuusamon Tropiikki.


LOW RES THE NEXT HCR DESTINATION:

The town of Himos in central Finland.

But the most significant development during the past five years has been the company’s sale to Mahindra Holidays & Resorts, part of the massive Indian conglomerate, the Mahindra Group. A leading player in the Indian leisure hospitality industry, it operates 41 resorts in India, Austria, Dubai, Thailand and Malaysia, and has a membership of more than 200,000 families. The synergies between the two companies are obvious, with Mahindra seeing HCR as the ideal route into the European market, according to Board Chairman, Arun Nanda. “We want to be a part of Holiday Club’s growth story in Europe and offer our customers new holiday opportunities,” said Nanda at the time Mahindra made its initial acquisition of 23 per cent of Holiday Club. “We have been impressed by Holiday Club’s operating models and believe that we can also apply some of them in India.”

HOLIDAY CLUB RESORTS: FACT FILE

Largest vacation ownership enterprise in Europe Established in 1986 as Suomen Lomapörssi – name changed to Holiday Club in 1998 Resorts: 31 – 23 in Finland, 2 in Sweden,

6 in Spain (5 in Gran Canaria, 1 in Costa del Sol) Timeshare ownership:

55,000+ member families R CI VEN TURES 9

INSIGHT

Another benefit is the confidence that being allied to such a strong multinational business brings. “Holiday Club was previously owned by Finnish financial institutions, private equity investors and even the Finnish authorities,” explained Rossi. “These were all very strong owners, but Mahindra is the first from the hospitality sector that truly understands the business.” One of Mahindra’s stated aims is to expand into Europe, so that business understanding, combined with the expertise of HCR’s management, will be key to development in the coming years. Rossi sees Russia as a major source market, and while Mahindra might look to focus on the warmer climes of mid- and southern Europe, he’s also keen to exploit opportunities closer to home, in neighbouring countries such as Sweden. “It makes sense to continue our steady and profitable businesses in Finland, while trying to develop a bigger footprint in our second home market of Sweden, where we already have a very nice resort in Åre,” he explained. Rossi suggested some elements of the company’s future Scandinavian spa and hotel operations could potentially be operated by third parties. He added that everything was up for discussion as he looked to secure future growth, for which all avenues of opportunity would be explored. “Together with our parent company and our excellent international team in Gran Canaria, we will be looking for synergies and opportunities to be found elsewhere in Europe,” he said. “Whatever happens, we are now part of a bigger entity and our plans will be collaborative.”

INSIGHT

Looking Ahead Mahindra has since raised its stake in HCR to 86 per cent, and while the long-term aim is to develop closer ties between the businesses, the brands will retain their own identities and, for the moment, their own operational styles, according to Rossi. “We believe in the Holiday Club concept and we will continue to rely on our strengths,” he said. “About half of our turnover comes from timeshare and fractional-related businesses and the other half from the spa hotel business, including all the services.” Rossi said strategy work with Mahindra was ongoing – he is frequently in contact with Arun Nanda – however, for the most part, the new owners are relatively hands-off and it’s more a question of ‘business as usual’ while developing synergies between the organisations. “Some of our customers have travelled to Club Mahindra resorts and vice versa, and that opportunity will be taken further,” said Rossi. “We have learned a lot from each other and will learn more. Even though our products and concepts are quite different, there is a lot of benchmarking to be done.” Rossi said technology was a key area where synergies and cost-savings could be found. “Half of the Mahindra Group’s business, in terms of employees, is IT – it is the fifth biggest IT company in India, as well as huge globally – and Mahindra Holidays uses those services exclusively. I’m sure we’ll find some benefits there.”

LOW RES (BRIGHTENED)


INSIGHT

The Changing Face Of Familiar Shores

CARLOS MONSERRAT and the shared-vacation ownership industry go back a long way. Now a partner of Independent Management Services on the Spanish Costas, Monserrat is set to play a key role in the evolution of a business that never stands still.

CARLOS MONSERRAT Co-Founder and Director, IMS

BY HELEN FOSTER

THIRTY YEARS AGO, WHEN CARLOS Monserrat entered the shared-vacation ownership

vacation ownership resort management company. His confidence in the shared-vacation ownership and

industry as Managing Director of Vacation Care

residential leisure real estate products is as strong today

International, based in MĂĄlaga, the company secured

as it was back in the 1980s, as evidenced with the launch

the management contracts of 23 resorts. The product

of a new company, Independent Management Services

landscape back in 1987 was populated with traditional

(IMS), in 2015, with business partner, Carlos Martin

fixed weeks, units and resorts. Between 1987 and 2001,

Granados. Headquartered in Fuengirola, on Spain’s

Vacation Care became the largest independent European

Costa del Sol, IMS provides an integrated and customised

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CARLOS MARTIN GRANADOS Co-Founder and Director, IMS


The coastline of the Costa del Sol is ripe with resort development opportunities.

service to hoteliers, timeshare resorts, tourism apartments, property investors and developers who want to get more out of their property assets by converting and restructuring both their buildings and business models to take advantage of the increasing appetite for new residential leisure real estate product offerings along the shores of one of Spain’s most popular holiday hotspots. “Shared-vacation ownership is, today, a respected and desirable product. I truly believe that,” said Monserrat. “Consumers today are wiser and want tangible value for money and flexibility in all the products they buy. Shared-vacation ownership is now a very consumerfriendly and transparent product, and this is reflected in the modern sales process. It is aided by the arrival of global hospitality brands actively developing a full range of products in resort and urban destinations.” Referencing the recent US AIF ARDA studies, Monserrat highlights the new buyer demographic – median owner age of 51 years old, with new purchasers being 39 years old and having children – as being a demographic for which a flexible leisure real estate concept holds great appeal.

To simply build, sell and move on is not always enough in today’s residential leisure real estate market. – CARLOS MONSERRAT

Shifting Sands & Synergies “It is down to the companies in the industry to recognise these changes and shifts in consumer expectations, and to invest in product innovation,” said Monserrat. “We have had many changes in legislation and regulation, and the companies which have survived, coming out on top, are professional companies which are open to change. I feel very positive that the industry will continue to adapt to an ever-changing world.” It is a good time to be thinking about launching or relaunching a leisure real estate product in southern Spain. In watching the region’s property market, Monserrat reports seeing an increasing interest in quality residential leisure real estate from overseas buyers – but they want some property pampering. R CI VEN TURES 1 1

INSIGHT

NEW HORIZONS:


INSIGHT

“To simply build, sell and move on is not always enough in today’s residential leisure real estate market.” said Monserrat. “Foreign buyers want a hassle-free ownership experience. They want help with the management of their property, a return on their investment, as well as ways of getting more out of their property as a vacation product. The younger buyers want a place to spend a few weeks of the year and they want it taking care of when they’re not there. They are also looking for the unit to help cover its maintenance costs. Ongoing services are very important to them; and in that respect, it is a similar proposition to the shared-vacation ownership model.” This is where IMS has much to offer the market at this time. Given the wide and relevant professional experience of its two partners in both investments in residential tourism real estate projects, and in resort management and administration, IMS is ideally positioned to work with developers of new residential leisure real estate projects. Carlos Martin Granados is a vastly experienced lawyer on the Costa del Sol, with a wealth of knowledge in setting up companies, representing foreign investors, advising and acting as a director of a number of timeshare companies, and dealing with the regional governments along the Costas in contract negotiations. He is also an old friend of Monserrat’s, who himself has an excellent pedigree in resort management, having moved from Vacation Care to Wyndham Vacation Resorts in Orlando (2002-2004) as a regional VP; served as VP Member Services, Network & Resort Operations at Club Meliá, also in Orlando (2004-2006); held the post of Resorts’ Operations Director with CLC World Resorts & Hotels in the Canaries (2006-2013); becoming Managing Director of Club Meliá – Europe (January 2014 – February 2015). Monserrat and Granados worked together for 12 years at Vacation Care, and are now launching new vacation tourism products along Spain’s sunshine coast. “Our professional backgrounds complement one another perfectly,” explained Monserrat. “We now offer a personalised and customised service under the IMS brand. The majority of our clients are international investors: either new to the business looking for investment opportunities in residential tourism and leisure products, or existing developers wanting to restructure and launch new products, as well as existing hotel and timeshare operators looking to reinvent their brand experience.” IMS offers a turnkey resort development and operation solution, from feasibility studies and dealing with the legalities involved in land purchase and planning permissions, through to setting up sales teams and hotel/resort management. “Because we are selling a vacation experience with ongoing services, we have identified the similarities between what is wanted today and timeshare, so we work with salespeople with experience of selling timeshare. The leisure real estate product, as it is sought and bought today, is complex and requires a different, more in-depth, professional sales process.” Monserrat explained. A tourism law enacted by the regional government – Junta de Andalucia – in late 2011 created an attractive framework for investment in residential tourism development in the ‘Tourism Apartments’ segment of

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the market. The law offers incentives to the purchasers of vacation homes, but allows only a two-month use period by the owner. The remainder of the year’s use must be ceded to the management company for exploitation, including rental programmes and shared-vacation ownership schemes. The government is using tourism apartments to boost tourism, create jobs and increase the country’s gross domestic product revenues. Sharedvacation ownership and private residence clubs are concepts that sit well within this framework, something Monserrat and Granados were quick to identify. “The law has teed this up nicely for the business models that both we and RCI see great potential in,” said Monserrat. “Mixed-use resorts and properties, together with other leisure real estate models, bring the flexibility to market that is desired. These products are aligned to the important political issues of job creation in Spain, driving footfall into the region and strengthening regional economies. Similar laws have been passed in other regions of Spain.”

UPSCALE Spain has a lot to offer the holidaymaker, which is why PROJECTS: it has kept its tourism crown for decades. Tourists are One of the IMS projects in now coming into the country from as far away as Asia and Spain’s interior. the US, and they are looking for the cultural experiences, which Monserrat sees as an opportunity to develop the country’s interiors, away from the coastal regions. While in the coastal regions, with the march of the affluent Millennial purchasers, there is a great opportunity to redevelop some of the tired and dated vacation properties to transform them into more upmarket US tourists visited developments with an appeal to the Spain in 2015 younger buyers.

1,220,562

Monserrat commented: “Tourism is becoming more diverse which brings opportunity. The uncertainties in formerly popular holiday destinations, such as Egypt and Turkey, have seen tourist numbers in Spain grow.”


INTERNATIONAL TOURISTS TO ANDALUCIA 2001-2014 8,600,000 8,400,000 8,200,000 8,000,000 7,800,000 7,600,000 7,400,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SOURCE: Instituto de Estudios Turísticos (IET). Ministerio de Industria, Turismo y Comercio.

New international hotel brands are now gracing the Costas and changing its look and feel as a holiday destination.

In The Pipeline IMS currently has several new deals in its pipeline on the Costas; each a new product model embracing different components of the residential leisure real estate business model. In particular, the developers are looking for product options that allow the ceding of unused stay intervals into rental and vacation exchange programmes to build in the valued flexibility which also supports the government’s tourism apartment initiative. Increasingly, Monserrat and the IMS team are working with RCI in these projects. “We met with RCI’s Dimitris Manikis last September and we agreed that there is great potential in this product, in this market, at this time,” said Monserrat. “I have worked with RCI for many years in my different roles, particularly with resort affiliate servicing, and in the launch of new products during my time with

Visit www.imsmanagementservices.com for more information, or email info@imsmanagementservices.com

R CI VEN TU RES 1 3

INSIGHT

FACELIFT:

Club Meliá, when RCI supported us with a wide range of services. “RCI has always been very supportive, both to the resort developers, and in helping to promote and protect the industry with a genuine, heartfelt commitment.” The new Andalucian tourism laws have opened the doors to many new resort development opportunities and IMS has seized the moment to make the most of the possibilities, as Monserrat explained: “Whether you have a hotel, resort or freehold leisure property, there is a business model option to bring new benefits for you. Such properties have the potential to blend well with the concept of private residence clubs. Those models have done well in the US, and I see that business model as having a strong potential for growth in Spain.” There will be a need for some legal and operational restructuring for a resort or hotel property to take advantage of the tourism apartments opportunity, but Monserrat and his IMS team believe the rewards are well worth the trouble to build foundations for growth in a changing world. “IMS has seen healthy levels of activity and interest since its founding in 2015. We are talking to a number of foreign investors who are looking to acquire leisure property developments, hotels and resorts. One client is interested in expanding its existing offering with a vacation club. “With older, distressed properties in prime locations looking like good long-term investment projects, we will be seeing a new, upmarket, facelift to the Costa del Sol and, indeed, other popular Spanish destinations,” said Monserrat. “It won’t be long before we see international hotel brands coming into the Costa del Sol. Hilton Hotels has returned with its DoubleTree brand, and others will surely follow. We are at the start of a new chapter in the life of the Costa del Sol as one of the world’s greatest vacation destinations, offering vacation product and experiences that are crafted for the buyers of tomorrow.”


SMALL STEPS, BIG GAINS

IN DEVELOPMENT

Dubai – Creation of a Destination Having taken the real estate stage when its property market enjoyed exponential growth in the late 90s, Dubai was in the spotlight for very different reasons during its market’s first major crash in 2009. With lessons learned, Dubai is now on its way to becoming a vacation destination showstopper. BY H E L E N F O S T E R

14 Q 1 /Q 2 2 01 7


IN DEVELOPMENT

LAST YEAR, HIS HIGHNESS SHEIKH Mohammed bin Rashid Al Maktoum, ruler of Dubai and Vice President of the UAE, set out his vision of the future for his region in a LinkedIn letter that went viral. In that letter he stated that his goal is to make a path for the UAE “that frees future generations from dependence on the ever-fluctuating oil market”. He also pointed out that AED300 billion (US$81 billion) has been invested in the diversification of the UAE economy to build a long-term sustainable model. His words provided inspiration and hope for the region’s youth, as well as promoting confidence among investors in the UAE’s hospitality and leisure real estate market. The UK, US and Canada were among the top five countries viewing and sharing his LinkedIn post, clearly demonstrating the overseas’ commercial interest in his business strategy for Dubai and the UAE. Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) highlighted new initiatives aimed at further enhancing the overall visitor experience during the UAE Tourism Innovation and Transformation Forum 2016, held in cooperation with the United Nations World Tourism Organisation (UNWTO) last November. Dubai Tourism, working with the government, has helped to raise Dubai’s hotel capacity from 15,000 rooms to more than 100,000 rooms in recent years. Tourist arrivals numbered more than 14 million in 2015, according to Dubai Tourism records. Its records also state that India has become the Emirate’s top tourist source for the first time, sending more than 1.6 million visitors in 2015, while Saudi Arabia followed with 1.54 million visitors. Dubai’s Crown Prince, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, visited the offices of Dubai Tourism last year to discuss the progress of Dubai’s Vision 2020 project. He told the meeting: “Sheikh Mohammed’s directives to property developers to develop family leisure destinations will enable us to welcome an additional five million holidaymakers.” He also said there would be directives to grant Chinese tourists visas upon arrival, adding: “We are planning to establish Dubai as the first destination for Asian tourists.”


IN DEVELOPMENT

Eyes On The Prize With the vision, direction, and capital of Sheikh Mohammed and Dubai’s government to back it, the tourism sector is clearly going to be a winner in the global tourism stakes. As Sheikh Mohammed’s strategy is implemented, Dubai is transforming with every month that passes from an upscale location for exclusive real estate to a family vacation destination that will rival the best in the world. At the 2016 Forum, His Excellency Eng. Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said: “With our wise leaders’ support for tourism, the government seeks to further develop the sector by building essential infrastructure. The future of the local sector is bright, especially as it begins to attract global interest thanks to its capability to provide unique and innovative services. More and more visitors are now repeatedly coming back to the country. The challenge lies in our ability to continue this journey and sustain the

We saw a 15% increase in Chinese visitors last year, largely driven by an agreement with the Dubai Government waiving visa requirements for them. – DIANA JARMALAITE, Euromonitor International

16 Q 1 /Q 2 2 01 7

required momentum. We have no doubt that innovation in tourism development is key to minimising challenges.” Characteristic of Dubai, 2016 saw the opening of an entertainment complex of theme parks of spectacular magnitude (see page opposite). Now the largest entertainment hub in the region, Dubai Parks and Resorts is designed to support the government’s tourism business goals and is set to attract both tourists and resort developers in significant numbers. The Wyndham Hotel Group (WHG) has eight hotels and resort properties in Dubai - 16 across the UAE operating under franchise and management agreements. Panos Loupasis, VP of Development for the world’s leading hospitality group told RCI Ventures that it has a further 1,600 rooms under development in Dubai. Clearly excited by the new developments, he said: “Dubai remains a regional leader in innovation in the leisure market. The new theme parks are destined to make Dubai the largest multi-themed entertainment destination in the Middle East. Having three billion people living within a fourhour flight of the UAE, there is a significant gap in this market for a world-class family leisure and entertainment destination, which is what Dubai Parks and Resorts, and IMG Worlds Of Adventure, have successfully achieved since their opening.” The fact that India is the number one source market for inbound visitors to Dubai is something that has excited the mighty Mahindra Holidays Group, especially the new vision for Dubai as a family destination.

DIANA JARMALAITE Euromonitor International

GEORGE RAHAL Regional Manager, RCI Middle East


Themed attractions, including Bollywood Parks Dubai, are set to transform the Emirate into a hub for family entertainment.

ARGAWAL PANKAJ Head of Customer Acquisition, Club Mahindra

PANOS LOUPASIS VP of Development, Wyndham Hotel Group

Star Ratings’ Review Dubai earned its crown as a luxury five-star vacation destination and is home to the world’s only seven-star hotel. During the boom years, increasing numbers of fabulous hotels went up, and revenue per available room (RevPAR) came down as a result of oversupply. “There is a shortage of low- and mid-priced accommodation,” said Jarmalaite. “Five-star accounts for 17 per cent of hotels in Dubai, and they have 32 per cent of all rooms - so that’s a third of all accommodation in Dubai. While 23 per cent are four-star. So over half of Dubai’s accommodation is in the luxury segment. Now that many tourists are more concerned about spending, the five-star suppliers are feeling the impact and we have seen a plethora of special offers and discounted promotions from them.” She believes the government has learned its lesson well, and welcomes the opening of the theme parks, together with the new direction as a family destination,

STAY & P L AY I N D U B A I Dubai will be to the east, what Orlando is to the west in terms of a family vacation destination. 2016 saw Dubai open the doors to several fabulous new theme parks – among them some world firsts - with more to come. IMG Worlds Of Adventure An area in excess of 1.5 million square feet with the capacity to welcome more than 20,000 guests a day. It features a unique array of adrenaline-pumping roller coasters, thrill rides and attractions based on popular Cartoon Network characters and iconic Marvel Super Heroes. Additionally, it houses a variety of themed retail stores, exclusive dining venues, and a 12-screen state-of-theart cinema. Opened in 2016. Dubai Parks and Resorts A US$3.7 billion integrated theme park destination housing: Motiongate Dubai - A theme park showcasing Hollywood’s best-loved characters and uniting three leading studios: DreamWorks Animation, Sony Pictures Studios and Lionsgate. Opened in 2016. Bollywood Parks Dubai – The first-ever Bollywood-themed park in the world, providing guests with attractions and experiences based on the Bollywood blockbusters and Indian culture through immersive rides, food, live performances and entertainment. Also features 20 live shows across five different stages. Opened in 2016. Dubai Water Canal A 3.2 kilometre waterway which crosses Business Bay to Safa Park, and terminates at the Jumeirah Beach Park. Landmark architecture and a sophisticated waterfront area, combined with jogging and cycling tracks, marine transit services and much more are expected to attract more than 30 million tourists as part of the Vision 2020 project. Opened in 2016. Riverland Dubai A retail and dining complex to connect the entire Dubai Parks destination, which is free for all to enjoy. Visitors can stay at the Lapita Hotel, a Polynesian-themed family hotel and part of the Marriott Autograph Collection. Opened in 2016. Legoland Park and Legoland Water Park The region’s first theme park catering for children as young as two years old. It will feature over 40 interactive rides and 15,000 Lego models made from more than 60 million Lego bricks. Opens in 2019. Six Flags Dubai The destination’s fourth theme park, is expected to open late 2019.

R CI VEN TURES 1 7

IN DEVELOPMENT

BOLLYWOOD DREAMS:

Argawal Pankaj, Head of Customer Acquisition for the shared-vacation ownership arm of the group, Club Mahindra, commented: “Dubai is just a three-hour flight from India which makes it a travel favourite with Indian vacationers. Now it is opening up many theme parks and new vacation experiences, particularly the world’s first Bollywood Park, it will be of great interest to Indian families, and to Club Mahindra members.” Pankaj believes that with the easing of the visa process for Indian tourists into Dubai, now taking only two days, together with the cultural affinity between Dubai and India, there will be a continued rise in Indian visitor numbers. Euromonitor International’s Diana Jarmalaite points out the advantage Dubai enjoys in terms of the Indian market as being “the large number of Indian expats who live and work in Dubai”. Unsurprisingly Jarmalaite lists Dubai’s neighbours as being crucial source markets, namely Saudi Arabia, and Oman, saying that it is the entertainment options, as much as shared cultural preferences, that attracts visitors from neighbouring Emirates to Dubai. “In terms of inbound visitors in 2016 India led the way,” she confirmed. “Followed by Saudi, the UK, Oman and Pakistan. Russian visitor numbers are presently in decline following the fall in the value of the Ruble, and it is expected UK visitors may also go into decline with currency fluctuations following Brexit. “However, we saw a 15 per cent increase in Chinese visitors last year, largely driven by an agreement with the Dubai Government waiving visa requirements for them. Visitors from Pakistan rose by 18 per cent in 2016. I believe these trends will continue this year.” Though the theme parks are welcomed by Jarmalaite as a positive growth strategy, she maintains that Dubai’s reputation as a shopping destination will also remain key. “With flagship brands and access to every designer store you could want in a duty-free luxury shopping zone, Dubai as a world-class shopping destination is a trend profile that we do not expect to change. Though visitors are becoming more budget-conscious with the currency changes and economic developments in their own countries,” she added.


TO U R I S M TO D U B A I 2011

2012

2013

2014

2015

IN DEVELOPMENT

2016

2017

2018

2019

2020

9,910,000 10,940,000 12,180,000 13,200,000 14,260,000 15,194,030 16,212,030 17,340,390 18,557,680 20,005,180 INBOUND TRIPS

which will drive the opening of the lower and midpriced hotels. “The revised tourism strategy will drive growth in Dubai. It was very limiting to restrict it as a luxury destination.” WHG is already working on filling the mid-price gap in the market. Loupasis explained: “The most notable opportunity lies with the economy and mid-scale sectors, making Dubai even more attractive to markets such as India and China. This is in line with the government’s target of 25 million visitors by 2020 when the Emirate hosts the global trade fair, Expo 2020, which will drive an increase in the supply of mid-priced accommodation.” Club Mahindra’s Pankaj agrees. “When our members travel to Dubai, they seek quality accommodation which provides them with the basic modern amenities to cater for the requirements of an Indian family. The focus is on finding the perfect location which allows them to experience all the attractions of the destination to its fullest.” Mahindra’s Arabian Dreams hotel in Dubai has not been impacted by the oversupply situation, enjoying a year-round occupancy of 88 per cent, Pankaj told RCI Ventures. He attributes the consistently high occupancy levels to the healthy flow of visitors from India, plus his timeshare-owning customers have access to mid-priced, value, accommodation at Arabian Dreams, expecting to pay US$900 per week - sold in 25-year use periods of ownership. “Our marketing is focused, targeting the one nationality, while our Happy Family Referral incentive programme generates 40 per cent of our sales,” he said. “We are looking at signing a deal on a second property in Dubai in three months’ time, with plans to allocate up to 70 per cent of the accommodation to timeshare product. It will be a family-orientated development, with restaurants, and situated close to the centre and its many attractions, because location is everything.” Pankaj has recently extended his marketing and sales strategy to tap into the African market - East Africa, Kenya and Uganda. “Dubai is the second favourite destination for people in those markets, after London,” he said. “We are using local people in those sales teams and, because English is widely spoken, we are able to produce our sales materials in the one language – English.” Euromonitor’s Jarmalaite sees the opportunity in Dubai – and views the accommodation situation as its Achilles’ heel. She explained: “Hotels are encouraged to negotiate with travel agencies, so agencies are now turning to flight suppliers to put together affordable package holidays. Accommodation is the greatest expense in Dubai. “Shared-vacation ownership is certainly an affordable option and an alternative way of getting tourists in to the Emirate. A number of units will be required to be available as rentals, as per the government’s plan. However, second homes are very popular in Dubai and home sharing is a good way to fill the mid- to low-price accommodation gap.” Wyndham Hotel Group is also exploring a variety of options, with mixed-use having great potential. “Mixed-use developments typically blend hospitality, residential, commercial, retail and entertainment uses.


IN DEVELOPMENT

LAND OF OPPORTUNITY:

Hotel brands, including Wyndham and Mahindra, are filling the gaps in the value accomodation sector. Pictured: Wyndham Dubai Marina (left) and Arabian dreams Hotel (above).

They can take the form of a single building, a block, or entire neighbourhoods,” said Loupasis. “It is found in Dubai in all its forms. Enhanced accessibility, transport, connectivity and convenience, together with ‘green’ applications, have become buzz words driving the design of such developments. Developers are being ‘forced’ to review and enhance their product in an effort to increase market share.” Shared-Vacation Ownership The shared-vacation ownership sector of the hospitality market has faced challenges in gaining any real traction and fulfilling its potential in this vibrant vacation destination. If you speak with those who have been in the industry for some years, they will tell you that the industry has been hindered by the lack of any regulation and legislative structure. For investors to have confidence in a market, they need to be reassured that there is an established and professional legal and regulatory infrastructure in place to safeguard their capital investment, their customers and guests, and ultimately, the reputation of the industry and their brand within it. In recognition of the untapped opportunity in this market, a new law governing the shared-vacation ownership industry in all its many and varied models is being implemented this year. Work on drafting the new law began in earnest in June last year and the new legislation should be in place by May this year.

We are planning to establish Dubai as the first destination for Asian tourists. – HIS HIGHNESS SHEIKH HAMDAN BIN MOHAMMED BIN RASHID AL MAKTOUM, Crown Prince of Dubai

George Rahal, RCI’s Regional Manager for the Middle East, has had a hand in shaping the new legislation. “There were issues with major holiday companies expanding their product in Dubai and anything that gets in the way of the Ruler’s plans for the diversification of the economy, and the growth of the tourism sector in particular, needs addressing. There is a focus in Dubai on preparing for the hosting of Expo 2020 and this has played its part in putting the issue of the lack of regulation into the spotlight, gaining government acceptance that something needed to be done,” said Rahal. The new law will embrace the set up and operation of differing models, including vacation clubs and marketing companies. The industry has been invited to participate in educating the law makers as to the workings of the product and feeding back to them on the draft legislation. Rahal says RCI and its legal team have been involved in this project for two years, participating in an industry focus group with other established players. R CI VEN TURES 1 9


IN DEVELOPMENT

“The tourism authorities have come to see timeshare as a good way of moving some of the room oversupply in the market with a part to play in the Vision 2020 solution,” he said. ‘In a slow market, timeshare is the perfect product to help cover costs, raising both revenue and investment capital.” The new legislation will undoubtedly open the doors of this market to the big hotel and resort developer brands. Many in the industry have long attributed the reluctance of the big brands to enter the market in Dubai to the lack of any legislative structure to give shared-vacation ownership the opportunity to be a game changer, for both the Emirate and those operating in its hospitality sector. Although current draft law grants timeshare licences. “Why is the time now for timeshare in Dubai?” asked Rahal. His answer: “Because with the Ruler’s vision comes opportunity. You cannot ignore the numbers. The new theme parks and family attractions will create one of the world’s biggest family holiday destinations, bringing tourists to Dubai in their millions.” Rahal reports a lot of interest in Dubai and the wider region from RCI affiliates and associates. “We are currently dealing with four or five rental teams and several affiliates in sales in Dubai and Abu Dhabi,” he said. ‘Towards the end of this year one of our existing affiliates plans to launch a big club product. “About a year ago, RCI started working with the Wyndham Hotel Group in Dubai. It is a strong

A R A B I A N FA LCO N H O L I DAYS O N THE TIMESHARE MARKET IN DUBAI

MOHANNAD SHARAFUDDIN Founder, Arabian Falcon Holidays

Arabian Falcon Holidays was established in 1999 in Dubai. It is, today, the largest independent timeshare sales and marketing company in the Middle East. It was the exclusive sales agent for Dubai’s first vacation ownership resort, the Royal Club at Palm Jumeirah. Its team of nearly 100 sales professionals now has an international reach. Mohannad Sharafuddin, Founder of Arabian Falcon Holidays, commenting on the market said: “Dubai is forecast to witness an exponential growth in its timeshare market this year, set to surpass the annual average growth rates of 15 to 20 per cent. We expect 2017 will witness 50 per cent growth, driven by new tourist attractions, such as the theme parks. “Adding a mere five per cent conversion of the Emirate’s 100,000 hotel rooms and serviced apartments will result in AED18 billion (US$5 billion) in sales volume. The market is awaiting new regulations and we believe, once they are announced, the timeshare sector will grow further and will be an important factor in helping to attract more than 25 million tourists to Dubai by 2020. Beach resorts and luxury resorts in Dubai, as well as across the UAE, are the preferred choice of tourists, but we do believe golf resorts will be something that visitors might be looking for in the future.”


G E O G R A P H I C S O U R C E S O F TO U R I S M TO D U B A I

R U SS I A , C I S , E A ST E R N E U R O P E

6%

W E ST E R N EUROPE AMERICAS

6%

NORTH & SOUTHE A ST A S I A

21%

6%

G CC

MENA

11%

24%

SOUTH ASIA

17%

5%

AUSTRALASIA

2%

Source: Tourism Statistics & Reporting - Department of Tourism and Commerce Marketing - Dubai. Percentages based on figures rounded to nearest whole number.

ROOM FOR NEW VIEWS:

New timeshare legislation will open the doors to big brands in hospitality. Pictured: Ramada Plaza Jumeirah Beach Residence, already operating in Dubai.

partnership enabling us to combine the expertise and services of both business units to provide turnkey solutions. Broadly speaking, we introduce our affiliates to the hotel management services of Wyndham, while the hotel group brings its hotel management services to our timeshare developers. Given the proliferation of the mixed-use product, this is a valuable and unique service to bring to the market at this time.” Wyndham’s Loupasis added: “Shared-vacation ownership is still an emerging sector in Dubai. However, Dubai now has all the tools to become a fast-growing member of the timeshare market. We look forward to a significant increase in visitor numbers with the diversification of its leisure offering, the latest development being the entertainment parks, plus it enjoys strong real estate prices, a safe environment and a good quality of life. “We welcome the newly introduced regulatory structures, as they will bring further transparency, structure and therefore new business to this up-andcoming sector in Dubai.” Rahal believes Dubai’s transformation into a family vacation destination, together with the new legislation, will bring a new dimension to an already popular shopping and business hub. Mahindra’s Pankaj agrees, commenting: “We will be happy to see some industry legislation in Dubai; it will be better for business in our industry. Although we have not been impacted significantly from the lack of regulation, having set

up Mahindra’s sales and contracting outside Dubai in compliance with the current requirements.” Mahindra has sales offices in Abu Dhabi, Qatar, Oman, Kuwait, Riyadh and, for the past eight months, in Kenya and Tanzania where the company works in alliance with a local partner. The group has plans for the UAE in light of the new legislation affording it greater business freedoms. Pankaj explained: “We are exploring the option of operating a new ‘pay-as-you-use’ model in Oman. Leveraging new technologies, we are also looking to open Mahindra Holiday Experience Centres in the shopping malls which will allow potential purchasers to have a ‘virtual experience’ of what it feels like to holiday with Mahindra.” Key to the equation for success in Dubai is the presence of professional marketers. Many resort developers, new to the business, lack the understanding and experience of timeshare to be confident in taking on the marketing and sales operation. RCI works with marketers, Arabian Falcon Holidays, in Dubai and it is a relationship that is working very successfully. “As Dubai becomes a global entertainment centre and the new law creates a business environment industry investors feel comfortable operating in, it is important that we have marketers, such as Arabian Falcon, which are experienced in the shared-vacation ownership sector. “There will be a lot of new business for professional timeshare sales and marketing companies in this region in the future.” R CI VEN TURES 2 1

IN DEVELOPMENT

AFRICA


Georgia – On The Tourist Map IN DEVELOPMENT

Just when you think there can’t be a resort-development stone left unturned – you find one. AKAKI SONGULIA is putting Alliance Group funding into what is estimated to be a US$5.54 billion residential leisure real estate market in Georgia. BY HELEN FOSTER

NOT TO BE CONFUSED WITH THE US STATE of the same name, Georgia is an independent country, having gained its sovereignty from Russia in 1991 and, with a footprint of 69,700 square kilometres, it is also the 122nd largest nation in terms of land. For those with an interest in hospitality and leisure real estate investments, it is important to know that, according to a 2016 International Visitors’ Report from the Georgian National Tourism Administration (GNTA), international arrivals to Georgia have been growing year on year. In 2011 the inbound visitor figure was 2.8 million and, in 2015, that number had risen to almost six million 2 2 Q 1 /Q 2 2 01 7

representing a growth of 225 per cent. Revenues from international tourism receipts, as reported by the GNTA, exceeded US$2 billion in 2016, that is an average growth of 210 per cent since 2011. It is little wonder then that the GNTA participated in 26 tourism fairs in 2015, while working with other authorities across the country to improve tourism infrastructure. Tourism in Georgia, as in so many countries today, is the goose that lays the golden national revenue eggs – tourism receipts made up 6.7 per cent of the country’s Gross Domestic Product (GDP) and it is easy to see how it could be more in the future.

IN THE SPOTLIGHT:

Developments such as Alliance Palace in Batumi are set to put the little-known country of Georgia on the tourism map.


– AKAKI SONGULIA

Carpe Diem One of the country’s leading real estate investors, Alliance Group, was first to market in Georgia with a quality residential leisure accommodation product. During the last 11 years, Alliance Group - co-founded by CEO Akaki Songulia - has built more than 20 large-scale projects comprising over 5,000 apartments and, in 2008, it introduced the first aparthotel concept to Georgia. It is now managing three game-changing projects for the country’s tourism sector: Alliance Palace in Batumi – first six floors to be Courtyard by Marriott; Alliance Resort in Goderdzi – to feature a Ramada hotel; Premium

R CI VEN TU RES 2 3

IN DEVELOPMENT

I believe the incentives afforded by the Georgian Government are good news for resort developers, investors and visitors to our country.

Complex in Tbilisi – to house premium-class residential apartments in a 40-storey tower, and two 33- and 27-storey developments with an aparthotel and full-service luxury hotel carrying a renowned international brand badge. Tbilisi is the country’s capital and, in the developer’s words, the Alliance Premium Complex is set “to change everything”. The first two Alliance resorts are to be built in Adjara and will be open in 2018, while the capital project opens in 2019. “The Tbilisi development will be a capital landmark and will bring a great new international brand into the Georgian market. It will turn the central district of Vake into a new tourism hub. The location of this resort is of great value to the project,” he added. As a chess player and Georgia’s several-time chess champion, Songulia knows the value of looking well ahead to your next move. And, as a former public servant, heading up the Revenue Service in western Georgia, when the country introduced liberal reforms to open its first Customs Clearance Zones, he has a full appreciation of where today’s government wants to take Georgia. “It is the right choice to make Georgia attractive as a regional tourism hub, so reforms are aimed at that grand mission,” he said. It is the increasingly open and business-friendly environment that is attracting overseas investors and beginning to draw in the big names from the international hospitality sector. “The country ranks 16th as the best for doing business in, out of 190 in the ‘Doing Business 2017’ report. This is a big thing for Georgia,” he explained. “The country has a simple and modern tax system with some of the lowest tax rates in Europe. Businesses feel secure here. Gallup has just declared Georgia to be one of the safest countries in Europe. An improved business environment means better conditions for all sectors, including tourism in which we are now seeing impressive growth.” Sitting at the crossroads of western Asia and eastern Europe, the country has a Black Sea coast and neighbours Russia in the north, Turkey and Armenia in the south, and Azerbaijan in the southeast. As a member of the United Nations, the Council of Europe and the World Trade Organisation, among other such bodies, Georgia is part of an extensive European and international community enjoying political stability, as well as having an established legal and regulatory structure. All of this adds up to opportunity for the hospitality and shared-vacation ownership industries. There are more than 100 resorts already in operation in the country and, bordering many countries with wealthy aspirational populations, Georgia represents a genuine tourism development opportunity for savvy investors such as Songulia. Recent increases in inbound visitors from Lithuania, Latvia, Czech Republic, Bulgaria and Germany is just the beginning of the emergence of this country as a tourism force to be reckoned with. Visitors from Iran have increased by more than 400 per cent last year, from India by nearly 200 per cent and from Saudi Arabia by 116 per cent. “One reason for such dynamic growth in international tourism is our country’s liberal policies,” explained Songulia, “particularly regarding visa regimes.


afforded by the Georgian Government are good news for resort developers, investors and visitors to our country,” he added.

AKAKI SONGULIA

IN DEVELOPMENT

CEO Alliance Group.

Citizens of up to 100 countries may enter Georgia without a visa, while for short-term visitors needing a visa, the Ministry of Foreign Affairs operates an e-visa portal or visas are handed out right at the border.” As an investor and operator in the hospitality sector, Songulia is also benefiting from government support in the construction and running of his group’s developments. He said: “The Government of Georgia is pro-business, offering interested investors unprecedented terms for the construction of hotels in specially allocated zones, including exemption from taxes on land and property purchase, as well as on operational profit, for 10 years. Casino licences are free to hotels having more than 100 rooms, as is electricity, water, gas and sewage services – all being funded by the government.” Further financial help is at hand in the form of the co-financing of bank credits for three years and a stateowned Partnership Fund, also providing co-financing options for tourism resort and property developers. For Georgian companies operating in the hospitality sector and willing to bring international brands to the Georgian market, the government will finance any franchise fees, while owners can get residence permits on demand for themselves and their families. There is a simple business registration process to be undertaken at the National Agency of Public Registry, which takes only minutes, as opposed to days, weeks, and months. Importantly, there are no restrictions on the amount of capital foreign investors want to bring into the country, or on how much they spend here. “I believe the incentives

Shared Opportunities The Alliance Group recently founded the Alliance Privilege Club, a shared-vacation ownership product. Songulia and his team turned to RCI to investigate several business models and their application in maximising the return on asset investment. The two companies are now in negotiations for a proposed agreement that will be another first for Georgia, in bringing an international vacation exchange hospitality product into the country. “We were the first to build a modern residential complex in 2005 in Batumi, Georgia; first to combine an aparthotel with a renowned international hotel in 2015,” said Songulia. “Alliance Group has always been a pioneer and an innovator. We drive success, with business strategies aligned to the country’s tourism development

progress. Georgia’s hospitality market is more than ready to take on global challenge and shared-vacation ownership is the next right move for our market. “When we finalise our agreement with RCI, the world’s largest vacation exchange services provider with more than 4,000 affiliated resorts in its exchange programme and

INTERNATIONAL ARRIVALS BY REGION REGION

2014

2015

CHANGE

% CHANGE

Total

5,515,559

5,901,094

385,535

7%

Europe

5,354,633

5,723,434

368,801

6.9%

Americas

34,631

38,698

4,067

11.7%

East Asia/Pacific

81,303

73,548

-7,755

-9.5%

Africa

4,109

4,411

302

7.3%

Middle East

38,764

56,682

17,918

46.2%

SOURCE: The Ministry of Internal Affairs of Georgia.

24 Q 1 /Q 2 2 01 7

REACHING NEW HEIGHTS:

Alliance Group funding in leisure real estate in Georgia is bringing new opportunities for sharedownership.


254

5

O

21%

ROOMS 11-20

56

128

28%

Guria

Mtskheta-Mtianeti

140

Samegrelo-Upper Svaneti

141

156

201

Imereti

6-10 ROOMS

Kakheti

ACCOMMODATION UNITS BY NUMBER OF ROOMS

Samtskhe-Javakheti

% 16

% 35

Adjara

MS ROO ER W FE

Tbilisi

R

MS ROO RE O M

R

21 O

314

NUMBER OF ACCOMMODATION UNITS

SOURCE: Georgian National Tourism Administration.

Songulia, ever his country’s public servant, concluded: “Shared-vacation ownership is going to be an excellent promotional tool for tourism in our country. I am happy to see that the Georgian Government fully appreciates the value of tourism and is supporting the development of such innovative concepts.”

15-17

5.1%

10.1%

7.8%

13.4%

18.9%

24.2%

20.4%

HOLIDAY VISITOR AGE GROUPS

18-24

25-34

35-44

45-54

55-64

65+

SOURCE: National Statistics Office of Georgia.

About Alliance Group Founded in 2005, the company has invested US$200 million in Georgia’s real estate sector. In addition to the building and development of resort properties, Alliance Group also takes on hotel management. In the Adjara region it owns and manages a boutique hotel, Gonio Inn; it has also brought international hotel brands into its mixed-use developments, and has been awarded the management contracts by brands such as Sophos Hotels, which is a Swiss company working with the Wyndham, Marriott, Hilton, InterContinental and Accor hotel groups, among others. The majority of the company’s clients are overseas investors.

R CI VEN TURES 2 5

IN DEVELOPMENT

3.8 million members, the vacation exchange company will add Georgia to its own destination map. Such a move has the potential to transform the vacation industry of a small but fabulous country. “Georgian citizens will have the opportunity to enjoy the unique lifestyle benefits of shared-holiday ownerships starting in the summer of 2017.” With its varied climate, ranging between sub-tropical and continental, together with a rich culture borne out of its antiquity and many tourist attractions set in a spectacular and scenic landscape of mountains and coastal regions, Georgia has all the ingredients of a world-class vacation destination. Add to that a starting price point of $4,500 to purchase a 15-year ownership at the Alliance Privilege Club, and there are many persuasive reasons for vacationers in both the domestic and overseas markets to buy into the new Alliance Group product. “Working with RCI in the future and bringing sharedownership vacation exchange into our product portfolio is the perfect complement to our group’s expansion into the wider leisure real estate sector,” Songulia said. In explaining the attraction of shared-vacation ownership for him and his group, he said: “For me it’s the same thing that has been attracting RCI’s 3.8 million member families worldwide, and that is the concept of an affordable, flexible and high-quality vacation experience.”


SMALL STEPS, BIG GAINS

IN DEPTH

East Emerging All eyes are firmly focussed on Turkey and the Commonwealth of Independent States as hot spots for hospitality and timeshare growth. As new players enter the market, the need for regulation and its enforcement will be paramount for success. BY LO R R A I N E K A R A B I N

2 6 Q 1 /Q 2 2 01 7


SPOTLIGHT ON TURKEY With attractive beach resorts and a unique cultural identity, Turkey has long been a popular sun, sea and sand destination. Of course, with tourists come

The support of local governments, authorities, timeshare professionals and investors will be absolutely vital for us to secure a long-term future for the industry. – TURABI ÇELEBI, CEO, Doğan Geothermal Group

ALI EGILMEZ

CEO, Doğan Geothermal Group

RCI Affiliate Services Manager

opportunities. Shared-vacation ownership properties have provided families with a flexible way to holiday for many years in Turkey. More recently, thermal resorts have also been growing in appeal for domestic tourists, giving investors an alternative investment option. With various shared-vacation ownership products on the market, the industry has become fragmented, which has proven problematic in stimulating new investment and development. “These disadvantaged market conditions create a need for regulations which support industry stakeholders and consumers,” advised Ali Egilmez, RCI Affiliate Services Manager. The Timeshare Ownership and Timeshare Vacationship Entrepreneurs’ and Marketers’ Association is set to unite all industry stakeholders with a common voice for shared ownership. A Platform For Professionals The industry has recognised the need for timeshare developers and professionals to be better organised. Set up in 2009, the Timeshare Ownership and Timeshare Vacationship Enterpreneurs’ and Marketers’ Association (Devremülk ile Devre Tatil Yatırımcıları ve Pazarlamacıları Derneği) was founded by Mehmet Ali Doğan, Chairman of Doğan Geothermal Group. The Turkish investor and resort developer is guiding development of the structure and management of the Association. Turabi Çelebi, CEO of the group, shares project details with RCI Ventures. He explained: “The Association acts as a consultation platform for developers and professionals on shared-ownership projects, investment options, site locations, resort management, sales and marketing, and consumer rights. “It represents professional interests, which is important for us if we are to improve industry standards, spark new investments and innovative ideas to drive the product forward. This is critical if our industry is to be considered a major part of the tourism market here in Turkey.” R CI VEN TURES 27

IN DEPTH

FOLLOWING UNPRECEDENTED growth since its founding in the 1970s, shared-vacation ownership today is more widely recognised as a mainstream hospitality product providing a lucrative route to market. With growth comes challenge. When we look at timeshare in North America and Europe, the need for collaboration remains vital in overcoming such challenges. The establishment of the American Resort Development Association (ARDA) and the Resort Development Organisation (RDO) has helped address key issues in providing the timeshare industry with a voice, and consumers with confidence. The upward trend in collaborative consumption reinforces the need for associations to educate and inform, which will continue to play an influential role in shaping industry growth across all regions. With strategic tourism plans to develop the domestic and international shared-ownership product in Turkey and the Commonwealth of Independent States (CIS), a professional regulatory infrastructure will be crucial to its success and growth. We shine the spotlight on the east, where two new timeshare industry bodies are preparing to build a professional environment in which developers and financial investors can operate with trust and confidence.

TURABI ÇELEBI


IN DEPTH

Think Global, Act Local While still in its earliest stages of development, thermal developers and other key industry stakeholders, including RCI, will be invited to participate in building the new structure and setting objectives for the Association in the coming months. Egilmez believes the Association will bring more cohesion to the industry. He said: “Adopting a ‘think global, act local’ mindset will drive more streamlined regulations to consider a broader range of factors, from legislation to consumer protection. This will create a more favourable environment for investors.” The trade body is revising laws and regulations to fit an international framework, with cooperation from government bodies, to further protect consumers and stakeholders in the timeshare industry. New laws should be in place by the close of this year. “The support of local governments, authorities, timeshare professionals and investors will be absolutely vital for us to secure a long-term future for the industry,” adds Çelebi. The organisation is also looking at sharedownership models in the US and Europe to help develop the product in Turkey, from sales to investment. “Mixed-use timeshare and condo-hotel resorts are more developed in the US. We need guidance for a better financial model, similar to the US industry, to support investment in the timeshare business in Turkey,” said Çelebi. Activation Is Key Member activation and support will be key to the Association’s future (only 54 out of the 90 Association members are currently active), following economic and political setbacks which have hindered growth. “We have to give our members guidance and governance, as it’s the only way we can work together to overcome the challenges we face,” Çelebi added. “A united voice will help us to increase awareness and strengthen the timeshare business in Turkey. This is why we must increase membership of the Association through industry events and workshops.” Egilmez said: “A large proportion of membership will be developers who are part of the RCI Turkey Thermal exchange programme, which has already fostered more understanding between developers.” Following a growth in thermal resorts in the region, the Turkey Thermal Programme was established by RCI to deliver an exclusive exchange programme for thermal resort developers. “The exchange programme embraces all 2 8 Q 1 /Q 2 2 01 7

thermal resort developers, but through the new Association, they will have a forum with access to advice and guidance from a variety of industry professionals, as well as access to international markets,” said Egilmez. Looking To The Future “Awareness, education and advice around our objectives will help our members understand the value of the improvements we intend to make and how they can input to the future growth of timeshare in Turkey, and beyond,” said Çelebi. Supporting future development growth, the Association’s new structure has been perfectly timed with the government’s Thermal Tourism Strategic Plan 2023 featuring plans for a 500,000-thermal tourism bed capacity. Over the next 20 years, the CEO predicts exponential growth of shared-vacation ownership products in Turkey. He said: “With visionary and transparent entrepreneurs at its helm, supported by professionals and investors, it won’t be long before international hotel chain brands enter and grow the timeshare business in Turkey.” Due to current economic and political conditions in the region, the new structure of the Association will take some time to establish. In April, thermal timeshare developers in the region will gather in Istanbul to discuss and implement the new updates and framework for the organisation. Set to serve the interests of both investors and consumers in the long term – the Association’s contribution to timeshare growth in Turkey will be one to watch. SPOTLIGHT ON RUSSIA With an active timeshare market for many years now, the lack of legal framework and controlled conditions in the CIS was hindering growth via new entrants into the market. “Domestic tourism is booming right now due to current political and economic conditions,” said Sergey Egorov, Director of Development Russia and CIS for RCI, and Wyndham Hotel Group. “This creates an opportunity for us to focus on our domestic offering in the CIS. These regions have so much to offer holidaymakers, from beach and ski to culture and wellness.”

For us all to succeed, we must set the standards and all play by the same rules. – VLADIMIR SUCEVAN, Chief Operating Officer, Absolute World Group

T H E FAC T S & S TAT S

TURKEY 200 Number of thermal resorts

54,000 Total licensed bed capacity in thermal tourism

7 million Domestic tourists using thermal facilities annually

1 million Foreign tourists visiting thermal resorts annually

US$2.3 billion The total investment in timeshare

26,000 The number of employees/ professionals working in timeshare

41,391,000 Estimated international tourist arrivals for 2016*

81,385,000 Forecasted international tourist arrivals for 2026*

THE CIS 27,423,000 Estimated international tourist arrivals for 2015**

52,279,000 Forecasted international tourist arrivals for 2025**

* WTTC Report 2016 ** WTTC Report 2015


To develop the shared-ownership vacation product, establishing an association is a critical step to lobby the authorities in the CIS and drive the creation of the right regulatory environment for the industry which will succeed in fuelling investment in the east.

Building The Right Team This isn’t Sucevan’s first time establishing a timeshare trade body. Absolute World Group were co-founders of the Thai Vacation Ownership Association in 1999. “As we found in Thailand, collaboration is key. We have received overwhelming support from stakeholders in the industry including RCI, ARDA and RDO which has helped us move forward.

VLADIMIR SUCEVAN

Director of Development, Russia & CIS, RCI & Wyndham Hotel Group

Chief Operating Officer, Absolute World Group

“I’ve worked in the European shared-vacation ownership industry for more than 20 years. It’s clear that the issues such as consumer protection and sales education, felt back then, are exactly the same things we are dealing with in the CIS today. “Of course having industry advocates out on the ground in the CIS is crucial to gain further interest and positive PR. With legitimate sales we can secure our future – without sales, we would have nothing.” On To A League Of Dreams “Over the last few years I believe we’ve only scratched the surface of tourism in the CIS. This presents vast possibilities to stimulate new investment and development in these rich and varied nations,” he explained. “Within Russia, there is potential in Sochi, Anapa, Gelendzhik, the Sea of Azov as well as beaches of the Crimean Peninsula. “Further afield Kazakhstan, Azerbaijan, Georgia, Ukraine and Moldova are also showing signs of real potential for shared-ownership development. “It’s a journey that will take time, but with education and awareness we can reinforce the message that we’re about sending people on great holidays.” So what does the future hold? The Association is currently negotiating the operating framework, including a constitution and code of ethics. Egorov added: “This won’t all happen overnight but we hope to have the framework agreed with the group by the end of Q1 2017.” The future already looks encouraging for shared ownership as the formation of the Association continues to build momentum. The plans will be presented to government and the local tourist authorities, who are looking to boost the region’s domestic tourism. The launch of the Association and growth plans for the shared-vacation ownership product in the CIS couldn’t come at a better time. And with buy-in from the region’s resort developers, plus pipeline events to showcase timeshare in the region, the rewards of new opportunities will soon be ripe for the picking. R CI VEN TU RES 2 9

IN DEPTH

Levelling The Playing Field The Russian Vacation Ownership Association (a working title at this stage) will represent the timeshare industry interests for the region. Still in the early stages of development, a working group of eight people has been established, covering a diverse range of backgrounds, from marketing to legislation. “For us all to succeed, we must set the standards and all play by the same rules. By organising the industry in this way we can showcase it in the CIS as a legitimate sharedvacation ownership product which is worth investing in,” said Vladimir Sucevan, Chief Operating Officer of Absolute World Group. Currently working through the terms of the Association, both Egorov and Sucevan predict some interesting times around the debate of enforcement of a code of ethics. “We don’t want the association to act as ‘the police’ but we must establish ground rules to be respected without needing to monitor business practices,” advised Egorov. Sucevan adds: “During our initial talks with various stakeholders, there were some differences of opinion - even down to the need to have an association at all! But this was a productive forum to start building trust and cohesion.” Sucevan believes that ground rules will be imperative to enforce and govern the sharedvacation ownership industry, particularly in the arena of sales and consumer protection. “It won’t be easy to set the standards. Naturally some people don’t like change and won’t agree to everything we propose. But we need a visionary approach for the long term, and on an international scale too,” he said. “Despite some dark moments in the industry’s past, we want to show the authorities how we believe the shared-vacation ownership playing field should operate. “Creating a fair and level landscape will secure the peace of mind for consumers, developers and investors alike, as well as government, so it is a win-win for us all.”

SERGEY EGOROV


IN DEPTH

Social Media Masterclass With social media usage continuing to grow year on year, the emphasis is no longer on just ‘doing’ social media - simply being at the party is not enough. RCI Ventures discusses the importance of integrating social media into your core marketing strategy, with JOHN BECKLEY and JONATHAN SAIPE.

JOHN BECKLEY Digital Marketing Specialist

BY LEIGH CONNELLY

JOHN BECKLEY HAS BEEN WORKING WITH the Pearly Grey Ocean Club in Costa Adeje, Tenerife, for more than a decade, having set up the resort’s Twitter account in the same week the platform launched publicly, in July 2006. In December 2016, the resort was presented in Brussels to the European Parliament, as a Case Study for Digital Transformation. From the start, Beckley was enthusiastic and excited about the potential of social media marketing. However, the resort’s owner, James Beckley, also John’s brother, 30 Q 1 /Q 2 2 01 7

had reservations. “James was initially a little unsure about the resort having a social media presence. This was due to a fear of negative comments and feedback, which he thought could be detrimental to the brand,” said Beckley. However, this was not the case, and Beckley emphasises that clarity and openness will ensure your brand’s social pages do not become a breeding ground for negativity. “Of course, we receive some negative comments,” he said, “but we do not hide or delete them. We have only ever deleted two comments, one which used foul

JONATHAN SAIPE Founder of Emarketeers


IN DEPTH

language, and one from an ex-employee. A comment is never the end of the world, it is how a brand deals with any kind of negativity that gives users a real perception of the brand. In our case, other members of our online community will often counteract negative postings for us, defending the resort, as the community we have cultivated is so positive.” Beckley also commented on a further objection which some resort owners have: “When I’ve spoken to other timeshare resorts, to encourage them to increase their social media efforts, I’m often met with the objection that their owners and guests won’t be on social media. While this may have been the case a few years back, it certainly isn’t now. I’ve witnessed guests over 70, even 80 years old, asking me which hashtag to use when posting their images on our Instagram page.” Jonathan Saipe is the founder of Emarketeers (emarketeers.com), the UK’s largest independent provider of digital marketing training and consulting. We asked what advice he would give a client who wasn’t utilising social media well, if at all. “What I have witnessed, many times, is brands exhibiting knee-jerk reactions and posting content without a strategic framework underpinning it. Social media platforms make it very easy to do this,” he said.

“My top piece of advice would be strategy before tactics. Think of your audience, plan your objectives and KPIs and have the software and tools in place to measure and benchmark success. It is also very important to make sure that all social media strategy and activity is not being worked on in silo, but forms part of the overall marketing strategy.” Times Are A Changing The digital world, including social media, is moving at such a rate it can be difficult to keep up. We discussed short- and long-term changes within the social media landscape with Saipe. “For me, the evolution of the consumer’s voice is the most impactful long-term change,” he said. “The customer’s voice is immense, and there is nowhere for brands to hide anymore. Twitter, in particular, has become the first port of call for customer complaints. People won’t write companies letters, or wait in telephone queues anymore – when they can make instantaneous contact. “More recently, an important change was the reduction in Facebook’s organic reach. Brands’ posts now reach less people, rather than all of their followers, creating the need for companies to pay-for-clicks to boost R CI VEN TU RES 3 1


IN DEPTH

their posts. This is a result of the platform becoming a publicly listed company back in 2012, with the pressure to generate income prompting the pay-per-play era. Other platforms, such as Instagram and LinkedIn, were not far behind.” For Pearly Grey, Facebook has always been its primary social media channel. “Historically, most of our social media energies have gone into Facebook, as it’s such a powerful channel. However, the reduction in the organic reach of Facebook posts has encouraged us to reignite our efforts on other platforms, to avoid keeping all of our eggs in one basket.” With an array of social media platforms, brands need to choose wisely which to engage with. Both Saipe and Beckley advise that this is entirely dependent on brand image and which media offers the best way to connect with your audience. Saipe was also keen to point out that although many believe Facebook and Pinterest to be consumer-only platforms, “people are people and will engage across multiple platforms. I believe B2B communication can work well on these platforms too”. Strategy And Spontaneity As the landscape is so fast moving, striking a balance between planned and reactive activity is important. Saipe advises creating a content calendar, which is how Pearly Grey approaches its social media planning. “We plan one year ahead, anything further than that is fantasy,” said Beckley. “We structure the calendar by month of course, but also categorise it.” Beckley was particularly enthused about the creation of a food section on the Pearly Grey blog (pearlygrey.com/blog). “We have filmed 12 short videos, an example being a tutorial on cooking perfect Canarian potatoes. We can post these one a month, but essentially they are evergreen content, which can be used across a multitude of media, and which people will engage with. Creating content that is fresh and interesting is key.

Where some brands go wrong is by going into broadcasting and sales mode – losing the engagement of their online community as a result. We at Pearly Grey are not interested in numbers of followers – it’s all about engagement. We always want to make people say: ‘Wow, I wish I was there!’” With social media being so interwoven with people’s lives, it’s an unpredictable media. But how important is it to keep up with trends, and to post content spontaneously? Furthermore, does this pose any risk to the planned content? Beckley believes that it is important to take opportunities which provide good exposure for Pearly Grey, posting outside of scheduled content when necessary. “A great example was when a guest presented one of our reps with a thank you gift, for making her holiday so special. We grabbed the camera and snapped the happy guest – and posted the image on Facebook,” he said. This kind of spontaneous posting falls directly in line with Saipe’s advice. “It is important to be reactive, but all tactics should be underpinned by an overarching strategy. Whether your post is planned six months, or five minutes prior to posting, both should have the same tone of voice, and goal – be that leadership, entertainment or customer service.” Fad Or Fab? Occasionally a trend will go viral on social media, recent examples being the ice bucket, push-up, and mannequin challenges, and the no make-up selfie. Overnight, it seems like our feeds are full of the current trend, and most feel obligated to join in. Pearly Grey recently took part in the mannequin challenge, choosing an evening when the bar

A comment is never the end of the world, it is how a brand deals with any kind of negativity that gives users a real perception of the brand. – JOHN BECKLEY

A VERY SOCIAL RESORT: The Pearly Grey Ocean Club posts regularly on a number of social media channels.


and entertainment areas were full of guests having a great time. This worked excellently, as it highlighted a good level of guest interaction and showed a full bar of happy customers – in summary, it fitted perfectly with Beckley’s overall strategy. But Saipe is keen to point out that jumping on current trends isn’t always right for every brand. “Exercise extreme caution,” he said. “You don’t need to participate in everything, choose wisely what fits best.” Timing is also key with participation in any kind of trend. “If you want to take the opportunity to join in, do so quickly,” said Beckley. “The earlier you are a part of it, the better. Trends go viral and spiral overnight. No one wants to see your ice bucket challenge three months after everyone else has done it. It’s boring, and makes it evident that you are not on the beat.”

It is important to be reactive, but all tactics should be underpinned by an overarching strategy. – JONATHAN SAIPE

RCI Europe, Director of Product, Channel and Content.

H E R E AT R C I “Since launching our European Facebook page in 2015, we gained over 26,500 likes by the end of 2016. With an average daily reach of 19,000+ and a ‘positive sentiment’ rating of 97.6 per cent, we gain insight into what’s important to our members based on the comments they leave. “We currently support Facebook in English, but find strong engagement activity from Portuguese, Greek and Hungarian followers. “Our social pages are available to non-members, so we can raise RCI’s profile to anyone interested in travel. “Social marketing is embedded within our marketing strategy and we use paid-for Facebook adverts to target members. We also have a strong focus on sourcing user-generated content for campaigns from the comments, images and memories our followers leave on our posts. “Following the success of our Facebook activity, we have launched RCI Europe on Instagram and are currently updating our YouTube channel too.” TANYA LEE RCI Europe, Director of Product, Channel and Content.

R CI VEN TURES 3 3

IN DEPTH

TANYA LEE

Measuring Success Implementing new processes and strategy is aimless if success is not measurable – but often, as Beckley has highlighted, numbers of viewers and followers are not the best indicators. “We have daily and weekly tasks for each platform, and create lists of people, primarily owners and partners, who we want to engage with. It’s a lot of leg work, but we measure success by achieving connections with the right people.” Beckley also discussed a fantastic example of the direct, positive impact which social media has had for them as a resort, during a project which could potentially have caused problems with owners. Developers at Pearly Grey had plans to launch an ambitious refurbishment programme for its sea-view apartments. The concept behind the refurbishment was to upgrade these apartments to five-star quality, to match their five-star view. Unfortunately, this would result in an increase in maintenance fees for owners. Pearly Grey decided to manage the owners’ concerns via social media, posting on Facebook, explaining the plans and asking for feedback. A show apartment was then developed, and a video created featuring James Beckley in the apartment, both showcasing the new accommodation and answering the most common questions asked by owners on Facebook. Beckley believes that this approach accounts for the positive reactions to the project. “By the time the AGM came round, no one contested the development. The owners got behind the concept and I have no doubt that this is because we are putting effort into nurturing our community via social media. When putting a value on social media marketing, it’s important not to focus on return on investment, leads or sales – but instead on support, brand development, cultivating loyalty and building credibility. This was a prime example of why our efforts are entirely worthwhile,” he said.

What’s Next? Having discussed how fast moving the social media landscape is, we then asked Saipe for insight into what is hot right now, and what trends he predicts in the near future. “People react better to visual content than anything else – so visual platforms will continue to grow in popularity, those being Instagram, Pinterest and Snapchat. The various geofilters available on Snapchat have high entertainment value and are visually engaging. Facebook has already started down this path and I expect this will continue.” Saipe also commented on the strength of Facebook and Google, in a concept called the Google/Facebook duopoly. “These two brands currently account for 85 per cent of the UK’s online advertising market and I predict this will become stronger yet. Facebook is becoming a ‘portal of all things’. Its introduction of Instant Articles, which allows publishers to create quick and interactive articles on Facebook, and users to read these without leaving the Facebook app, is creating a walled garden – keeping users firmly inside the realms of the platform.” Saipe also predicted a move within social media platforms to programmatic advertising, automating the process of buying ad space, with ads being shown to users in real time. Pearly Grey has plenty of plans for 2017 too – with its focus on sourcing more user-generated content, including running a competition in conjunction with Tenerife’s popular Siam Park, which will see the resort provide a professional photographer to take the guests’ entry photographs. The resort also has plans to work alongside Avaya Solutions on Augmented Reality projects. “Our hope is to be the guinea pigs for upcoming projects, meaning we can get involved with the most cutting-edge technology,” concludes Beckley.


A FINAL THOUGHT

Risks of Division The British Hospitality Association champions UK hospitality and tourism and is the industry’s leading body. Chief Executive UFI IBRAHIM discusses the risks of both Brexit and homestay networks.

OUR MAIN FOCUS IS ON BREXIT. BRITAIN’S EXIT from the European Union will have wide-ranging implications, not least because predicting the shape of negotiations is difficult, even after the publication of the White Paper. The debate surrounding immigration and free movement is our primary concern. Our research shows that 700,000 – or 15 per cent - of the hospitality and tourism sector workforce is made up of migrant workers from the EU, and this number is probably conservative. We are working on a 10-year plan to increase the number of UK jobseekers making a career in our industry - to give employers, and British society, more time to adapt. However, there are simply not enough UK workers to fill the gaps, which will become apparent. Without EU workers we will be unable to welcome visitors from home and abroad and keep the UK going. I don’t think it has dawned on people that our way of living, and enjoying ourselves, will have to change. The government’s agenda focuses firmly on skills shortages, rather than labour. We urge them to consider the impact, not only to our industry, but the NHS, care and construction sectors, to name but a few, and shift this focus. The impact of homestay platforms, such as Airbnb, on our industry is a concern. Consumers see this as a great thing, and it also helps destinations, but what started out as a few people renting out space on a spare floor in a San Francisco apartment has now become a major corporate business. We know that many hosts are using their homes as pseudo hotels and that renting rooms and whole apartments has become big business. The lack of enforced legislation is our issue. In December, Airbnb issued a statement reinforcing the rule that properties can only be rented out for 90 days, and we welcome this. But how this is going to be enforced is another matter. The tax implications on all sides of home sharing have been well documented. A further issue is around consumer protection, for which legislation surrounding food, fire and health, is in place.

34 Q 1 /Q 2 2 01 7

UFI IBRAHIM CEO, British Hospitality Association

At the moment, the regulations are much stricter for hoteliers and B&B properties. We do not wish for the rules to become slacker for anyone, but rather to ensure that all businesses adhere. The notion of legislation not being enforced purely because a guest is sleeping on a host’s sofa is absurd. It takes only one night’s stay, or one meal, for the consequences to impact the guest. It is simply not acceptable for platforms to shun responsibility and their duty of care. We continue to explore how we can enforce legislation across such a widespread platform.


ENGAGE & INSPIRE YOUR BUYERS

RESORT SHOWCASE

SHOWCASE YOUR RESORT ACROSS

THE NEXT GENERATION IN

A MULTITUDE OF CHANNELS

SALES ENGAGEMENT

Step into the spotlight in front of 3.8 million RCI member families by featuring your inspiring resort videos and photography on RCI TV and RCI.com.

Take your sales presentation into the homes of your customers by sharing videos, infographics and photographs, to communicate face-to-face with your potential buyers and owners.

To learn how RCI Resort Showcase and RCI LiveStream can address your marketing needs and enhance your communication with clients, contact your RCI Affiliate Services Manager


Connecting our affiliates

To our valued industry partners As an RCI affiliate, our partners can become yours... Access leading industry suppliers at specially negotiated prices to improve your operational efficiency

To learn how the RCI Affiliate Access Programme can provide a cost-effective solution for your business, contact your RCI Affiliate Services Manager

PEM002513 Ventures Q1 Q2 2017  

Ventures Q1 Q2 2017

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