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Creating Opportunity in Shared Holiday Ownership


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The ocean abounds with opportunity, but you need to know where to look. Take the time to understand its rhythms, study its ways and learn from those who have experience of its nature…


“All the rivers run into the sea; yet the sea is not full ” King Solomon

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Contents Executive Summary 5 Introduction 7 Definition of Shared Holiday Ownership 9 Why Shared Holiday Ownership? 9 10 Shared Holiday Ownership Product Spectrum Mixed-Use Developments – Benefits 12 Mixed-Use Developments – Opportunities 14 16 Shared Holiday Ownership – Industry Timeline A Resilient Product Even in the Toughest of Times 19 Shared Holiday Ownership versus Residential Development Product Cycle 20 22 Shared Holiday Opportunities in Europe Strategic Considerations 24 Holiday Ownership Margin Improvement Over Time 26 Key Success Factors 27 Product Design 28 Physical and Non-Physical Product Dimensions 28 Design of Physical Product: Holiday Ownership vs.Residential 29 Shared Holiday Ownership Unit Size Allocation 30 Management Services Considerations 31 Human Resources Requirements – Holiday Ownership 32 Shared Holiday Ownership Sales & Marketing 34 Spectrum of Sales and Marketing Approaches 34 Shared Holiday Ownership Key Marketing Approaches 35 Key Sales Metrics 36 Legal Considerations 37 Commercial Suggestions for the New Developer 38 What RCI Can Do For You? 40 Partnered Solutions 42 About RCI 42 ® About The Registry Collection 43 Dedicated to our Developers 44 Key Trade Associations 46 TATOC – There for owners and you 46 Wyndham Worldwide Corporate Overview 48 Glossary of Terms 49 Acknowledgements 50


Where facts and figures stated in the articles contained in this publication are provided by contributors, RCI accepts no responsiblity for such facts and figures. The intention of this publication is to give readers an overview of the shared-holiday ownership market. It does not seek to make any recommendations and is not a substitute for professional advice. The views of contributors are not the views of RCI.

Produced by RCI Middle East E.C. (First and Second Editions) Adapted by RCI Europe for European markets © RCI Middle East E.C. 2010 & © RCI Europe 2011 Reprinted 2012

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The Case for Shared Holiday Ownership Today • There are over 1.5 million timeshare owners in Europe and 87% are satisfied with their ownership* • Shared holiday ownership gives holidaymakers the opportunity to purchase a lifetime of holidays at today’s prices • Purchasers aspiring to a second home lifestyle can afford it by buying shared holiday ownership properties without the financial commitment of a whollyowned second home purchase • Owners of shared holiday ownership leisure real estate enjoy complete flexibility to tailor their holidays to their personal preferences in terms of destination, activities and type of accommodation

• Because their holidays are paid for up front, shared holiday ownership owners have a greater propensity to take holidays than the average holidaymaker, raising occupancy levels and average spend in resort year round


• Developers of second homes are entering the market in Europe, with the potential to add value to the sales proposition by adding a shared holiday ownership/property exchange & rental component

• Shared holiday ownership can be a key driver of revenue generation in leading hospitality firms, with the potential to add value by: 1. Improving occupancies 2. Driving incremental revenues at on-site outlets 3. Spreading management, maintenance and operational costs across a wider set of assets 4. Diversifying asset usage and opportunities

*Source: Resort Development Organisation – 2009 study

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Every shore is rich with potential. Comb the beach when the tide is in your favour and its bounty can be harvested‌


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Introduction Together with the US, Europe dominates the global shared holiday ownership market, having a 25 per cent share of the fastest growing segment of the international hospitality sector.

is also benefiting from increasing activity in the European fractional market with an average of four multi-million euro properties signing up to the programme annually.

Shared holiday ownership – from traditional timeshare to upscale fractional resort properties – has proven to be a robust industry, as figures and statistics demonstrate. The last audited figures for European timeshare purchases (RDO: 2007) showed sales revenues of 957 million euros. Today there are approximately 1,400 resorts across Europe putting 73,540 units and 60 million bed nights onto the market. Resorts incorporating a shared holiday ownership component in their business models average 71 per cent occupancy levels, with an average holiday spend per family of 1,600 euros (not including prepaid accommodation costs).

The potential for the shared holiday ownership market continues to look positive. People are living longer, wanting more out of life in terms of experiences and lifestyle, wanting greater value out of every euro spent and, despite the economic crisis, household incomes continue to rise. Being a global business, shared holiday ownership continues to be strengthened as new destinations and owners come on board in Eastern Europe, Australia, Africa, Asia and India. The growing middle classes in countries such as Russia and India clearly have a desire to travel to Europe and they will play an important role in boosting demand for shared holiday ownerships and market activity. These are just some of the key factors which are expected to drive industry growth in the future.

We see potential for further growth in the shared holiday ownership market, a fact that has inspired the creation of this Handbook. RCI, the world’s leading provider of holiday exchange and travel services, has seen an average of 12 new developers coming into the timeshare business, and affiliating new resorts with RCI in Europe, each year for the past four years, including an increasing number of established hospitality brands.

This Handbook is primarily designed for decision makers in organisations with the potential to enter the shared holiday ownership leisure real estate market. It provides a starting point and some analytical tools and insights to help determine whether this industry will help to grow your business and revenues. It will give you the key topics you can discuss with your professional advisors when considering the shared ownership market. The pages which follow touch on many of the key issues you will face, while encouraging your company to ask and answer the right questions as you evaluate your first or next shared holiday ownership opportunity.


We hope you find the Shared Holiday Ownership Handbook useful, as your participation will be the key to unlocking the tremendous potential we see for the industry. Our goal is to serve as a partner in your success.

Despite the economic downturn, 2011 saw more than 50 new resorts joining the RCI global holiday exchange network. Its luxury leisure property exchange programme, The Registry Collection®,

Source for statistics: Resort Development Organisation – 2007 study

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“It would be so hard to maintain our client loyalty without an international

exchange system providing a set of high standards, both for our members to exchange and for us to maintain our own quality standards. Without RCI, the timeshare industry could not maintain such high standards and provide a flexible choice to offer owners which guarantees member loyalty. RCI gives us a gateway to the world for our owners.


Tayfun Sarman, General Manager of Club Armonia Bodrum Evleri an RCI Affiliate since 2002


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Definition of Shared Holiday Ownership Shared holiday ownership is a category of leisure-oriented, real estate products that enable multiple owners or rights holders to share long-term usage of an individual villa, apartment or collection of units/properties. • Shared holiday ownership is typically understood to encompass holiday ownership (timeshare), fractional, private residence clubs and destination clubs

• Shared holiday ownership is often a component of a mixed-use project development, including hotel and wholly-owned residential real estate

• Management services capabilities and hospitality solutions are integral components of successful shared holiday ownership products

• Condo hotel models (Buy to Use and Let) are also considered to be shared holiday ownership products

• While the industry has a great deal in common with other forms of real estate development, it is first and foremost a holiday product for most consumers

• Shared holiday ownership can generally be categorised into three main forms: Deeded, Equity Based or Right to Use

• Offerings are typically leisure-oriented, often with strong recreational and lifestyle components • The majority of shared ownership products are located in traditional resort destinations, but are appearing with increasing frequency in urban and exotic locations

• The exchange component, allowing owners to exchange into properties of commensurate quality all over the world using a holiday exchange services provider such as RCI and The Registry Collection®, is greatly valued by owners and is a persuasive benefit to offer prospective shared ownership purchasers during a sale

• Shared holiday ownership models are usually known as timeshare or fractional properties and a hotel operating a timeshare or fractional arm is known as a mixed-use development.

Why Shared Holiday Ownership?


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

• Concierge and other service areas that could generate ownership leads can be used in shared ownership marketing.

Create synergies with other asset classes in mixed-use developments

Multiple revenue streams

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

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platform on which to tell brand stories and to evolve brands over time • The purchase of a branded holiday ownership or private residence club is the ultimate expression of loyalty

• Profit contribution from initial sales and marketing

• Purchasers often go on to become tremendous brand ambassadors.

• Recurring management fee revenues provide higher margin with little risk


• Lower cost marketing through referral and existing owner programmes.

Most immersive brand experience available to consumers • The residential nature of shared holiday ownership products offers an incredible

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

Accelerate capital return Investment diversification

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Shared Holiday Ownership Product Spectrum Overview

Sol Melia Vacation Club at Gran Melia Salinas, Lanzarote

Holiday Ownership (timeshare)


Interest Size

1 week interest

1/20 to 1/4 interest

Qualitative Description

Condo or apartment

Mid to upscale condominium or villa

Consumer Benefit

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

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

Ownership Structure

Deeded, equity based or right to use

Deeded, equity based or right to use

Quality of Service

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

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

Annual Maintenance*


1.5% to 2% of purchase price


Sources: Ragatz, Northcourse and ARDA

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“ “The current economic climate has certainly

had an impact on the expected rapid growth of fractional ownership in Europe, but the consistent steady growth we have seen has

proven that there is a marketplace for fractional products and as the economy rebounds we expect to see a major upturn in new

developments throughout the region.

Paul Mattimoe, President & CEO, Perspective International

Private Residence Club

Destination Club

Condo Hotel

(Buy to Use and Let) 11

1/20 interest or greater

10 to 60 days usage

Whole ownership

Exclusively upscale luxury apartments or villas

Membership offering global access to portfolio of luxury residences

Holiday home solution for whole ownership market

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

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

Personal usage as second home plus rental and exchange options

Deeded, equity based or right to use

Typically right to use membership

Deeded or right to use

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

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

Varies by property

210 euros – 700 euros / day



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

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Mixed-Use Developments – Benefits

Palacio de Isora, Tenerife


More and more hotel brands are joining those already established – The Hilton Group, Club Meliá, The Cela Group, SkiStar, Disney Holiday Club – in the timeshare industry. The mixed-use development market is rapidly expanding, as is the demand for linked shared ownership and holiday exchange components. It is no longer enough for hotels to have a great location and smart rooms; today’s guest is looking for lifestyle options, flexibility, choice and more facilities than ever before. The hotel/timeshare model mix has become one of the new norms in hotel developments. The relationship between the two can create significant economic benefits, such as:

• Higher revenues from maintenance fees and sales used to provide multi-dimensional on-site guest amenities and lifestyle offerings

• Reduced marketing, operational and development costs

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

• Higher occupancy levels driving increased retail revenues

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• Resistance to standard seasonal lodging cycles levelling out peaks and troughs bringing more certainty to staff planning and operational management

• Shared marketing, sales and PR costs across product lines • Warm sales leads and no-cost marketing opportunities for timeshare using hotel customer database and promotional channels ie: Reception / in-house TV • Building a brand community and growing brand loyalty.

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The reef thrives on its diversity, creating relationships and providing opportunities that enrich all that live on it‌


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Mixed-Use Developments – Opportunities


“The biggest challenge is that hotel operators view timeshare

as competition, but we have statistics to show that when

somebody purchases a timeshare they go on to stay in the company’s sister hotels more than previously because their loyalty to the group brand increases. “Our average occupancy at our timeshare properties runs at 95%+ year round, so timeshare brings clients to the group’s hotels throughout the year. In this way, the captive audience using our combined site facilities automatically increases the

spend into our hotels.

Richard McIntosh, Managing Director, Hilton Grand Holidays EMEA an RCI Affiliate since 1980

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Hilton Grand Vacations Club on International Drive, Orlando


Normal Operations

Period of Sales with Shared Holiday Ownership Component 15

Rooms, Hotel Occupancy & Revenue

Normal occupancy

Increased occupancy from sales preview packages. Varying from hotel size and sales velocity, hotel occupancy could increase by 10-20% after any displacement.

Retail Outlets – F&B, Spa, etc

Usual F&B from operations

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


Normal sales from operations

A portion of the capital costs for developing key amenities provided by capital raised from shared holiday ownership sales. Post sell-out, a portion of maintenance/operations costs can be set against shared ownership revenues.

Fully paid by resort operations

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

Overhead Operational Support Areas

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Shared Holiday Ownership – Industry Timeline



1960 16


First holiday ownership resort created in Switzerland



Holiday ownership grows at annualised growth rate of 33%

RCI opens for business


Marriott becomes the first hospitality brand to enter the holiday ownership industry


Disney Vacation Club is launched

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1995-2007 Holiday ownership continues to grow at annualised growth rate of 15%

Mid 90s The luxury segment gains traction as fractional and PRCs introduced

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Major brands like Fairmont, Four Seasons and Ritz Carlton enter PRC space


Shared holiday ownership sales reach an estimated $16.5 billion worldwide

1992 The Hilton Group enter the holiday ownership industry with HGVC

Early 2000s


The Registry Collection速 joins Wyndham Exchange and Rentals to provide an exchange solution for the luxury segment


RCI enhances Weeks Exchange Programme

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In the shifting patterns that life paints across the ocean floor, the leadership of a few individuals can dictate the direction taken by millions‌


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A Resilient Product Even in the Toughest of Times Howard C. Nusbaum, President and CEO, American Resort Development Association (ARDA) No matter what state the economy is in, if you own your vacation, you will take it – pure and simple. The prepaid nature of our vacation product is very much a part of its magic, as it provides a disciplined means of guaranteed use.

The consistent quality and assurance that your vacation will be what it was intended to be adds to that magic factor. Because of this, timeshare owners have become the ‘Cheshire Cats’ of the Monday morning office water-cooler chats as they tell co-workers of their travels and adventures from the previous week. Quite simply, they bought and paid for their vacations at a set rate, so now they are recession-insulated when it comes to taking annual holidays. I’m not just being an industry cheerleader with this point. Our great timeshare consumers, the ones who already understand it is about family time and better vacations, own this product because they need and value true rejuvenation together. This means enough space for everyone to relax and have it their way – no pizza on a bed, no lining up for the bathroom or stress from being on top of one another. And I have the facts to back up this claim. Even in times of economic turbulence, timeshare occupancy rates have

continually shown resilience. For example, Ernst & Young reported in 2011 State of Industry that US timeshare resort occupancy was 79%. This compares to a 58% hotel occupancy for the same period as reported by Smith Travel Research. US timeshare occupancy has held steady at 79%- 80% between 2006 and 2010 (5 years) while hotel occupancy ranged from 63% to 55% for the same time period. The relatively high occupancy of timeshare resorts during downturns is a seminal point with many beneficiaries. First, it is an important reaffirmation and endorsement of the value that timeshare owners get from their purchase – namely a lifetime of great vacations. It is also important because the purchase of timeshare enables those savvy consumers the luxury of ‘taking a break’ at a time when such an expenditure might otherwise be hard to justify, due to fears of job loss or belt-tightening. Add to that the health and wellness benefits of going on vacation, and our owners come out ahead even more.

The high occupancy rates also have important ramifications for local communities and their economies. Resort destinations are often singularly reliant on the tourism industry. During a downturn, therefore, the hotel business can disproportionately impact the community, from the produce supplier to the corner café. That is why timeshare is an important stabilising component of any resort destination, as areas with these developments have a cushion to soften the valleys of the economy on their communities.


It is always after a recession (the early ’90s), a natural disaster (Hurricane Katrina), or a geopolitical event (September 11) that timeshare’s resilience rings most notably true as a positive force of economic impact. Our industry provides jobs, generates income and boosts the overall economy. Vacation ownership is a stabilising force with a positive economic impact at a time when it is needed most.

Howard C. Nusbaum, ARDA Howard C. Nusbaum has served as President and CEO of ARDA since September 2000. Over the past thirty years he has held executive hotel positions in the private sector, as well as executive positions in not for profit association management. His role at ARDA includes serving as President of the ARDA Board of Directors, the AIF Board of Directors and the ROC Executive Committee. He is a graduate of the University of Cincinnati and the Institute for Organization Management at the University of Notre Dame.

The views of contributors are not the views of RCI.

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Shared Holiday Ownership versus Residential Development Product Cycle

Synergies and New Requirements for Developers and Hospitality Companies Considering Shared Holiday Ownership Whole Ownership Residential Development Cycle

3 33 3 3 3 3 3 3 3 3 2 22 2 3 2 2 2 22 1 2 1 1 1 1 Move-in

Repairs and Maintenance

Post Move-in



1 1 1 1 2 2


Sales Retention and Topping Out

Events & Marketing Programmes

Construction Contract Finalisation

Pre-Sales Launch & Marketing


Features & Specs

Pre-sales Planning & Marketing

Construction Documents



Budgets and Approvals

Design Development

Schematic Masterplan

Legals, Performa and Approvals


R/E Offer

Preliminary Business Planning

Land Review

Scenario Planning and Research

3 3 3 3 3 3


Courtesy of FutureBrand

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Shared Holiday Ownership Development Cycle

3 4 4 4 4

Introduce Management Services

Sales to Existing Owners

Management Services Fees

Referral Programmes




3 3 3 3

Welcome New Owner / Member

Host Sales Presentation

Launch Marketing Programmes



Create Sales & Marketing Team


2 2 2 2 Pre-sales Planning & Marketing


Construction Documents




2 2 2 2

Physical Product: Specifications & Amenities

Benefits & Privileges

Use Plan

Define Legal Structure



1 1 1 1 1

R/E Offer

Preliminary Business Planning

Best Use / Feasibility Study

Legals, Performa and Approvals

Consumer Research






5 Holiday ownership in particular utilises a unique sales process, but like residential ownership it benefits significantly from branded, experiential sales centres

See page 28

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

4 2 Incorporate shared ownership business model assumptions

Particularly in the case of holiday ownership where strategies differ significantly from residential. See page 34

6 While very similar to those of a hotel, shared ownership servicing has some unique dimensions. See page 30

Courtesy of FutureBrand

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Shared Holiday Ownership Opportunities in Europe

Contributed by Philip Bacon, Managing Director, HVS Global Hospitality Services 22 We should start with the most important question, which is: What constitutes a good resort development location? Firstly you must consider access. The shared ownership business relies upon making it easy for guests to use the product. If good air routes or other forms of transport don’t exist or are too expensive, this will become a limiting factor on the attractiveness of your product; obvious perhaps, but still important to highlight as a golden rule of the business. Proximity to demand generators is generally vital too. It is rare that the accommodation is the only attraction that a customer needs to convince them to make a long-term commitment to shared holiday ownership. Demand generators in the form of tourist attractions and activities will either be external or internal. If you are thinking of adding value to your project by adding things like a golf course,

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a spa, an equestrian centre or anything else that requires investment in buildings and infrastructure, make sure that you fully understand how they will add value to your business and who is going to pay for them, either directly or indirectly through premium pricing.

So, where should your focus be today?

If you are relying on external demand generators, make sure that they are not too far away and also consider whether you can achieve some sort of privileged access to them for your customers.

• The Black Sea coast of Bulgaria and Russia – accessible by a huge ‘drive-to’ population

Secondly: seasonality. Most places have a clear seasonality and a clear market to go with it. To bring year-round attractions to your development will require significant investment in promotion and communication costs, so be ready for this and make sure you are committed to creating real demand for your project as well as having the co-operation of local/regional tourism authorities.

Here are my top tips for European development opportunities: • The Adriatic Coast of the Balkans – generally hailed as being ‘the Mediterranean as it used to be’

• The south-east coast of Italy – developing rapidly as a new focus for tourism • Sicily – one of the greatest tourism assets in the Med • Cyprus – appealing to new, growing outbound markets as well as having a strong pull for the UK • The UK – the ‘staycation’ is probably not a passing fad

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• The Atlantic coast of Portugal – a real competitor for the Algarve • South-west France – relatively undiscovered but easy to access and has a long tourism tradition. Many of these locations are appealing to some of the newer members of the EU as well as Russia. They are markets that are at a different place on the growth curve of outbound tourism compared to ‘Old Europe’ and perhaps don’t suffer from some of the prejudices to be found there about what shared holiday ownership offers. However, while following the golden rules described above, take care with undiscovered and undeveloped locations. This type of destination will always attract the pioneers of tourism, but shared holiday ownership is typically about repeat visitation to places where people would like to have something more permanent than a rental opportunity. It is also about ease of access and long-term service delivery, and these things are more challenging in undiscovered parts of the world, however beautiful they may be. The week-based timeshare or holiday ownership business, arguably the oldest

of the shared ownership models, is still relatively new, despite being over four decades old. This is nothing compared to destinations like Las Vegas, Miami Beach and the French Riviera; and let’s not forget that the first Thomas Cook organised tour was in 1841. The places in Europe where shared holiday ownership has flourished have been where people already enjoy going on holiday, such as the Canary Islands, the Costa del Sol and the Alps. The objective in today’s market is carefully to match your product with your chosen target market; do not compromise, there is too much choice out there and your customer is better informed than you think. Seek out sources of customers who meet your profile – remember it is no coincidence that some of the world’s leaders in shared holiday ownership are hospitality-driven organisations with access to large numbers of loyal customers. What is needed is a well-planned approach to the established model. The ‘must have’ components are:

• High levels of service and activities on site designed around your customers’ needs • Added value features such as external and internal exchange, as well as tailor-made travel and concierge-style services • Added flexibility through point-based systems (but do not think that these are the answer for everyone). All these can add up to a compelling shared ownership product provided the basics are there in the first place, and this is true whether your product is a traditional week-based right to use, a 1/4 or an 1/8th share private residence club. The key to success is to understand how to match your location and your product with your market and design a product that will work with the right level of business risk for you and your fellow stakeholders.


• Excellent standards of accommodation, typically designed with families in mind (something that traditional hotels often get wrong)

Philip Bacon, HVS Global Hospitality Services Philip Bacon, Managing Director of HVS Global Hospitality Services Madrid Office, joined forces with HVS in 2005 when he established the Shared Ownership Services division for EMEA & Asia. Based in Madrid since 2007, Philip is responsible for delivery of all HVS services to the hotel and mixed-use sectors, including valuations, feasibility studies, operator search and business planning. Philip is a chartered accountant with over 28 years’ experience in professional business advisory services and general management, mainly in the UK and Spain. He was also Chairman of a European Industry Accounting Standards Working Party that published a Statement of Recommended Practice for income recognition for the timeshare industry.

The views of contributors are not the views of RCI.

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Strategic Considerations


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

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

own sales and marketing capability or outsource to a capable partner? All of these are important questions and answers will be based around the individual needs of your business.

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

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

Legal Structure Marketing Approaches How should your product be marketed, what is the appropriate design for your sales centre(s), and where should they be located? Should you build your

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

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“Choosing the right structure for your holiday

ownership offering can reduce transactional fees and

create efficiencies across jurisdictions.

Declan Kenny, CEO, First National Trustee Company


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Holiday Ownership Margin Improvement Over Time

“The fractional consumer seeks all

the benefits of a luxury second home combined with a hassle-free ownership experience. Developers who can couple this with reasonable maintenance fees

will find success.

Piers Brown, Founder,


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

Example of Potential Efficiency Lift Forty-one percent of timeshare sales are to those who already own a timeshare with the developer. Many owners, being highly satisfied with their product, will be happy to upgrade their timeshare ownership or buy additional weeks or points.

Higher margin marketing programmes become increasingly attractive as the owner base increases:

(Excerpt from 2009 State of the Holiday Timeshare Industry: US Study 2009 Edition by ARDA)

• Trial Programmes

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• Referral Programmes

Downstream revenue plays an increasingly positive role as owner base grows: • Management Services Fees • Loans Portfolio (where applicable).

• Existing Owner (add-on) Programmes

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Key Success Factors Holiday Ownership


Destination Club

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

• Resorts with a 24 week high season or longer

• Network of signature homes in desirable locations

• Location with high real estate values

• Destination with high volume of seasonally consistent tourist visits

• Consumers view the market as a compelling leisure destination

• Option to cancel with guaranteed return of a portion of original purchase price

• Strong leisure oriented location

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

• Customer-centric and effective property management company • Strong owner satisfaction • Global exchange affiliation • Efficient sales and marketing costs • Compelling sales centres


• Strong brand/corporate credibility.

• Flexible layouts and design • Global exchange affiliation • Turnkey services • Quality product • Excellent services yet reasonable maintenance fees.

• Solution to compete against resales.

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Product Design

Kamelya World, Turkey


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

Physical Considerations

Non-Physical Considerations

• Master Plan

• Resort Networking

–– points (holiday ownership)

• Architecture

• Exchange Solution

• Interior Design

• Deed vs. Right to Use

–– annual selection (fractional/ private residence club)

• Floor Plans

• Legal Structure

• Amenities

• Use Plan

• Facilities

–– fixed week (holiday ownership) –– floating week (holiday ownership)

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–– fixed rotation (fractional/private residence club) • Service Levels • Management Solution • Owner Benefits Programme

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“There has been a noticeable shift in

developers recognising the value of owner referrals and how this enhances margins due to cost efficiencies in marketing. At a time when purchasers of second homes are looking to reduce financial risk and exposure, shared holiday ownership products offer the lifestyle


solution with reduced financial commitment.

Sean Lowe, Managing Director, RCI EMEAI

Design of Physical Product: Holiday Ownership vs. Residential The design principles associated with holiday ownership differ in some important aspects from traditional residential developments.

Holiday Ownership


Development Layout

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

Designed around needs of a single residential owner

Outdoor Space

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

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

Common Amenities

Comprehensive resort style amenities, expansive pools or alternative leisure amenities

Resort style amenities limited to very high-end products


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

Full kitchen design to accommodate all major appliances

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Shared Holiday Ownership Unit Size Allocation Villa Cana, Spain


Holiday Ownership (timeshare)*

Fractional Developments**

Private Residence Clubs**





















Bedroom Allocation

Typical Area of Bedrooms (square feet) Studio

400 – 500




650 – 800




850 – 1000




1050 – 1300







* Source: 2011 RCI Europe ** Source: The Shared Holiday Ownership Resort Real Estate Industry in NA by Ragatz Associates

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“One of the strengths of a professional

management organisation is being able to tap into expertise and supply chain management to obtain best in class and price, whether that means furniture, staff uniforms, utility costs or

food for the restaurants.

Simon Jackson, Chief Executive, Macdonald Resorts Ltd an RCI Affiliate since 1981

Management Services Considerations While there are many synergies with hotel operations, shared holiday ownership servicing has some unique dimensions. The following areas may need to be addressed once your project is operational: Property & Facilities Management

Rental Management (if applicable)

• Resort maintenance and repairs

• Central reservation system

• Housekeeping

• Inventory management

• Front desk

• Marketing

• Capital improvement and replacement reserves

Financial Management • Operating budget

Owner Services • Check-in • Reservations, owner inquiry, product information • Owner communications / annual maintenance fee statements • Home owner association / board management

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• Owner dues, assessment fees, user fees • Accounts payable.

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

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Human Resource Requirements – Holiday Ownership

Proposed Organisation Chart for Holiday Ownership Operation of Moderate Scale*

MD Holiday Club

Director of Sales


Director of Marketing

Sales Manager

Sales Manager

Sales Manager

Marketing Manager

Marketing Manager

Sales Reps (8)

Sales Reps (8)

Sales Reps (8)

Marketing Reps (8)

Marketing Reps (8)

Volume may be increased by scaling sales or marketing representative to 8:1 ratio (approximate to manager)

*Excludes administrative roles Note: Fractional resorts and private residential clubs featuring smaller interest sizes (e.g. 1/20) may employ a similar organisational structure.

“The appropriate scale and complexity of the sales and marketing

operations is driven by a number of internal and external considerations, including product type, target markets, client segments, investment

objectives and developer’s control requirements.

Preben Vestdam, President, Valhalla Associates

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Shared Holiday Ownership Sales and Marketing

Spectrum of Sales and Marketing Approaches The approaches taken to shared holiday ownership sales and marketing are best viewed on a spectrum with holiday ownership at one end and traditional residential at the other.

Holiday Ownership

Sales Process

Fractional / Private Residence Club

Consumer incentives used to gain commitment to attend sales presentation


Relationship driven, consultative sales process Varies by interest size and product positioning

34 Sales Duration

Same day close

Weeks / months

“The timeshare and fractional sales processes differ from traditional real estate sales in

numerous ways. Firstly, very few people start out looking to buy a timeshare or fraction. In the main, you are not selling a financial investment, rather a lifestyle investment – so getting the prospect to buy into the dream is an essential part of the process. The good news is that once you have the right sales process, the sales come and keep on coming. We’ve been in the industry for 20 years and have helped many start-ups to get established and grow – probably the key area we focus on is building a strong replicable sales process through the introduction of

technology. For us, this represents the foundation for a successful long term project.

Pete Jones, Co-founder, Generator Systems

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Shared Holiday Ownership Key Marketing Approaches Here are some of the most frequently used marketing approaches

In-house Guest Programmes

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

Direct Marketing / Outbound Calling

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


Owner Referral Programmes

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

Trial Programmes for Non-Purchasers

When a sales presentation does not result in an immediate purchase, a trial period of membership/ownership is sometimes offered. Trial programmes are typically 1 year memberships that include a week of holiday. Efforts to upgrade trial members/owners to full membership within that year are often very successful.

Add-On Offers for Existing Owners

Soliciting existing owners to upgrade their existing timeshare product.

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Key Sales Metrics


Close Rate

Percentage of tours resulting in a sale. Calculated by taking total achieved sales divided by total tours. Typical timeshare close rates range from 10% to 15%.


Also known as Value per Guest (VPG). Calculated by taking gross sales revenue divided by total tours. Measures how efficiently a sales line is performing and measures the quality of tour guest (prospect) that the marketing team brings to the sales presentation.

Cost per Tour

While efficiency (VPG) is an excellent indicator of sales and marketing team performance, VPG does not factor in the underlying cost of each marketing programme or tour (sales presentation) type. The cost per tour captures the average cost to generate each sales presentation and is typically broken into subtotals for each marketing programme.

Total Tours by Programme

Tours are tracked by marketing programme and then converted to a percentage of total tour flow. As cost per tour varies by marketing programme, it is important that actual tour flow remains in line with budgeted tour flow/marketing mix assumptions.

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Legal Considerations The New EU Timeshare Directive Contributed by Eric Gummers, Partner, Howard Kennedy, International Lawyers From a legal and regulatory viewpoint, February 2011 marked a very positive milestone for the shared holiday ownership sector across Europe.

All of this should serve to increase consumer confidence and ensure that the prospective purchaser is well informed about the key elements of purchase.

The Timeshare Directive has been enacted at a European Union level and is being implemented across all 27 European Union Member States.

The key aspects of the Directive as it relates to shared holiday ownership are:

Significantly, this Directive, being a revision of the earlier Timeshare Directive (1997): • Is a mandatory Directive and should eliminate inconsistencies between different countries • Imposes tough conditions on one category of offering – long term holiday products – which previously often had not been soundly based and had unfairly competed with other products which were regulated • Extends to providing information in relation to resales and exchange contracts.

As to the status of implementation (July 2011), the Directive is being implemented at a national level and has been adopted in some 17 EU nations. Of those destination countries where implementation is outstanding, the most significant is probably Spain – where a draft is under consideration.

• Providing information ahead of purchase • A uniform ‘cooling off’ (recission) period of 14 days • An absolute prohibition on taking any form of payment or deposit during the 14-day cooling off period


• A requirement that documentation is available in the native language of the buyer. For the developer, investors and funders, the Directive sets a clear and level playing field from a legislative perspective. This harmonisation across Europe is very welcome.

Eric Gummers, Partner, Howard Kennedy, International Lawyers Eric Gummers is an international lawyer based in London and working for Howard Kennedy. He is recognised for his expertise in the leisure, hotel and shared holiday ownership sectors and has been involved over the past five years in discussions regarding the second European Timeshare Directive and its implementation. He sits on the Legislative Council of both the European Resort Development Organisation (RDO) and reports on International matters to The Legislative Committee of the American Resort Development Association (ARDA).

The views of contributors are not the views of RCI.

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Commercial Suggestions for the New Developer

Holiday Club Katinkulta, Finland

Contributed by Alex Radford, Solicitor, Irwin Mitchell, International Lawyers 38 Here is some advice to new developers entering the shared ownership market based on my extensive experience of having acted for developers, hoteliers, trustees, exchange companies and consumers. When it comes to a new shared holiday ownership project, it’s not just legal advice that the new developer requires, but commercial advice from experienced professionals who can steer them towards the path of success.

Identify your potential purchasers If you have identified or already own the development which you wish to sell as a shared holiday ownership product it is likely that you are familiar with the type of people that already use or are likely to holiday on the development. Essentially, your target market of potential purchasers has been identified, or should be with market research, before you do any

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business model planning. It is extremely important to identify your target market as they will necessarily shape the design and development of the product you will eventually sell to them.

What facilities and activities are they seeking? What do they want from their holiday? What are your competitors doing? Listen and learn from your potential purchasers, design your product and don’t stop listening!

Sales You know who you are going to sell to, but who will sell this product for you? This is a product that is sold rather than purchased so crucial to the success of the product is how to sell it and who are the best professionals to get on board to help you to sell it. The right service supplier network is invaluable.

Product What will sell? Talk to your potential purchasers. How often do they visit your area each year? How long do they stay for? What times of the year do they visit? How much do they spend on holidays?

Price & Finance You have designed a product you believe will sell and that your potential purchasers can afford. The offer of finance will make sales easier to achieve. Contact local banks or financiers so you can offer lending to your potential purchasers. How much can your purchasers borrow? Depending on your target market, the product and finance available, you can then price your product.

Exchange Not everyone wishes to return to the same place each year. To overcome this

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“RCI puts a lot of effort into helping us in our daily business and

giving better customer service to our clients. RCI cares about our owners and their satisfaction, as well as sharing our goals, plans and wanting to be a part of our future. The RCI people we deal with understand our business and this has been crucial in helping to develop lead generation campaigns that yield good results. It’s not just a client relationship – it really is a partnership. When their clients

succeed, RCI succeeds. It’s a win-win situation for both parties.

Marko Hiltunen, Marketing Director, Holiday Club Resorts, Finland, an RCI Affiliate since 1989

39 common objection from purchasers, it is important to offer owners the opportunity of exchanging their holiday time in other destinations around the world through an established holiday exchange services provider.

and specialist advisers. It is likely you will require advice from sales and marketers, exchange companies, financiers, accountants, trustees and lawyers.

Legals Advisers The shared holiday ownership market is a unique industry and therefore it is essential that you obtain advice from experienced

Carefully drafted contracts and development documents which are clear, concise and easy to understand offer legal security to your purchasers and give you a competitive advantage.

The legal documents bring all that the product stands for together and should comply with local and international laws. The legals should stand up to the test of time, serving and protecting both developer and owner throughout the lifetime of the development, striking the balance of fairness between the developer and the buyer.

Alex Radford, Solicitor, Irwin Mitchell International Lawyers Alex Radford is an English solicitor and Spanish abogado with the international law firm, Irwin Mitchell. He is a fluent Spanish speaker and has advised clients on timeshare, fractional and shared holiday ownership developments located around the world.

The views of contributors are not the views of RCI.

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What RCI Can Do For You?

Enhanced Benefits

Developer Support

Affiliation to the RCI network enhances the benefits attached to your shared holiday ownership product.

Affiliation to the RCI network can support the developer in many areas:

RCI owner members have access to a range of exclusive member benefits and enhanced services which make holiday planning easier and more fun, as well as being eligible for RCI's exciting member reward programmes and special offers.

• Large resort network with global portfolio of available destinations • Large and established membership base

• Feasibility studies It provides customers with access to holidays around the world through a holiday exchange platform that connects your project to a global network of more than 4,000 RCI- affiliated resorts.


• Product definition process • Financial planning exercises • Contribute to sales & marketing plans • Share insight on industry best practices • Identify opportunities and competitive advantages • Support senior management recruitment efforts

40 • Product distribution and lead generation

• Extensive rental and distribution capabilities • Willingness and ability to support cooperative marketing and lead generation efforts • Longevity, expertise, and industry experience • Brands and critical mass in all shared holiday ownership categories, including the luxury segment

• Serve as an endorsement, providing worldwide credibility • Meet the exchange needs of your customers.

“From the original development stages of Club Meliá and beyond, RCI has facilitated

true global teamwork, providing innovative ideas, valuable resources and turnkey solutions to enhance our sales and resort operations. We’re proud of our trusted relationship with RCI. With its growing membership and ever-expanding list of new

affiliated resorts, and through exchange and lead generation, RCI has the capacity to provide high-occupancy and high-quality prospects, creating new timeshare

opportunities in the most exciting holiday destinations in the world.

Denis Ebrill, Executive Vice President, Club Meliá RCI Affiliate since 2005

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Partnered Solutions

RCI and The Registry Collection® have partnered with developers and hospitality companies around the globe to create many of the world’s leading timeshare, holiday club, fractional and private residence club offerings. We are here to support you from strategy development and product design, through to launch and a successful operating phase. In addition to our capable local teams and significant resources, we work closely with solutions–oriented suppliers in shared holiday ownership markets around the globe.

About RCI RCI is part of Wyndham Exchange and Rentals, the worldwide leader in holiday exchange and the European leader in holiday rentals, offering it’s 3.8 million members exclusive access for specified periods to more than 97,000 vacation properties in approximately 100 countries. Wyndham Exchange and Rentals is comprised of holiday exchange, including RCI, the worldwide leader in holiday exchange and provider of travel services to businesses and consumers and The Registry Collection® programme, the world’s largest luxury exchange programme; vacation rentals, including Endless Vacation Rentals®, Landal GreenParks®, Novasol®, Hoseasons, James Villa Holidays, ResortQuest® and other renowned vacation rental brands, through which holidaymakers can rent a variety of property types, from city apartments to villas. Wyndham Worldwide Corporation is one of the world’s largest hospitality companies with leading brands in lodging franchising, vacation ownership, vacation rentals and vacation exchange. RCI is … 42

• A global leader and innovator • A creator of products and services for an ever-changing, increasingly demanding world of leisure property ownership • A resource housing four decades of international experience at our customers’ service to support their growth and underpin their success • A provider of call centre servicing in over 20 languages. RCI Call Centres service members in over 20 languages and RCI averages more than 90% fulfilled exchange requests for its members, sending twice as many owner families on exchange holidays than its nearest competitor. RCI celebrated its 35th anniversary in 2009 and today it remains every inch the pioneering business it set out to be all those years ago. A pioneer in weeks exchange, RCI launched the world’s first global points-based exchange system –

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the RCI Points exchange programme – in 2000. Each year it invests significantly in improving its member services and has introduced greater transparency and flexibility to its Weeks exchange programme, enabling members to combine weeks to access resorts which they were previously unable to, and to receive deposit credits back from unused Trading Power to put towards future exchanges. Enhancements to Weeks and RCI Points member websites are continual, making it easier and more fun to transact online, while a host of exclusive RCI Membership benefits deliver great lifestyle enhancements to its members as a bonus. The company is one of the industry’s greatest innovators and has recently launched RCI TV, a dedicated TV channel currently accessible through its enhanced consumer website – – and on several digital channels, to showcase its affiliated resorts using professional video footage to capture the emotional experience of a holiday at the featured resorts. It has launched several Apps for the iPhone and iPad which facilitate the capture and sharing of memorable holiday moments in

pictures and words in a growing web-based RCI Holiday community. Its online community is growing on Facebook, Twitter and in the RCI Blog. To further support its affiliate developers’ marketing initiatives, RCI offers the RCI Resort Showcase package as a lead generation tool with a reach to both owners and non-owners. It is a three-tier package with the top level or Platinum tier delivering a three-minute custom professional resort video, a resort music video, 20 professional still images for use in directories and marketing materials, the creation of an e-blast video for use in marketing campaigns, plus the facility to add your own branding, introduction, call to actions and website links. Developers purchasing the Platinum package will benefit from the bonus of the RCI Presenter, a touchscreen interactive tour of the shared holiday ownership product and the benefits of RCI Membership, including maps of affiliated RCI resorts worldwide and details of exclusive RCI Travel benefits. For more information visit and

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About The Registry Collection®


RCI also services The Registry Collection, the world’s leading luxury leisure property exchange programme, featuring more than 175 fractional properties that are either available for exchange or under development. The Registry Collection programme services high-end fractional properties and it currently has over 30,000 members and more than 130 affiliates across the globe, providing members with access to an elite global network of the very finest holiday properties at some of the world’s premier destinations, as well as personal concierge services that are available 24 hours a day. From condo hotels and high-end fractional resorts to private

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residence clubs and fractional yachts, The Registry Collection programme facilitates exchanges around the world to some of the most unique properties and redefines the luxury holiday and second home experience for owners and developers. Developers associated to the programme can offer their purchasers the largest choice of luxury exchange options

currently available, as well as benefiting from exclusive developer services such as the Early Privilege Programme giving them the opportunity to offer off-plan purchasers the chance to take holidays in The Registry Collection properties that are available while waiting for the keys to their own properties.

For more information visit

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Dedicated to our Developers

A dedicated RCI team will assist developers who are new to the business, as well as those who wish to expand their existing operation, every step of the way. The experienced industry professionals in RCI’s pan-European Business Development team are there to support developers from product development to launch, and throughout the operational life of their resort.

What the RCI partnership means to your business: • Assisting consideration of feasibility studies, business models, legal framework, brand/marketing programme

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

design • Working with you to create a ‘white label’ own-brand


• Putting you in touch with the best professionals in the business to build an experienced support network, such as financiers, trustee companies, legals, marketing and sales • Giving you access to its multi-million euro/global technology platform • Providing expert inventory and club management capability

customised club membership product • Engaging in vigorous direct mail campaigns to drive resort occupancy levels and leads • Providing customised Point of Sale and Marketing materials plus RCI Resort Showcase & RCI Presenter programmes, RCI TV and Apps for both members and non-owners, and for members, giving them full online account

• Assisting in sales staff training

• For more information on the RCI exchange network and membership programme visit • For information on support materials and how we can work in partnership with you, visit the RCI Affiliates


• For more information on our fractional exchange programme visit • To continue the discussion, please contact Amanda White at


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Key Trade Associations

Aventura Cove Palace, Mexico


There for your owners and you The Timeshare Association (Timeshare Owners and Committees), known as TATOC, is a non-profit making limited company formed in 1989. Its primary objective is to promote high-quality standards for resort facilities and to encourage the efficient management of timeshare resorts through communication and education.

The organisation actively promotes the positive image of timeshare through all communication channels, hosts a dedicated website, runs a national help line and organises an annual conference with RCI being one of the main sponsors. It is now recognised by the media and the industry as the voice of timeshare owners in Europe. RCI has enjoyed a long association with TATOC, having a dedicated TATOC

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liaison officer and regularly sending RCI representatives to the Owners’ Committees’ Annual General Meetings. TATOC is there for RCI Members and, though always representing its members’ interests and working for them, TATOC officers never fail to engage with RCI and its developers to investigate future developments to enhance the member experience.

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

RDO is a direct membership organisation with over 90 members from all sectors of the industry across Europe including resort developers, exchange companies, management and marketing companies, trustees, finance houses and resale companies. Members are committed to high service standards and integrity, and abide by a code of ethics which ensures buyers have secure occupancy rights and that payments are protected. RDO works with governments at European and national level to create fair legislation that safeguards the interests of the consumer and encourages the positive development of the industry.

ARDA promotes the growth and development of the timeshare industry through a variety of capacities.

mature industry that instils confidence within all stakeholders and is positively perceived by the consumer at large. AIRDA – the All India Resort Development Association, is an independent, non-profit advisory body dedicated to the Indian timeshare and holiday ownership industry. In 1998, a visionary group of resort developers and RCI inked a blueprint for an independent body – an association with a purpose and an agenda – keeping in mind the nascent profile of timeshare in the country and the constructive role that could be played by developers to grow the industry. Importantly, it also works hand-in-hand with both promoters and consumers.

47 The Resort Development Organisation was created following the decision by the European Timeshare Federation in February 1998 to integrate all national timeshare trade associations into one pan-European direct membership organisation. RDO was established to improve representation for reputable companies in the timeshare sector and promote fair trading, quality within and growth of the timeshare industry. Its members lead the industry in their commitment to strong ethical standards with the aim of raising

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Vacation Ownership Association of Southern Africa (VOASA), previously known as the Timeshare Institute of Southern Africa, was established in 1990 as an organisation representing the interests of the respective stakeholders with its primary objective being to ‘create, maintain and develop an environment within which the long-term viability and growth of vacation ownership through shared holiday ownership can be optimally ensured’. The Association of International Property Professionals is a global organisation dedicated to building confidence in international property markets, representing industry professionals and promoting the highest standards of professionalism in the property development markets across the world.

Fundamental to the existence of VOASA is its ability to self regulate and control the industry in such a manner that the national authorities, via the Department of Trade & Industry, is confident of its ongoing ability to manage and deliver a

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Wyndham Worldwide: Corporate Overview

Global Resources, Regional Solutions The Wyndham Worldwide group is one of the world’s largest hospitality companies spanning six continents. We offer individual consumers and business customers a broad array of hospitality products and services, as well as various accommodation alternatives and price ranges through our premier portfolio of world-renowned hospitality and leisure brands.



• World’s largest lodging franchisor



• World’s largest holiday exchange network


• World’s largest holiday ownership company

• 7,150 hotels • 606,000 hotel rooms across 65 countries worldwide

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• World’s largest holiday rental group

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Glossary of Terms Here is a list of terms, phrases and titles commonly used in the industry: Condo Hotels – The Condo Hotel model can be applied to several types of property, including accommodation types from hotel rooms & suites to apartments, townhouses and villas. The basic model involves the sale of property which is actively managed by a separate company that contracts the services of a hotel company to market the accommodation and provide services to guests. In all cases, there will be some split of rental revenues between the hotel operator and the individual room/unit owner, either on a pooled or separate asset basis. Destinations Clubs – Most Destination Clubs are non-equity based. They are generally positioned very high up the quality scale and the properties tend to be fully-serviced individual homes rather than properties that form part of a larger resort environment. There is a high degree of lifestyle benefits and services incorporated into Destination Club membership and they generally offer the return of a percentage (typically 80%) of the initial membership fee should the member decide to leave the club. Exchange Company – The system that allows timeshare and fractional owners to trade the accommodations they own for comparable accommodations or travelrelated services. Most resort companies are affiliated with an exchange company. Many resort companies offer an internal exchange mechanism that allows owners to exchange to resorts within their company’s portfolio of resorts, as well as to the affiliated resorts in the holiday exchange networks of the exchange service provider.

Fixed Week – A type of timeshare ownership in which usage rights attach to a specific week of the year – each year in perpetuity. Floating Week – A type of timeshare ownership where the use rights are subject to the owner reserving his or her week within a season purchased (winter, summer, etc.) or sometimes throughout the year. A year-round ‘float’ is most often found in resorts with similar seasons, like Hawaii or the Caribbean. Fractional Ownership – Fractional Ownership allows multiple buyers to acquire an interest, whether equity or otherwise, normally in a luxury property and to collectively enjoy the benefits thereof, whilst sharing the annual management costs. A Fraction can vary from two weeks, to a quarter, eighth or to a twelfth and gives the owner the right to stay in the property [which may or may not be part of a larger resort environment] for the corresponding segment of the year, generally on a rotational basis. Fractional Owners usually have a direct interest in the value of the asset and are likely to benefit from any appreciation in the property value. Points – A ‘currency’ that represents timeshare ownership and is used to establish value for seasons, unit sizes and resort locations. Points are used by some developers for both internal and external exchange.

Private Residence Clubs (PRC) – Although similar in concept to the traditional fractional ownership, PRCs are often associated with a five-star or hotel luxury brand. A PRC is usually either a ‘stand alone’ development or can be part of a mixed-use resort development. The interest sold in the properties generally represents an interval of time of more than two and less than 12 weeks and the nature of the assets and the members is consistently at the upper end of the price/ quality and spending scale. Located in all the prime vacation settings (beachfront, mountain, leisure resort, vibrant metropolis), PRCs offer luxury apartments and freestanding houses, combined with a lifestyle element, including services such as pre-arrival and on-site concierge, private lounge, daily maid service, in home catering, etc.


Traditional Timeshare/Holiday Ownership – Traditional timeshare allows individuals to acquire a long-term interest in a specific property or range of properties. This interest is normally an interval of time that covers seven nights’ accommodation [or multiple of] in a particular accommodation type based on either a right to use or a right in rem (proprietary rights of ownership) that can be registered publicly.Because of the long-term nature of this model, the assets are normally subject to some form of protected legal ownership (e.g. a trust) so that the interests of the individual club members are protected for the life of their ownership.

Source: Resort Development Organisation and ARDA 2009

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The Shared Holiday Ownership Handbook is designed to support senior decision makers in both hospitality and real estate development companies. Whether you are an experienced shared ownership company or evaluating possible entry into the industry, we hope you find the tools and insights contained within this handbook helpful.

The Shared Holiday Ownership Handbook would not have been possible without the contribution of many in the industry. RCI would like to thank the following for their generous participation in this edition of the handbook:


Phillip Bacon Managing Director, HVS Global Hospitality Services

Simon Jackson Chief Executive, Macdonald Resorts Ltd

Piers Brown Founder,

Pete Jones Co-founder, Generator Systems

Denis Ebrill Executive Vice President, Club Meliá

Declan Kenny CEO, First National Trustee Company

Eric Gummers Partner, Howard Kennedy, International Lawyers

Paul Mattimoe President & CEO, Perspective International

Marko Hiltunen Marketing Director, Holiday Club Resorts

Richard McIntosh Managing Director, Hilton Grand Holidays EMEA

Howard C. Nusbaum President and CEO, American Resort Development Association (ARDA) Alex Radford Solicitor, Irwin Mitchell, International Lawyers Tayfun Sarman General Manager, Club Armonia Bodrum Evleri Preben Vestdam President, Valhalla Associates

The Shared Holiday Ownership Handbook is offered as a toolkit to senior leaders of hospitality and real estate development companies so that they can more efficiently evaluate opportunities in the holiday ownership, fractional and private residence club markets, and determine if shared holiday ownership is an appropriate addition to their business strategy. We also hope it serves as a useful reference tool for more experienced holiday ownership firms. It’s important to note that the content of the Shared Holiday Ownership Handbook is offered for illustrative purposes only, and that the information contained in the Handbook reflects general industry insights that may or may not apply to specific markets, project locations, product designs and business plans. The Shared Holiday Ownership Handbook should not be relied on as a replacement for project-specific feasibility studies, rigorous financial planning, consumer research and the support of qualified advisors – all of which are important contributors to successful shared holiday ownership projects. Financial model examples are based on historical observations and are not in any way a guarantee of future returns. All of that said, we hope the Shared Holiday Ownership Handbook helps to give you some ideas as to how shared holiday ownership can help to maximise the return on your asset investments and contributes to a successful entry into what is an exciting industry.

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“RCI will be with you throughout your resort development journey. Our team,

both in local markets and in the headquarters office, are there to support our

developers in every aspect of shared holiday ownership resort operation. Our lead generation efforts are centred on driving customers to your door; we invest significantly in listening to our members and delivering the service they want; we spend a great deal of time and energy on our web-based strategy. We are investing on behalf of our developers because we absolutely believe that our efforts will help to drive sales and ensure the maximum return on their


investment. When our developers win, we win.

Dimitris Manikis, VP Business Development, RCI EMEA


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Registered Office: Kettering Parkway, Kettering, Northamptonshire, NN15 6EY Registered in England and Wales. Company Registration Number 01148410 VAT Registration Number: GB 217 70 47 68 Regional Offices: Middle East: Suite 113-115, Building 10, Dubai Internet City, Dubai, United Arab Emirates. South Africa: The Core, Cnr Kikuyu & Leeukop Roads, Sunninghill 2157, Johannesburg, South Africa. India: Level 1, Pine Valley Block, Embassy Golf Link Business Park, Off. Intermediate Ring Road, Bangalore 560071, India.

Edition 1 EUC422

ECU422 Shared Ownership Brochure FINAL.indd 52

06/01/2012 10:18

RCI Shared Ownership Guide test  

Guide on shared ownership.