Timeshare touts hotels

The vacation ownership industry is casting a greedy eye over the Middle East hotel sector, as major players enter into discussions to open timeshare resorts

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By  Sarah Campbell Published  August 3, 2005

|~|MVCI-PL-L.jpg|~|Timeshare resorts such as Marriott’s Playa Andaluza offer all the space and comfort of home.|~|If there is one sector of the hospitality industry that lives up to the overused term ‘home away from home’ it has to be timeshare. The concept of holiday ownership, buying a fraction of time in one resort, has undergone a roller coaster ride in the past two decades, but now seems to be enjoying global success, as international hotel chains embrace the US $10 billion a year industry. In total, there are 11 million timeshare weeks owned worldwide, with over seven million member families holidaying with timeshare each year. Timeshare resorts are now located in 100 countries worldwide, with 5,500 resorts now in operation, and enjoy an average global occupancy of 85%, whereas hotels have an average global occupancy in the mid 60%s. Not surprising then that this lucrative sector is now paying due attention to the burgeoning tourism sector in the Middle East. Traditionally, Egypt held the post as timeshare magnet of the Middle East, with over 70 resorts located on the Red Sea alone. However, all eyes are now on Dubai, as timeshare operators hope to cash in on some of the success being enjoyed by hoteliers in the emirate. “Dubai has all the ingredients: central location between Asia and Europe, great beaches, world class shopping, fine dining, and all the infrastructure and assets such as Dubailand. I believe this makes it one of the three super cities, so far as timeshare is concerned, rated along with Orlando and Las Vegas,” claims David Clifton, managing director of timeshare exchange company Interval International. Interval International represents more than 2,000 timeshare resorts in 75 countries, and has recently opened a Middle East office in the Dubai Airport Free Zone. Clifton, along with his counterparts from Resort Condominiums International (RCI), Marriott Vacation Club International (MVCI) and other timeshare developers, is currently in negotiations with the Dubai department of economic development (DED) to try and create timeshare legislation that will both protect the consumer and facilitate good business. “The government of Dubai has decided that it wants timeshare in Dubai but it also wants it legislated, to offer consumer protection and allow legitimate companies to grow their business. This will protect the market and bring in global companies,” Clifton explains. Overseeing the timeshare legislation is Ali Ibrahim, deputy director general, executive affairs, DED, who sees great potential for the growth of the timeshare industry in the emirate. “What we are trying to do is create awareness of the issues within the timeshare industry and in their dealings with customers. We are working closely with the private sector, taking into consideration the specific needs of the sector, while formulating the necessary regulations. In this way, we will ensure that timeshare vendors operate within an appropriate legal and commercial framework and that the investment of all parties, consumers, marketers and developers alike, is protected,” Ibrahim states. Some of the DED’s recommendations include unification of contracts, transparent operations by timeshare vendors and the provision of a ‘cooling-off’ period, during which the buyer has the right to change their mind about the purchase. The DED is also seeking to prohibit timeshare brokers from carrying out promotional activities or concluding any contracts via visits to private homes. While the legislation may seem stringent, international operators seem more than happy to play along, and are seemingly queuing up to enter the timeshare arena in Dubai. “We are witnessing the birth of the local timeshare market with companies coming forward to set up timeshare projects in the UAE,” Ibrahim declares. Several developments are already underway. IFA Hotels & Resorts is to develop a vacation ownership product on The Palm, Jumeirah. Set to be managed by hotel operator Fairmont Hotels & Resorts, the resort will offer 150 units and will be located next to the Fairmont Palm Hotel & Resort. “The vacation ownership product is integrated into the entire resort. All the facilities available to the hotel guests will be available to members,” explains Piaras Moriarty, director, Palm Vacation Club, IFA Hotels & Resorts. “It will be a family five-star resort, for Gulf and international families. All units will overlook the pool and gardens, and will have a sea view. We will offer one- to five-bedroom units, ranging in size from 100m² to 350m², so rather large, with a gourmet kitchen with granite tops, 42-inch plasma TV, Bose sound systems — you’re talking super exclusive,” Moriarty claims. IFA has not begun marketing the resort yet, but Moriarty is optimistic that once it is up and running, the resort will sell out fast. “We have had an overwhelming response from the market, with people asking us how and when they can buy. However, we are still finalising the pricing and the usage plan, so we can’t tell them, but this will all be resolved by late this year or early next. Our focus is on developing a product that is what the consumer wants, rather than rushing it.” IFA has chosen RCI as its exchange affiliate. RCI represents 3,800 resorts in over 90 countries, and is the world’s largest timeshare exchange network. The company recently shifted its regional headquarters from Cairo to Dubai, with a member services call centre now operational in Dubai Media City. RCI’s president and CEO for Europe and the Middle East, Preben Vestdam, is confident that timeshare will take off in a big way, and that Middle East travellers will see the sense in investing in the concept. “If it’s compared with freehold, and people are asking ‘Should I buy a villa on The Palm for vacation use?’ then the benefits are great. For holiday purposes, it provides access to higher quality and bigger units. It is a step between a hotel room and owning a free hold, so it is a much more cost effective way to get a higher quality holiday, and there are none of the hassles of ownership,” he says. Meanwhile, developers are also eying up timeshare possibilities at Dubai Festival City (DFC), located on the shores of Dubai Creek. A 300-apartment timeshare resort is planned and negotiations with potential operators are apparently well advanced. “We are in talks with a leading international hospitality operator to manage this large and specialised opportunity, which will be unique in its accessibility to our main Festival Centre retail and entertainment hub and its proximity to the magnificent water frontage of Dubai Creek,” says David Glanville-Williams, managing director, DFC. “Timeshare is now a crucial element of any destination claiming to serve the needs of the entire hospitality industry. Our aim is to deliver the most exclusive timeshare proposition in the region.” According to Interval International’s Clifton, the Dubai Creek proposal is a “superb location” and one that he has highlighted before to timeshare giants, Marriott Vacation Club International (MVCI), although whether or not MVCI is now considering DFC as an option is not confirmed. What is certain is that MVCI is still maintaining its number one slot in the timeshare hall of fame. The company currently operates 51 timeshare resorts worldwide. MVCI recorded timeshare revenues in excess of US $1.5 billion in 2004 and now boasts over 280,000 owners worldwide. MVCI has had a sales and owner services presence in the Middle East for the past ten years, although it has not opened a resort here yet. Its operations dovetail quite naturally with Marriott International’s lodging business in the region, so, as Marriott lodging expands, it is fair to expect regional growth from MVCI as well. “We are actively looking at opportunities in the market, as is the hotel side of the company. Between the two, if we see something that has an opportunity for one of us, then we will pursue that,” Ed Kinney, vice president, corporate affairs and brand awareness, MVCI, points out. “In recent years, the Marriott name has become much more prominent in the Middle East market and the destinations Middle East travellers go to. They associate Marriott with high quality and high services, and if you can add in a type of product like the MVCI villas, which are on average two- or three-bedroomed, which better suits this market, then it makes a big difference,” he claims. With Marriott considering its options, and a number of other unannounced projects under discussion, the timeshare sector in the Middle East looks set to mirror the phenomenal growth being enjoyed by its older sibling, the hotel industry. For RCI’s Vestdam, the sky really is the limit: “It’s a brilliant business model for Dubai when you think of the volume of real estate. In this region, in 10 years time, I can see there being an additional 500-1,000 timeshare resorts.”||**||

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