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Philippe Bourguignon: “If you Richard McIntosh: “When Mary Ann Pulé: “I want to
put green activists together with somebody purchases a bring my experience as a
regular operators, you can come timeshare their brand developer to the marketing
up with new ideas” PAGE 26 loyalty increases” PAGE 22 arm of my business” PAGE 28

VENTURES
Enterprising ideas for the vacation industry

QUALITY MARKET
July 2008

HOW MADEIRAN DEVELOPERS


ARE MAKING THE MOST OF
THE MIXED-USE CONCEPT

TOTAL TURNAROUND
MACDONALD RESORTS’
STRATEGY FOR SUCCESS

LYING IN
THE LAP OF
LUXURY
HOW FRACTIONALS CAN HELP YOU
REST EASY DESPITE RECESSION
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VENTURES MAGAZINE SERVING RCI’S MARKETS IN


JULY 2008 EUROPE AND THE MIDDLE EAST

CONTENTS EDITORIAL
In opening this issue of RCI Ventures
with my first editorial, I’d like to say that
I could not be happier with my decision
to join this industry and Group RCI.
In the three months I’ve been with
the company much of my time has
been spent travelling to meet as many
of our affiliates and clubs as possible,
as well as my colleagues from across
the Wyndham Worldwide family of
Cover picture courtesy of Regency Resorts
companies. And I have to say, everyone
I’ve met with has confirmed my belief
4 MARKET OUTLOOK: that this is an industry of great people with exciting new ideas and a
A news and views round-up from Europe and the Middle East genuine passion for their product. I’m very much looking forward to
meeting many more of you in the coming months.
10 COVER STORY – THE FUTURE IS FRACTIONAL: I believe that, as a service organisation, people are our greatest
How luxury fractional resorts are beating the economic asset. It is the engagement of our people with our Customers – our
recession by providing an efficient alternative to wholly-owned affiliates and clubs, and our members/your owners – that plays the
holiday properties major role in creating success for all of us.
Given my commitment to people and providing them with the
16 MARKET REPORT – A QUALITY MARKET: tools to deliver service excellence – whether our own Guides or the
The island of Madeira has long been an exponent of mixed-use staff throughout our affiliated resorts and clubs – I’m especially
resorts, where the benefits extend beyond lead generation pleased that this issue carries a feature on our call centres, with a
focus on our Cork operation. This article, on page 8, gives an insight
20 ALL CHANGE FOR TATOC: into the scale of our operation and the ways in which we hope it’s
The Association of Timeshare Owners Committees (TATOC) is helping affiliated resorts and white label clubs to grow their
looking to the future with a rebrand and the launch of a resort revenues.
accreditation scheme
Driving revenues for our affiliates and clubs is obviously key to
our success and Group RCI is continuing to invest in a number of new
22 HILTON’S TIMESHARE HIGH:
products such as its Rental and Exchange programme, Owners’
Hilton International Grand Vacations Company is gearing up for
Exchange Club and The Registry Collection to do this. It was with
major expansion into Europe and the Middle East
interest that I read in the cover story on page 10 that the fractional
product has out-performed the wholly-owned luxury leisure real
24 TOTAL TURNAROUND:
estate market in the US.
An insight into the strategy that helped Macdonald Hotels &
Resorts rejuvenate its ailing timeshare operation I firmly believe this product can do just as well in Europe and the
Middle East and, clearly, so do the affiliates and associates of The
26 INVESTING IN SUSTAINABILITY: Registry Collection who have contributed to this feature. We are
Delegates at a WTTC summit learned why the hospitality working hard to encourage new entrants into the luxury segment of
industry needs to take a greener approach to business our market to expand its geography and portfolio.
On page 24, Simon Jackson of Macdonald Hotels & Resorts
28 MAP – THE NEW MERCHANT OF VENICE: shares the truly inspirational story of his determination to build a
Mary Anne Pulé is dipping her toe in the developer water by successful timeshare business out of a failing operation. This brings
taking timeshare to the canals of Venice. me back to my opening statement that the best things about this
industry are its people. Simon’s story shows what a big difference
30 WEATHERING THE STORM: the passion and drive of a fine leader and a good team can make to
RON HOWELL, sales director of HMC Funding, reveals why the industry.
timeshare is well placed to beat the economic blues There are very many people in the business who share that same
faith in their product and a commitment to quality. My initial feeling
from those I’ve met is that the will is there for us to work together to
VENTURES is published by Group RCI, Kettering Parkway, Kettering, Northants, NN15 6EY, United
continue to develop a dynamic timeshare market.
Kingdom. Tel: +44 (0)1536 310101. Fax: +44 (0)1536 314682. Email: ventures@europe.rci.com I’m looking forward to working with my Group RCI colleagues and
EDITOR: Helen Foster. ASSISTANT EDITOR: Sarah Lee. DESIGN: Richard Blaney. PRODUCTION
EDITOR: Sarah Young. PRODUCTION CO-ORDINATOR: Claire Williams. ADVERTISING SALES: affiliates to ensure we play our part in reaching that ultimate goal.
Media Line Ltd. Tel: +44 (0)870 250 8701. Repro: JP Repro. PRINTING: CKN Print Ltd. Madeira
picture courtesy of Digitalrailroad. Original articles and contributions may be reproduced or
transmitted only with written permission from the publisher. No responsibility is accepted by RCI Sincerely
Europe for any losses or other consequences resulting from advertisements or other material
appearing in this publication. RCI Europe reserves the right to accept or refuse advertisements at
Jonathan Back
its discretion without assigning any reason for doing so. © RCI Europe 2008. Managing director, Group RCI UK and RCI Europe

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Marketoutlook
A R O U ND - U P OF I ND U S T R Y N E W S , V I EW S , A ND P E O P L E T O W ATC H

An artist’s impression of
Gran Meliá Palacio de
Isora, which boasts one
of Europe’s largest
swimming pools. Inset
left: Alain Grangé

members via various outbound


campaigns.”
The latest SMVC European
resort launch is Gran Meliá
Palacio de Isora in Tenerife,
which opens this summer. The
SMVC SEES PROFITS SOAR 600-room complex will initially
operate 140 one- and two-
INDUSTRY: Now in its fourth Puerto Rico. has been key to SMVC’s bedroom club units.
year, Sol Meliá Vacation Club Alain Grangé, chief executive success. Together we benefit The resort is affiliated to
(SMVC) has unveiled major of SMCV, said: “We’re extremely from synergies in marketing, Group RCI and Dimitris Manikis,
revenue and profit figures, and proud of the fact that SMVC has sales, products, operations, vice president of global business
plans for further expansion. made a substantial strategic financial strengths, customer development for the company
The company reported and financial contribution to the loyalty and brand recognition.” said: “The Palacio de Isora is a
revenues of more than $130 Sol Meliá group during its short Grangé also recognised prestigious affiliate property that
million and in excess of $50 time in business.” SMVC’s relationship with Group will boost the industry’s profile
million in net profits for 2007. Grangé believes being part RCI, which handles many of the in our heartland by delivering a
This year looks set to be another of the wide family of Sol Meliá club’s back office operations. high level of hospitality and
banner year, with a revenue and Hotels & Resorts has He said: “Group RCI has luxury holiday experience.”
profit increase of 22 per cent in contributed to SMVC’s success. been a contributor to our Commenting on Sol Meliá’s
the first quarter compared to the He added: “We have a fantastic success by providing highly- entry into the market, Grangé
same period in 2007. corporate team of only 30 effective, customised said: “It was a big step for Sol
In addition, the company – people with the right ‘glocal’ membership servicing. Meliá to enter its brands into
part of Sol Meliá Hotels & mission and vision. “This programme gives the shared ownership industry
Resorts, the world’s largest “SMVC has benefited from SMVC members a one-stop with SMVC, but their joint values
resort hotel chain with more the unwavering support of Sol shop, answering inquiries about and commitment to both
than 350 hotels in 30 countries Melia’s chairman, D Gabriel membership options, making product and the market have
– has revealed plans to open Escarrer Julia, who immediately reservations for SMVC resorts, deservedly paid dividends to
new resorts in Tenerife, the understood the importance of Meliá hotels worldwide, and everyone involved, not least
Dominican Republic and SMVC to Sol Meliá. That support proactively reaching out to SMVC members.”

NEW CHAIRMAN FOR OTE


PEOPLE: Richard McIntosh, at OTE’s annual conference, to be him over the next two years.”
managing director of Hilton held this year in Madrid. Commenting on his new role,
International Grand Vacations Paul Gardner Bougaard, chief McIntosh said: “As chairman of
Company, has been appointed executive, said: “The OTE board is OTE, I will become the figurehead
chairman of Organisation for delighted that Richard has agreed to for the timeshare business in
Timeshare Europe (OTE). take on the OTE chair. He brings Europe. This will be the first time a
His period of office will start in with him a wealth of experience in global hotel brand has stepped up
October this year, when the the timeshare industry, together and said it’s happy to say it’s in the
current chairman, Denes Pieke of with the prestige and perspective of timeshare business in such a public
Holiday Club Hungary, will the Hilton brand to our organisation. way. It will be good for Hilton and
officially hand over the leadership We look forward to working with good for OTE.” Richard McIntosh

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EVENTS PROFILE
GLOBAL HOSPITALITY INDUSTRY RCI MIDDLE EAST HOSTS LRIC09
Investment opportunities in the Middle
LEADER APPOINTED PRESIDENT East’s shared-vacation ownership
AND CEO OF GROUP RCI market will be on the agenda at the
third annual Leisure Real Estate
PEOPLE: Former president of the North American Division of Investment Conference (LRIC09).
Starwood Hotels and Resorts, Geoff Ballotti, has been named The conference, organised by
president and CEO of Group RCI. RCI Middle East, will be held in Dubai,
Stephen P Holmes, chairman and CEO of Group RCI’s parent Geoff Ballotti at a venue yet to be decided during late
company, Wyndham Worldwide, said: “Geoff has a sterling reputation and an impressive January next year.
track record of accomplishment. Over the past 19 years, he has performed roles in real estate It will focus on Dubai’s new shared-
development, travel distribution management and multi-brand hotel operation, all of which ownership legislation and how this has
make him the ideal candidate to lead our global vacation rental and exchange business.” been a catalyst for a $1 billion industry.
Ballotti’s career has seen him working out of Milan, Rome and Brussels in various It will also offer legal advice on how to
leadership roles. At Starwood he was appointed to run its largest operating division where he structure shared-ownership resorts
led a multi-branded portfolio of 450 hotels with 65,000 associates and system-wide revenues and feature leading brands such as
in excess of $10 billion. Wyndham, Hilton, Sol Meliá and IFA
Before entering the hospitality industry, Ballotti, a Harvard graduate, worked for the Bank Hotels & Resorts, highlighting the
of New England in corporate and commercial real estate finance. benefits of adding timeshare and
Commenting on his new role with Group RCI, he said: “It was the people and leadership fractionals to mixed-use resorts.
reputation of both Group RCI and Wyndham Worldwide that attracted me to the company. The For more information on both the
diversity of the Wyndham Worldwide business model is exciting and I am looking forward to venue and date of the event, email
being part of the high-energy senior management team.” Cassie Curtis on cassie.curtis@rci.com
or tel: +971 4390 1668.

EXPANSION DRIVES NEW CLC POSTS


INDUSTRY: Club La chairman, said: “I now Diamond Resorts,
Costa Resorts & have every confidence 19 years ago. LEISURE REAL ESTATE MASTER CLASS
Hotels’ (CLC) buoyant that George’s Eran Revivo, UK Scottish Development International (SDI)
expansion strategy has thorough and astute sales and marketing is presenting a valuable networking
created two major new knowledge of the director said: “CLC is opportunity for resort developers and
management roles. business will pay huge always searching for landowners, looking to capitalise on all
George Robertson, dividends in the very proven industry talent Scotland has to offer in the way of an
Roy
who joined CLC in exciting Russian and in Claire we have Peires exciting and diverse holiday destination.
2003, is promoted to marketplace.” someone ideally On October 2, SDI will be hosting a
managing director, Claire Westhead, qualified.” Leisure Real Estate Master Class. The
Russia. He will further former managing Westhead event will be sponsored by Group RCI
develop CLC’s rapidly director of Prime commented: “No one and present an overview of the market
expanding Eastern Overseas Property, a in the industry can potential. It is designed to signpost the
European operations CLC subsidiary, now have missed Club La way into the timeshare and fractionals
for both timeshare joins the parent Costa’s impressive business for new entrants, and experts
George
and real estate sales. company as deputy and dynamic Robertson will be on hand to offer advice on
CLC currently has UK sales and development. This is a matters such as legals and funding. It
two Russian sales marketing director. company that really will also provide established developers
offices in Moscow and Westhead has a delivers.” with the opportunity to meet with
Krasnodar with 250 wealth of industry CLC is currently on landowners to discuss the potential of
staff. Plans are in experience having a recruitment drive to entering into joint venture projects.
hand to open new joined LSI, which further its expansion For more information, contact Lorna
offices in the country. became Signature and plans across Europe Claire Macmillan tel: +44 (0)141 228 2588 or
Roy Peires, CLC then Sunterra, and is and beyond. Westhead email lorna.macmillan@scotent.co.uk

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Marketoutlook
A ROUND-UP OF INDUST RY NEWS FROM THE M I D D L E E A S T

Above left: The Nassima Tower. Above: Pictured from left, Geoff Ballotti, president and
CEO of Group RCI, with Shafi Syed of RCI Middle East, Nabil Al Khaled of ACICO and
John Paul Nichols, president and managing director, Group RCI EMEA.

John Paul Nichols, president and managing director,


ACICO MOVES INTO SHARED OWNERSHIP
Group RCI EMEA, left, with Umar Mian of VH Dubai. INDUSTRY: Aerated Concrete Industries Co (ACICO) is set to launch its first shared
ownership property after affiliating Nassima Tower to RCI Middle East.
FRACTIONALS TAKE The company expects to complete the development of the tower, which is in the
World Trade Centre district of Dubai, in the fourth quarter of 2008.
OFF AT THE PALM The 50-storey tower, located five minutes from Dubai International Financial
INDUSTRY: VH Dubai has signed an affiliation Centre, will appeal to business and leisure travellers, and will have units ranging
agreement with RCI Middle East committing from one- to three-bedrooms.
more than 50 luxury apartments at the Palm The Kuwaiti construction pioneer has expanded its presence in the Gulf
Jumeirah to the deal. Corporation Council, however Nassima Tower is its first move into shared ownership.
Owners will also buy into the VH Residence Nabil Al Khaled, ACICO deputy general manager for business development said:
Club, in the first fractional offering of its kind by “Dubai is becoming unreachable for many, with ever-increasing hotel rates proving
VH Dubai in the Emirate. a deterrent for return visits. The shared-ownership model allows for flexibility in
Since its debut in 2007 VH Dubai’s occupancy accommodations and for visitors to enjoy this world-class city from one of the best
levels have averaged more than 90 per cent and locations year after year.
the company has achieved unprecedented “We chose the Group RCI exchange programme because it has the products and
services that will help make our project a success.”
growth in its opening year of operation.
Nick Turner, managing director of RCI Middle East, said: “ACICO will bring some
Nick Turner, managing director of RCI
extremely high-quality products to this market and we are very proud to be affiliated
Middle East, said: “VH Dubai is offering the
with this group for its first foray into this exciting industry.”
chance to own a portion of this idyllic eighth
wonder of the world at a fraction of the cost of
buying outright. We are pleased to be aligned IFA SIGNS TO THE REGISTRY COLLECTION
with them on this project and to provide global INDUSTRY: IFA Hotels & Resorts has the Palm Jumeriah, Dubai, and Zimbali in
services and benefits to future VH Residence affiliated the IFA Collection Club to The South Africa will be added to The registry
Club owners.” Registry Collection, Group RCI’s luxury Collection.
Umar Mian, CEO and managing director of exchange programme. Nick Turner, managing director of
VH Dubai and the VH Residence Club said: “Due The agreement, signed at the RCI Middle East, said: “We are pleased
to the thriving interest and intrigue surrounding Arabian Hotel Investment Conference, in to be associated with IFA on its ground-
Dubai, guests are attracted to this stunning Dubai, is the first for IFA, encompassing breaking venture. The programme
location at exponential rates and our unique a wide variety of shared-ownership and wraps many elements of leisure real
offerings have been excellently received.” leisure real estate products. estate ownership under one roof, from
The affiliation will give IFA Collection timeshare and fractionals to high-end
Club members access to the prestigious whole-ownership real estate.”
VENTURES NEWS ONLINE developments in The Registry Collection. Piaras Moriarty, IFA Hotels &
Can’t wait for the next issue of Ventures to
Properties within IFA’s portfolio, including Resorts vice president vacation
find out the latest industry developments?
Pine Cliffs, in Portugal, the IFA Yacht ownership, said: “We picked The
Stay up to date by checking out the
breaking news section on the new and Ownership Club in Cannes and Dubai, Registry Collection because the IFA
improved rciaffiliates.com and future resorts such as the Palm Collection needs a brand of extremely
Residence and the Kingdom of Sheba on high quality to match it.”

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GroupRCInside
I N F O R M AT I O N E X C LU S I V E LY F O R G R O U P R C I A F F I L I AT E S

A better way
Group RCI is set to launch an exciting new feature on RCI.com that able to select their perfect holiday up to 18 months ahead.
will make its members’ search for their ideal holiday faster and Andrew Hill, manager of online services for Group RCI, said:
more fun. “This more transparent delivery of product means members can
As a result of significant investment, research and development find holidays in the right place, at the right time, and even for the
work, Group RCI’s enhanced search tool has turned the process on right reasons, whether lying on a beach or indulging in more
its head. energetic pursuits.
Instead of beginning the search with resort and holiday criteria “Initial introduction of this improved search methodology in the
and waiting for a certain number of results to come back, the US has demonstrated increased levels of search usage, growth in
member can now start with a global, mapped view of all accessible visitor engagement on the website and a healthy level of positive
inventory and filter down to the resorts most suitable for their member feedback.”
holiday needs. The enhanced search tool allows members to Below is an annotated screen shot which highlights some of the
search for resorts close to the destinations they plan to explore new features of the enhanced search facility for Group RCI
and find resorts offering the facilities they want. Search results can members.
be shown on a Google map or as a resort list.
The new programme will be rolled out across
Europe in multiple languages and members will be

More search
filters
■ Members can add or
remove selections to narrow
their holiday criteria.

Resort list
Shows available holidays based on the
search.
■ Click the resort ‘Name’ or ‘Resort ID’
link to access complete online resort
New map view listing.
■ Members can search by region, travel dates, ■ Click ‘Available Units’ to see all unit
price or holiday type. sizes and available check-in dates for the
■ Click a specific region for a detailed Google map. resort.
In areas with no availability, the map turns red. ■ Click ‘Read the review’ to read other
members’ comments on the resort.

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GroupRCInside
I N F O R M AT I O N E X C LU S I V E LY F O R G R O U P R C I A F F I L I AT E S

AT THE HEART OF this 24 hours a day, seven days a


week. However, most of our
developers’ business, in the same
way a terrific RCI Guide will

YOUR BUSINESS members choose to speak with a


Guide to talk through ideas and
positively influence it.”
To recruit the best possible
different holiday options.” people, Group RCI offers attractive
There are many ways in which Group packages and work environments
KNOWLEDGE IS KEY with great facilities, including a
RCI’s call centres drive business growth Guides are expertly trained to be gym at the Cork site.
for its affiliates and keep the customers knowledgeable about resort Training begins with an initial
locations and travel services such four-week ‘classroom’ style
satisfied. JUDI EVERITT looks at the work as flights, insurance and car hire. session, followed by eight weeks
of the company’s main call centre in Cummings added: “It’s our aim to on the job training, where a mix of
provide a one-stop-shop solution live calls and classroom training in
Ireland which services one of Europe’s for booking a holiday. It’s important geography, resort operation,
largest membership groups. our Guides know what is available customer services and sales,
and have the confidence to suggest alongside top performing Guides,
alternatives when necessary.” ensures the new intake is equipped
ust as a healthy heart is
J essential to the efficient flow of
blood throughout the body, an
Some 650 people work at the
purpose-built Cork site, which
covers an area of 10,300 square
Group RCI offers white label
clubs for some of its affiliated
developers. The customised
with the knowledge to help them
enhance customer satisfaction.
Geography training for Guides
effective call centre operation is metres and was opened in 1999. service features telephone includes:
vital in feeding the end business Of that number, 474 are Guides, greetings in the name of the ■ Educational trips to resorts to
with happy customers. and 60 are customer care company from which members sample both the product and area,
Group RCI’s largest call centre consultants. Eighteen European bought. Dedicated teams will which Guides then present to their
is based in Cork, Ireland, and is the markets are serviced from Cork, service some of the larger clubs, peers
first point of contact for the each in its own language. having undergone specialist ■ Developers visiting Cork to
majority of the company’s 450,000 training in the club’s product and present resort and destination
European members wanting to IT’S GOOD TO TALK resorts. attractions
arrange an exchange holiday. As As many as 2.4 million member Guide education and training in ■ A Global Guide Exchange
the start of the member journey, calls are forecast to go through the turn improves call response times programme whereby Guides
the call centre experience will call centre in 2008. Interestingly, in – a key factor in growing the exchange with peers in other
colour members’ feelings about times of ever-changing technology, business. Eighty per cent of calls to Group RCI call centres
the timeshare product. Cummings says the humble Group RCI’s call centres are ■ Weekly presentations, during low
This is exactly why the concept telephone – albeit a sophisticated answered within 20 seconds. call times, on resorts/areas visited
of ‘added value’ is of paramount and advanced system – remains Average talk time and call volumes by Guides on their holidays.
importance to Jeff Cummings, king. Feedback and the monitoring dictate staff scheduling. Cummings said: “Happy
director of operations at Group RCI. of booking confirmations has Cummings said: “Our call employees give exceptional
He believes the Cork operation proven that members prefer to centres around the world are the service to members. If Guides feel
could be more correctly described speak to an actual person. heartbeat of the business, confident with the product, they
as a contact centre. Staff at the Cummings points out that Cork generating revenue, fulfilling can fully service the calls. It’s
Cork site deal with inbound and is also a sales centre, its objective exchange, and supporting fee important for a member-servicing
outbound calls, as well as email being to ‘sell’ as many holidays as collection. organisation such as Group RCI to
communications from members. possible. Guides are charged with “We also supply member provide a stellar service to ensure
A customer services team is the personal responsibility of feedback to our resort services customers remain loyal. It’s down
also housed on site at Cork, discovering what the customer teams so they can source inventory to teamwork, and that includes
working closely with the tele- really wants from their holiday and in the right places. Our Guides’ our affiliate partners. We really
operators or Guides as they’re to sell them that experience. calls are monitored and their appreciate their cooperation and
known within Group RCI because Cummings said: “We training is continuous because a support.”
they guide callers towards the best encourage members to search discourteous manner or incorrect Cummings is proud to have
possible holiday experience. and transact online, as they can do servicing will negatively impact our succeeded in creating a truly

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WHAT THEY SAY


ABOUT GROUP RCI
Janet Doyle and Jeff Cummings are
constantly looking at ways to further “It is evident that Group RCI
improve member satisfaction and has invested considerable
increase transaction rates. time and resource in
producing this dedicated call
diversified culture within Group RCI. centre environment which
Guides from different countries are provides its members and
able to interact with their clients with a bespoke service
colleagues and learn about other catering for their individual
geographic locations and the Group RCI’s award-winning call centre in Cork requirements. There is clearly
inventory available in their areas. services members in 18 different languages. a philosophy of continual
This cultural diversity adds to the review allowing adaptation to
the ever-changing
positive experience when situation Doyle wants to change. requests an evaluation of eight key
circumstances they face. The
customers contact the call centre to She said: “We are trying to educate areas of their call experience. These
philosophy focuses heavily on
arrange holidays. He explained: members to call us directly, as a areas include Guide courtesy,
the staff and their
“We now have, for example, the personal call enables consultants initiative, resort and product
development, one of the key
ability for our Spanish Guides to to build a rapport and ensure a first knowledge, as well as an overall
factors in ensuring that clients
encourage Spanish members to time resolution to member queries. satisfaction rating. This information
receive the service they
exchange into Finnish inventory.” From March 2007, we switched to a is fed back to the Guide and their
demand.”
telephone response system team leaders. FAME was launched
Guy Mantel, Club La Costa
CARING FOR YOUR whereby the majority of in all markets and languages in
CUSTOMERS correspondence will be responded February this year.
“The folks in Cork have helped
In 2007, the Cork site received an to by phone and closed first time.” Developers are increasingly us as a resort and given me an
Employee of Choice recognition Before her arrival three years benefiting from the customer care opportunity to make new
award from the Irish Government ago, customer care consultants process through shared member friends. We spend hundreds of
and a Gold Award in the certified and Guides worked in separate feedback. Doyle has been visiting dollars to get someone to walk
Excellence through People divisions. Today, the two teams resorts in Spain, Tenerife and through our door and often
programme – Ireland’s national work closer together and, Portugal to assess the member ignore avenues that already
human resource management according to Doyle, “exchange experience and discuss how exist. The ability to work with
standard. Awards like this reflect regular feedback at all levels”. resort processes and those at Group RCI and specifically with
the importance Group RCI places For example, Guides now listen Cork can work better together. the call centres around the
on its staff, and how they provide in to calls made by customer She explained: “Opening up world has given us an
the customer with a positive care consultants so they can communication between us, opportunity to expand our
experience. hear for themselves the impact members and resorts is marketing efforts with a much
Janet Doyle is director of on members any Guide error important. Meeting with resort smaller investment per guest
customer care at the Cork site, may have. She said: “This has managers has been productive than our current programmes
where pre- and post-travel services proven very successful in helping and the feedback we have cost... truly a no brainer!”
are operated. Members can call to prevent a recurrence of the received is that they are looking Scott Merritt, Silver Lake
Group RCI’s help desk team with same mistakes.” forward to working more closely Resort
‘live’ travel problems, should they Group RCI is continually striving with us in the future.”
arise, and available services include to improve and perfect its call centre Recognising that its call
a 24-hour check-in to ensure the service to members, and thereby centre operation is the lifeblood of ON CALL
quick resolution of any difficulties developers too. FAME or Feedback business for its developers and Group RCI services
customers in 18 different
which the resort’s own from Automated Member Emails is itself, Group RCI is committed to
languages from six call
management are unable to solve just one example of innovation the continual enhancement of call
centres across Europe and
alone. Pre-travel also includes introduced to enhance the service. It centre services to bring even
the Middle East. Affiliates
advising members of pool or does this by ensuring members greater numbers of happy are welcome to visit. For
restaurant closures, for example. receive a system-generated email holidaymakers into its affiliated more details contact your
The majority of communications from Group RCI following each resorts – and to keep them going Group RCI representative.
come in written form, but it’s a transaction on their account, which back. V

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COVER STORY

‘‘
PEOPLE THAT HAVE BEEN CONSIDERING BUYING WHOLE
OWNERSHIP UNITS ARE STARTING TO ASK THEMSELVES
WHY THEY NEED A WHOLE HOUSE OR APARTMENT WHEN
FIVE WEEKS WILL DO RON HAYLOCK, BORGO DI COLLEOLI
’’

The future is FRACTIONAL


At a time when many economies are going into recession and the seemingly
inexhaustible flow of credit is drying up, the prospects for one leisure real estate
product are looking good. STEVE ADAMS discovers how the fractionals market is
proving resilient in the face of recession.

W herever you turn in the media, there are constant reminders


that the good times are at an end for the foreseeable future.
Inflation and interest rates are on the rise, credit is being squeezed
want different experiences and to discover more ways to make us
happy while we’re here. Fractional products can do that without the
expense and hassle that comes with life’s more exciting luxuries.”
and, to use an old English expression, ‘times is hard’. Stefano Tosato, below, managing director of fractionals-selling
Against this background, however, one sector of the leisure real resort Relais Villa Petrischio in Tuscany, Italy, a full affiliate of
estate industry seems to be showing a healthy resilience to the Group RCI’s luxury exchange programme The Registry Collection,
current financial meltdown. The fractionals market, in the US agreed that economic uncertainty could have a positive affect on
particularly, is flourishing despite – and possibly even because of – fractional sales.
the current economic gloom. He said: “Some buyers will certainly see fractional
According to a report by NorthCourse Leisure Real Estate ownership as a better and lower-risk investment than
Solutions, the consultancy arm of Group RCI, sales of fractional buying a wholly-owned holiday property. The fractional
properties in the US, Canada and the Caribbean hit almost $2 billion product requires a lower capital investment which will
in 2007 – an increase of 20 per cent on the previous year. During act as an incentive in the current economic climate.”
the same period, sales of vacation homes in the US declined by 30 Ron Haylock, chairman of fellow Tuscan resort Borgo di
per cent and investment home purchases by 18 per cent, according Colleoli, which is also fully-affiliated to The Registry Collection,
to the US-based National Association of Realtors. agreed the credit crunch was causing many to rethink their
purchasing decisions. “People who have been considering buying
ROBUST AND RESILIENT Peter Giamalva, left, president and whole-ownership units are starting to ask themselves why they
managing director of NorthCourse Advisory Services, need a whole house or apartment when five weeks will do,” he
explained: “The fractional product is clearly robust and set said.
to grow. It appeals to people who want to purchase leisure
real estate without the expense and aggravation of a wholly- LUXURY DIVIDENDS Owning something for a few weeks of the
owned second home, even though they can afford one.” year – as opposed to whole ownership – is the basic premise of
And in tough economic times, the managing of expenditure and the fractionals model and has been applied to everything from jets
the value of investments is more important than ever, according to and yachts to luxury cars, as well as real estate.
industry expert Piers Brown, founder of web portal Fractional Life There are benefits to buyers and sellers alike. The former are able
and organiser of Fractional Expo 2008 and other industry events. to purchase higher quality products than they might otherwise be
He said: “Given the credit crunch and economic uncertainties, able to afford or wish to maintain, while the latter can potentially
it’s clear that property values are far from guaranteed and enjoy increased profitability courtesy of a bigger and more
consumers are questioning the value of 100 per cent ownership of diversified market.
many luxury items.” The developer also benefits from a more cost-effective marketing
Brown also believes the current market conditions are and sales operation, as fractionals yield a higher profit per unit sold
prompting many people to reassess what’s important in their lives. than timeshare and, because the period of use being sold is far
He added: “We’re on earth for a finite amount of time and we longer, there are less sales to be made before the property is sold out.

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FRACTIONALS – THE FACTS


According to NorthCourse’s 2008 Annual Fractional Interest Report
for the US, Canada and the Caribbean, fractional sales in North
America increased by 20 per cent between 2006 and 2007, with total
sales volume reaching $1.98 billion.
Even though the growth rate slowed from the 32 per cent figure
seen in 2005 to 2006 – potentially due to a general downturn in the
economy – estimates showed “a continually strong growth in presales
which may be an indication that consumer knowledge and acceptance
of the product is increasing. Resales also saw significant growth – yet
another assurance to consumers that investment in a fractional
interest is very different than a non-equity club or a timeshare.”

1
2

3
4

While a fractional purchase remains a form of shared ownership,


when applied to leisure real estate it differs from many timeshare
arrangements in one very important way – it is a deeded purchase.
Giamalva said: “For most consumers timeshare provides their
annual holiday accommodation requirement. When you buy a
fractional, you’re looking to satisfy your holiday needs, diversify
your investment portfolio, and make a real estate purchase.”

BUYING HAPPINESS A fractionals purchase is always about more than


simply making an investment according to Brown, who was introduced
to the model through his own fractional super car ownership five years
ago and now sees it as the way ahead in the leisure real estate arena.
“Luxury is becoming more experiential – it’s not what you own,
but what you do that ultimately makes you happy,” he said. “In terms
of accommodation and holidays that means spa experiences, Fractional properties – and members of The Registry Collection – offer
championship golf courses, fabulous locations and adventure. In such luxurious accommodation. 1: The brick arches and oak beams at Relais
a market, fractional ownership can only gain momentum.” Villa Petrischio date back to the early 19th century. 2: Villa Petrischio
was built on the highest hill of Farneta in Tuscany. 3: Another unit
Brown’s optimism is reflected in the NorthCourse report, which interior at Relais Villa Petrischio. 4: Lunch on the terrace at Borgo di
suggests the resort industry is entering “a period of explosive Colleoli in Tuscany.

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COVER STORY
THERE’S A TRADITION IN
‘‘
EUROPE OF AFFLUENT PEOPLE
OWNING A HOLIDAY HOME – AND
THE FRACTIONAL MODEL JUST MAKES
IT ALL THE MORE PRACTICAL AND
EASIER TO ACCESS WARD WOODS,
REGENCY RESORTS ’’

growth” with the long-term trend likely to produce “dramatic


growth in the second-home real estate industry”.
The report states that fractional real estate is a niche lifestyle product
within this industry that serves the needs of two markets, and they are:
 Affluent clients who can afford a whole-ownership second home but
whose time constraints make it impractical. They want the use of a
second home for a few weeks each year but not the responsibility and A FRACTIONALS FUTURE Many industry
corresponding investment in an under-utilised asset. observers agree that there is a bright future for
 The less affluent client who aspires to the status and luxury of an fractional products beyond the established US
expensive second home, but can’t afford five-star quality. markets.
Optimistic forecasts and the identification of significant key markets For example, NorthCourse estimates the
will be music to the ears of developers of the 300 or so fractional fractionals market in the Middle East (ME)
properties currently dotted around the globe, as well as those seeking to will be worth more than £1.2 billion per
enter the industry, which remains in its infancy, especially in Europe. annum in sales revenue by 2020.
Nick Turner, managing director of RCI
EUROPEAN PROSPECTS Regency Resorts, based in Spain, is one Middle East, below, says the region is an
of only a handful of European resorts selling fractionals. Its fractional obvious choice for fractionals development.
property, The Regency Country Club, is an associate of The Registry “There are a lot of wealthy individuals
Collection and is located in southern Tenerife where the year-round who like owning portfolios of assets in the
season is a plus point. CEO Ward Woods, is convinced it won’t be ME. The product here is high-end and more
long before more European developers look to build a presence in likely to be sold and bundled in four fractions for $250,000 rather
the fractionals market. than one week for $10,000 to $15,000,” he says.
“The fractional model is bound to do well in Europe,” Woods “But there are obvious opportunities in desirable European
says. “After all, it already exists here – people have shared ski lodges destinations where it’s too expensive to own a whole
for years. property – Italy, France, Switzerland and so on. I also
“There’s a tradition in Europe of affluent people owning a holiday understand there are developers looking at fractional
home – whether it’s a cottage by the sea in Ireland or a bolthole in propositions in Scandinavia, East Europe and Russia.”
Brighton. It’s a traditional aspiration of most people and the fractional Woods agreed that Europe showed great potential, especially as
model just makes it all the more practical and easier to access.” many suitable properties were already in existence.
Giamalva explained the European market could be being held “Europe is full of high-quality exclusive boutique properties –
back by a lack of finance. Banks and other institutions, he believes, such as castles and chateaux in the UK, Italy, and Spain – that just
need to develop a greater understanding of the product to enable need to be structurally reconfigured and better managed,” he said.
consumers to finance their purchase. “The fractional model will support a small property with 30-40
He said: “The British, Germans and French can arrive in Spain or units because it guarantees management income and enables you to
even Bulgaria and get a loan on a wholly-owned second home – provide better services than if it was a struggling hotel.”
banks and financial institutions understand that. But there’s probably Haylock suggested fractionals were probably better suited to the
some education needed to get them to understand fractionals. It’s not traditional resort rather than urban location, but said a key element
like buying a week of timeshare. It’s a more formalised purchase, with was ease of access and travelling distance.
the opportunity for property appreciation and rental income which, He said: “I’m a little doubtful about whether it could work for long-
from the financial institution’s perspective, should carry less risk.” haul destinations. British people would be targeted for fractional sales in

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SUCCESS CHECKLIST
The NorthCourse report highlighted several I Base share size – the length of fractional sold
factors that influence the success of fractional at successful resorts tends to be larger. The
resorts, and among them were: median is six weeks which goes hand-in-hand
I Use plan – successful resorts are more likely to with longer high seasons
offer a rotating calendar or customised use plan I Maintenance fees – successful resorts tend to
I External exchange – fractionals affiliated to an have lower maintenance fees, indicating that
exchange programme such as The Registry price sensitivity is often based more on on-going
Collection are more successful cost than the actual purchase price. This is
I Unit variety – successful resorts have different especially true of the lower-priced fractional.
unit sizes and are more likely to have lock-off Allowing maintenance fees to spiral is one of the
sections biggest mistakes a developer can make.

7
5: The apartments at Borgo di Colleoli mix contemporary amenities
with traditional rustic charm. 6: Borgo di Colleoli is set in a 23-acre
estate in the Tuscan countryside between Florence and Pisa. 7: The
stone and marble designs and statues at Regency Country Club in
southern Tenerife are based on the exotic island of Bali.

5
6

Florida and US residents for European sales, but that would mean brought two major benefits to the sales deck. He said: “The
owners having to make two or three long-haul flights a year to use fractional product is high quality, giving clients who can’t initially
their allocation, and I think that would make people think twice.” afford it something to aspire to. We show all customers the fractional
With that in mind, Haylock said his marketing efforts would units so they know if they buy a standard timeshare they can
initially concentrate on the resort’s existing owners and rental guests. potentially upgrade. The quality aspect of the product also attracts the
He explained: “It’s very important for people to see the product best salespeople, which is a great benefit in a marketplace where
so we’ll be selling on site. We’ll target timeshare owners who want there is a sales skills shortage.”
to upgrade, as well as taking advantage of the high volume of rental While the timeshare link does help, Turner believed the nature of
activity we generate to the resort.” fractionals – where the title deed is part of the purchase – makes it a
good fit for marketers of real estate.
THE RIGHT SELL Woods said there was a natural link between “From a marketing perspective, it’s an easy transition from real estate
timeshare and fractionals – established owners were a perfect source to fractionals because if you’re an established real estate developer then
market for the higher-specification product, and resorts could you’ll have a good database of consumers who did or didn’t buy your
upgrade to make the offering without too much upheaval. whole-ownership product, which is great for offering either a less
“There’s no reason why a timeshare developer can’t get into expensive entry proposition or a better value property upgrade,” he said.
fractionals – I think it’s a natural progression,” he said. “Having Brown agreed, suggesting upscale estate agents were best placed
happy owners already in place is obviously a great help because you to sell the product. He said: “Fractionals have to be sold in the right
can upgrade and offer them a different type of product and access to way. It’s really important that they are clearly defined and different from
much better inventory.” standard timeshare. Transparency – particularly in pricing – is also very
Woods suggested a mix of timeshare and fractional properties important. It’s an upscale acquisition so the consumer understands

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COVER STORY
LUXURY IS BECOMING MORE EXPERIENTIAL – IT’S NOT
‘‘
WHAT YOU OWN, BUT WHAT YOU DO THAT ULTIMATELY
MAKES YOU HAPPY PIERS BROWN, FRACTIONAL LIFE
’’
8: Regency Country Club
in Tenerife offers five-
star luxury five minutes
from the popular resort
of Los Cristianos.

FRACTIONALS AND PRIVATE


RESIDENCE CLUBS
The fractionals market is made up of
two products – traditional fractionals
and Private Residence Clubs (PRCs)
– which operate in similar ways.
There are some fundamental
differences between the two,
however, and they are that:
I A PRC, generally, has a higher
specification of internal fixtures and
fittings and a unique location
I Fractional properties often operate
having to pay a premium for flexibility, and to a chosen property, but the possibility of being rental programmes so owners can
cover legal fees and the developer’s marketing able to exchange is great and is an excellent benefit from an income stream – a
costs. However, reputable operators understand sales proposition. Being able to whiz off to strong purchasing incentive
that greed is not a good driver and that there is experience other worlds and adventure I PRCs are seldom rented out,
most definitely a tipping point for consumers.” further afield adds an element of freshness to except for unsold developer
Turner added that the nature of the product the holiday home experience.” inventory. PRC management
also meant that marketing needed to be “high Giamalva added: “The reality is that it’s generally don’t facilitate or
quality and low volume”, putting the emphasis not just whether you enjoy the place where encourage rentals as owners don’t
on “opulence, luxury and exclusivity”. you purchase the first two or three years, but want transient renters wandering
The latter is a key element when further down the road – and it may only be around their property
marketing to potential fractional purchasers, once in a while – you might want to take the I A fractional property operates a
according to Woods. broader family with you and need more scheduled use plan agreed at the
He said: “The clients feel they’re a cut accommodation than you’ve got, or to do time of purchase. Weeks are typically
above the rest and want to go to properties something unique. The Registry Collection assigned through a rotating calendar
where they’ll be surrounded by people of a allows buyers to take advantage of their so the owner knows which weeks
similar mindset.” original purchase but offers a broader they will own five to 10 years in
Woods pointed out that offering spectrum of travel opportunities.” advance
membership to an exclusive grouping such Tosato agreed the exchange element I A PRC property allocates usage on
as The Registry Collection, an exchange provided an excellent additional benefit and a more flexible basis, using an
portfolio comprising Group RCI’s premier made “investment in fractional ownership annual or semi-annual reservation
properties – fits the bill perfectly. more attractive” to potential clients. system, guaranteeing three to five
Membership of The Registry Collection “Quality is key,” concluded Woods. weeks per year of use, allocating the
gives fractional owners the opportunity to “When spending that sort of money, the cash remainder on availability
exchange into some 120 luxury properties rich and time poor want to be assured of a I A PRC owner is typically a
across the globe and is a useful sales quality experience every time, wherever they high-end customer with little ability
incentive, according to Woods. holiday. After all, that’s why they choose to to plan very far ahead, so they value
“Most clients are primarily buying to visit buy a fractional in the first place.” V the greater flexibility.

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MARKET REPORT

A QUALITY MARKET
Mixed-use resorts are characteristic of Madeira’s
holiday offering, but KATHERINE STEINER-DICKS
discovers there’s more to this business model
than great lead generation opportunities.

I n the early 1980s, interest rates in Portugal


soared to 30 per cent. Achieving high
sales volumes became more important than
“With more than 20 years’ experience in
the timeshare sector, our philosophy of
integrating timeshare into our four- and
ever for Portuguese-based resort and hotel five-star properties has remained unchanged
groups wanting to develop and expand their over the years.”
operation at that time, as investment capital Madeira has been described as a small
became both tough and expensive to raise. corner of sub-tropical paradise in the
A solution was found in the timeshare Atlantic Ocean. It’s just a three- to four-hour
product. Hoteliers and resort developers flight from most European capitals. But,
discovered the integration of a timeshare more importantly for the timeshare sector,
element into their underlying business was Madeira is a holiday destination to which
a very effective means of raising money. It people return year after year. This fact has
soon became a staple part of the economic been a key driver, not just to Pestana’s
equation in the running of many hotels and timeshare client base, but to other hotels on
resorts, and Madeira’s Pestana Hotels & the island.
Resorts was the first of such groups to Cláudio Santos, director, Porto Bay Hotels
realise the significance of the financial & Resorts, said: “Madeira is a repeater’s
contribution to be made by adding a destination and, bearing in mind that our
timeshare operation to its activities. returning client rate in the hotel business is
Peter Booth, Pestana’s group managing around 30 per cent, the possibility of
director, who has been with the company offering our clients an interesting way to
since 1983, is as committed as ever to the holiday through timeshare was a clear
group’s timeshare business. Today its added benefit.” city resort hotel, Porto Santa Maria, in 2000.
mixed-use timeshare operation is fully According to Santos, timeshare sales Situated in Funchal’s Old Town, the concept
integrated into many properties in its represent approximately 10 per cent of of this property was to fuse the attributes of
portfolio of 85 hotels on three continents. Porto Bay’s €50 million total group revenue. a city hotel with a traditional beach resort.
Booth said: “Pestana was a pioneer in the The company’s strength has been in It’s an offering which is in high demand
Madeiran timeshare market. We sold our innovatively adapting its operation to fit among more mature visitors.
first timeshare in 1985 at the five-star Madeira’s mixed-use model. Porto Bay has In December 2003, Porto Bay Hotels &
Madeira Carlton Hotel. Currently we have transformed its business from a single Resorts opened Vila Porto Mare, which
16 timeshare resorts in Madeira and on the self-catering hotel business, launched with embraced its new fusion resort concept by
Algarve which are all affiliated to Group the opening of Suite Hotel Eden Mar in integrating three individually-themed
RCI, plus RCI Points products in Brazil and 1988, into a group of hotels including its properties offering very different holiday
Argentina. Our timeshare business five-star flagship hotel, The Cliff Bay. experiences – Suite Eden Mar, Hotel Porto
contributes 15 per cent to the group’s The founders and investors in the group Mare and The Residence – under a shared
operating profit and we have an ownership identified the demand for a more unique space allowing guests to access the great variety
base of 30,000 families. upscale offering and opened the innovative of services and facilities within the complex.

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QUOTE: WITH MORE THAN 20 YEARS’ EXPERIENCE IN THE TIMESHARE SECTOR, OUR
PHILOSOPHY OF INTEGRATING TIMESHARE INTO OUR FOUR- AND FIVE-STAR PROPERTIES HAS
REMAINED UNCHANGED OVER THE YEARS. PETER BOOTH, PESTANA HOTELS & RESORTS

A GOLDEN OPPORTUNITY
The small island of Porto Santo, known as the ‘golden
isle’, has about 5,000 inhabitants, most of them being
fishermen which gives the place a traditional feel. As yet, this
island is relatively undiscovered as a holiday destination. It lies 40
kilometres north-east of Madeira, pictured, and is accessible by boat or
plane. Known for its brown and yellow landscape, it has, like Madeira,
year-round sunny weather and up to nine kilometres of undeveloped
golden sandy beaches. Its Thalassotherapy spa centre is the perfect place
for visitors to pamper themselves, while it shares Madeira’s wealth of
active pursuits such as walking and surfing.

STRATEGY PAYS OFF willing to commit to this period of can’t control the brand image that is out on
With its impressive group of properties, ownership than a longer one. the streets with OPCs. We invest too much
Porto Bay management decided to integrate He explained: “Our strategy is to avoid in image and brand building to endorse
the timeshare element as part of its resales which would necessarily happen marketing practices that are uncontrollable.”
investment and revenue stream. But it has more often the longer the duration of Each hotel group has an opinion about
very specific timeshare strategies based on ownership. Industry data also shows that the which timeshare product and marketing
what is best for its business and target client percentage of unpaid maintenance fees strategy best supports its business model.
base. increases with longer periods of ownership, Pestana’s Booth said over the years the group
Santos said: “We sell a timeshare product so this way we avoid having to deal with has offered both fixed weeks in fixed units
with a 10-year leasehold because it gives that problem. It also lowers administrative and the points product. Fixed weeks and units
clients good legal protection for their costs and increases guest satisfaction.” have continued to be a popular option for the
ownership and it’s less bureaucratic than Santos said that Porto Bay’s management group in Portugal, where it builds a new
freehold.” decided not to use off-site personal contacts timeshare resort every three to four years.
Santos believes that a 10-year lease is the (OPCs) in sales. He said: “It’s just too much Booth added: “We are a traditional hotel
right duration because clients seem more of an invasive method for our taste, and we business that has branched out into

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MARKET REPORT

C An artist’s impression of the Pestana C The Pestana Porto Santo Hotel is


Promenade Hotel which, in the first Pestana Hotels & Resorts’ newly-opened
18 months of marketing, has beaten property which is set to come into
all Pestana’s previous sales records. timeshare later this year.

innovative products. And we’re one of the marketing plan that reaches a captive As the world’s financial markets were
few hotel groups that have evolved through audience staying in our hotels. We have PR beginning to feel the pressure from the US
new products, while still retaining a high desks in our hotel lobbies to promote our sub-prime mortgage crisis, Pestana boasted
quality, traditional hotel feel. We offer a full timeshare product to potential clients, and a record year for sales in 2007. “Already
range of products, from timeshare we use cocktail parties and excursion our sales for 2008 are matching those for
apartments to fractionals, full freehold programmes. the same period in 2007,” Booth reveals.
apartments and villas, and the latest model “Getting new sales is difficult, which is “Our pricing is competitive starting at
in hotel room ownership which we have why I think the hotel sector should look €5,000 for an entry studio property.”
launched in London with the opening of more seriously at this business. Hotel These impressive sales figures were
the luxury Pestana Chelsea Bridge Hotel.” operations have a readily available database helped by the launch of the Pestana
Pestana is not only innovative when it of quality leads. Promenade, a mixed-use property on
comes to integrating different products, “Seventy per cent of our sales come Madeira which is scheduled to open in
but also in bringing customers into its from in-house timeshare customers February 2009. This mix of 236 hotel units
overall service. The company charters a staying at our resorts – that figure rises to and deluxe timeshare apartments has, in
Boeing 737 and has been running weekly 85 per cent if you include lead generation the first 18 months of marketing, beaten all
flights from London’s Gatwick airport to from our hotels. Pestana’s timeshare Pestana’s previous resort sales’ records.
Madeira for 15 years, as well as taking seat customers tend to buy smaller properties In April the company also opened
allotments on other airlines flying out of initially, upgrading their accommodation Pestana Porto Santo, a five-star hotel on the
the UK. Pestana’s guests can also book when they see Pestana delivers what it island of the same name which forms
through its UK-based tour operator, promises.” part of the Madeiran archipelago. The
Atlantic Holidays. But how is Madeira’s timeshare market 300-room hotel is likely to launch
Pestana flies about 700 passengers a faring in today’s testing economic times? timeshare sales in the second half of 2008.
week into Madeira and they are a mix of Booth said: “Over the last 20 years the The project also includes 250 freehold
hotel and timeshare customers who are timeshare sector has been resilient to villas and apartments.
brought together in an environment where economic downturns as people always Pestana also offers financing to
word of mouth recommendations form a want, and often need, a holiday. And our customers, but Booth says that only
very persuasive method of marketing. timeshare product is a quality product at a 10 per cent take up the service, so it’s
Booth said: “We have an aggressive competitive price.” not a large part of the business.

SELECT SERVICE
RENTAL VALUES Santos admits that Porto Bay’s pricing may
According to Holiday Lettings, the approximate average rental values per week for a be more expensive than its competitors,
standard holiday home on Madeira throughout 2008 are: but it can prove that the high price reflects
2008 JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
the high quality of service.
Euro 377 300 322 302 307 314 322 322 311 307 310 337 “We do not centre the sales process on
the exchange system, although it has proven
to be an important sales driver,” he said.

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QUOTE: MADEIRA IS A REPEATER’S DESTINATION AND, BEARING IN MIND THAT OUR RETURNING CLIENT RATE IN
THE HOTEL BUSINESS IS AROUND 30 PER CENT, THE POSSIBILITY OF OFFERING OUR CLIENTS AN INTERESTING WAY TO
HOLIDAY THROUGH TIMESHARE WAS A CLEAR ADDED BENEFIT. CLÁUDIO SANTOS, PORTO BAY HOTELS & RESORTS

C Porto Bay Hotels & Resorts’ The Residence is C An interior of one of the units at The Residence,
one of three individually-themed resorts at the where timeshare is sold under a 10-year lease
Vila Porto Mare complex. and a higher price reflects the quality of service.

“Around 90 per cent of our clients are


from the UK and our average age is close MADEIRA – GROUP RCI PERSPECTIVE
to 45. Ovidio Zapico, Group RCI’s regional director, Spain,
“Families are certainly a segment that is Portugal, Italy and France, pictured, gives his view on
going to grow for us, because that’s where the qualities of the market in Madeira.
the saving for the consumer is more
impressive. People that can afford to pay “Madeira is an important “The very economic
extra for additional area, comfort and destination for us. It may climate which gave rise to
service are our ideal clients.” be a small island but the growth of timeshare in
Booth and his colleagues take customer
there are some major the 1980s – high interest
service seriously, so much so that they
industry players offering a rates and the ensuing
keep a database of guest comments that
goes back 20 years. If a customer makes a high-quality holiday onset of a credit crunch –
point of suggesting the pillows could be a experience to their is back with us today. resort, leisure real estate
little fuller, when they return the next year owners and our members. “Timeshare, in all its developer or hospitality
they can rest their heads on, you guessed “Our affiliates in forms, provides a great group.
it, a fuller pillow. “If you want to keep
Madeira and Portugal opportunity, not only for “As our associates in
your guests coming back, then you have
have led the way in real estate developers, but Madeira have discovered,
to ensure the service they receive gets
better with each visit,” says Booth. pioneering the highly for hoteliers as well, to timeshare models are an
The UK is Pestana’s primary source successful mixed-use continue to grow their excellent fit with the hotel
market, providing 65 per cent of resort model. Building on the operations through the operation, where the
visitors year-round. The Finnish comprise success of combining integration of alternative ability to market to hotel
15 per cent of visitors in the winter
hotel and timeshare models. There’s a lot of guests on site who are
season, the Germans 10 per cent year-
operations, they are now truth in the old proverb already familiar with the
round, the Scandinavians five per cent
during the winter, with other European taking a refreshingly that it isn’t good to put all resort is a big advantage.”
groups – French, Italians and Portuguese – innovative approach to your eggs into the one
at five per cent. mixing lifestyle and basket. ■ For more information
Booth concluded: “We’re fully experience offerings “With the wider range on timeshare in Madeira
committed to this business. I think many
within their resort of products now available, and Portugal, contact
in this sector aren’t, perhaps because
complexes providing an such as Group RCI’s Paula Rodrigues,
they’re not sure about it. We see it as a way
to build customer loyalty, which then exciting range of activities Rental and Exchange tel: +351 965628848
helps guarantee occupancy, which then and amenities for their programme, there is or email:
generates a family and eventually another guests. something to suit every paula.rodrigues@rci.com
generation of owners.” V

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TATOC REPORT

Almost two decades after it was formed,


The Association of Timeshare Owners
Committees (TATOC) is launching a
radical drive to raise its profile and
better serve both timeshare owners and
the industry. STEVE ADAMS reports.

All change for TATOC


ATOC was formed in 1989 and has long been Europe’s
T leading association for timeshare owners, as well as a key
industry lobbying group.
But much has changed in 20 years and at its annual conference
and AGM in March, TATOC leaders acknowledged that an overhaul
was needed. The event wasn’t entitled ‘Embracing Change’ for
nothing, explained chairman David Eastburn.
He said: “Since I became chairman, I’ve felt the driving need to Left, Harry Taylor with Group RCI’s Marj Anderson at the AGM. In
make TATOC more proactive, and in particular, the need to remedy recognition of the importance of working with timeshare owners,
the public perception of timeshare as generated by a hostile and Group RCI has appointed Anderson, resort services manager, as its
dedicated TATOC liaison officer. Right, David Eastburn addressing the
nearly always uninformed press. TATOC AGM.
“The perception is often strengthened by organisations which
purport to represent consumers’ interests, but in practice are only Taylor added: “The people who apply generally want to get
interested in making money out of the misfortunes of those who involved and have a voice and these are the people we want as
have suffered from scams. These people, who are outside of members!”
timeshare, continue to denigrate the industry. This serves only to But the most significant new initiative is the launch of a resort
devalue our holiday ownership.” accreditation scheme, which will see resorts undergoing a
In turning things around, TATOC has rebranded itself as stringent annual inspection in order to obtain the TATOC seal of
Timeshare Association (Timeshare Owners and Committees), or approval.
Timeshare Association for short. The inspection will, importantly, include the monitoring of
TATOC chief executive Harry Taylor, said: “The move was sales and marketing practices and standards of customer service.
necessary to portray the consumers’ overall satisfaction with their Taylor said: “If flying the TATOC flag over a resort means it’s
timeshare experience. being policed beyond the quality of the unit, then that’s what
“Our priority is to add credibility for the consumer and the we’re aiming for. We want people to be confident that the resort
media, and raise the profile of the industry. has sales ethics, a definite procedure for the resolution of
“We changed the name to make it more understandable and complaints, and so on.
easier to find through internet search engines. Some people know “It’s obviously very consumer-oriented which has earned a lot
what we’re about but many resorts don’t know what we do.” of interest and acceptance from the media, MPs and MEPs.”
In addition, TATOC’s constitution has been changed to extend Taylor said he hoped to have four resorts accredited by the end
membership to all timeshare owners, as opposed to merely of August and at least 10 by the end of the year. Resorts taking part
owners’ committees. will only have to pay to cover costs associated with the inspection
Taylor explained: “Our original remit was to work with visit and other administrative charges.
owners’ committees and that’s still very much the case. These “TATOC’s not a profit-making venture at this time,” he added.
member resorts represent more than 250,000 owners. However “The association will continue to be funded through sponsorship
increasing numbers of individual owners wanted to join from from credible companies and advertising in our magazine.”
resorts that are not members.” The organisation’s plans have met with widespread approval,
Taylor said individual memberships would cost £20 per year according to Taylor. “We’ve had a fantastic reaction from
and come with a package of benefits including legal and other developers and the industry in general,” he said. “Ultimately it’s
advice, a regular magazine and a membership card offering about the right to have a good holiday experience, and we’re all
discounts at a number of shops and other outlets. working to achieve that.” V

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BUSINESS PROFILE
QUOTE: “THE BIGGEST CHALLENGE IS THE FACT THAT OFTEN 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.” RICHARD McINTOSH

HILTON’S TIMESHARE HIGH


TEAM WORK: HIGVC The Hilton International Grand Vacations Company (HIGVC)
AND GROUP RCI
“Our relationship with Group RCI goes is set for worldwide expansion. GAYLE GREEN talks to the
back to the opening of our first resort,
man who will be taking the company from its Scottish base
Coylumbridge in Scotland, in 1980 in
our pre-Hilton days. towards growth in Europe and the Middle East.
“The Hilton Group took over the
properties in the mid-1990s and
Group RCI was chosen as an essential
element to be integrated into the then
W hen Richard McIntosh became country
club manager in 1985 at the
Craigendarroch timeshare resort in Scotland, he
offering which the new owners now plan to
expand further throughout Europe, the US, and
across the rest of the world.
newly-launched HIGVC. never dreamt he would still be there 23 years McIntosh is delighted by the prospect of
“Today, Group RCI operates a later as managing director of HIGVC. HIGVC’s international growth and is looking
number of our back office systems But that is exactly what he is and, forward to his new role.
from its Cork call centre, while our following a takeover of the Hilton Hotels He said: “I’m excited about the opportunity to
US-based sister company HGVC is Corporation by Blackstone Private Equity last grow our business now I have been given a clear
given the same support from Group autumn, he’s about to embark on a new remit to go out and do so. It’s a big challenge but
RCI’s US call centres. That support mission to help take the company’s timeshare it’s what I’ve wanted to do for a long time.”
includes the handling of some of our division worldwide. McIntosh will work alongside his colleagues
bookings and day-to-day running of Currently HIGVC – a Group RCI affiliate from the US to further the international
HIGVC’s business. operating timeshare lodges alongside its expansion plans, and says they are already
“One of the biggest and most traditional Hilton Hotels’ accommodation looking at new projects in Japan and Asia.
crucial areas of support we receive product at each of its resorts – has three Additions to the company’s timeshare
from Group RCI is in investigating and Scottish timeshare properties affiliated to the portfolio may not necessarily be in the form
identifying business opportunities. RCI exchange network. They are Hilton currently seen in Scotland and Portugal however.
Group RCI deals with a lot Craigendarroch, Hilton Dunkeld and McIntosh explained: “We will be looking at
of people across the Hilton Coylumbridge. business opportunities along various business
international hospitality HIGVC’s first venture outside models for the vacation club. It might be that
industry and its business Scotland came with the opening of a Hilton is the primary developer or we might
development team feeds us mixed-use resort in Vilamoura, look at things such as licence agreements and
leads which have proven to Portugal, last July, as well as a franchises similar to the model we operate in
be very useful. franchised operation in Sharm El Egypt, or even affiliations.”
“Having the ability to Sheikh, Egypt. HIGVC operates as part
Richard McIntosh
meet so many people, faces an exciting of the larger Hilton Grand Vacations MANAGING CHANGE
Group RCI works hard to new era in his career Club business, whose 46 resorts are McIntosh’s career, and the Craigendarroch resort
connect the right people as he is tasked with based predominantly in the US. itself, have seen many changes and challenges
expanding HIGVC
together to create operations over the past quarter of a century.
partnerships that will help throughout Europe A WORLD OF POSSIBILITIES Following a hotel management course at a
to grow the business.” and beyond, as well The combination of timeshare and college in Edinburgh, McIntosh, originally
as taking on the OTE
Richard McIntosh, chairmanship from luxury hotel product has clearly worked from Nairn in Scotland, joined a hotel chain
MD, HIGVC October this year. well for the Hilton group and it’s an in London and worked both in the city and

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in Holland. He then spent five years working timeshare arm of the business the attention it THE HIGVC PORTFOLIO
at a golf and country club in Exeter, where deserved and, in doing so, he proved that ■ Hilton Craigendarroch in Royal
he combined his hotel expertise with his luxurious hotels located next to timeshare Deeside, Scotland, comprises 99 lodges,
love of golf. lodges and apartments could be a winning plus a Hilton hotel with leisure facilities
But it was the move to Craigendarroch in combination. ■ Hilton Coylumbridge in Speyside,
1985 that introduced him to the timeshare arm He said: “The biggest challenge is the fact Scotland, has 61 lodges with an adjacent
of the industry. Having worked as the country that often hotel operators view timeshare as Hilton hotel with leisure facilities
club manager at the resort, he eventually joined competition, but we have statistics to ■ Hilton Dunkeld in
the timeshare sales and marketing team, show that when somebody purchases a Perthshire, Scotland,
becoming the resort’s sales manager before timeshare they go on to stay in the comprises 22 lodges
being appointed general manager overseeing company’s sister hotels more than and a Hilton hotel
both the timeshare and hotel operations. previously because their loyalty to the with leisure facilities
When the Stakis Group took over group brand increases. ■ Hilton Vilamoura
Craigendarroch in 1996, it brought with it “On average, occupancy at our as Cascatas Resort
two existing Scottish timeshare resorts, timeshare properties runs at 95 per cent- & Spa on the
Dunkeld in Perthshire and Coylumbridge in plus year round, so timeshare brings clients Algarve, left, became the first hotel
Speyside. It was only when the Hilton group to the group’s hotels throughout the year. In resort in Portugal to carry the Hilton
bought out Stakis in 1999 that the timeshare this way, the captive audience using our International flag when it opened its
and hotel operations at each resort were once combined site facilities automatically increases doors last year. Set in a four-hectare
again separated, with McIntosh being given a the spend into our hotels.” site, the mixed-use resort comprises 69
remit for the group’s timeshare operation, The takeovers have also been good for timeshare apartments, 69 residential
HIGVC, and the job of investigating a variety McIntosh on a personal level, enabling him to apartments, a five-star Hilton hotel, spa
of expansion opportunities across the globe. climb the career ladder. He added: “I’ve been and golf complex.
Given the number of takeovers and changes, really fortunate in being able to progress my ■ Hilton Sharm
McIntosh faced many challenges during the career throughout the changes within the Dreams Vacation
course of HIGVC’s development. He said: “The company and being able to keep my Club in Sharm El
biggest challenge with each takeover has been Craigendarroch base at the same time, while Sheikh, Egypt, right,
pushing to expand the timeshare side of the developing a strong, albeit small, team of offers 95 studio
business. The Scottish timeshare resorts brought colleagues.” apartments and
across with the Stakis takeover were given a very villas, spa and health
low priority. TAKING THE OTE CHAIR club.
“I was working for a company where the And there is soon to be a further
hotel operation accounted for 99 per cent of development in McIntosh’s business life.
business activities and so, inevitably, timeshare From October this year he is set to take on
was always going to get a low focus,” he said. the role of OTE chairman for a two-year Top of page, clockwise from far left:
“It was the same with the Hilton group period following the ratification of his non- External and internal views of Hilton
acquisition, because its leadership had no executive appointment by a meeting of the Dunkeld, a unit’s main living area at Hilton
experience of timeshare or understanding of its OTE Board at the end of May in a move that Coylumbridge, and bedroom, lounge and
true potential.” will be good for both the HIGVC and the swimming pool facilities at Hilton
McIntosh worked hard to give the industry body. V Craigendarroch.

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CASE STUDY
QUOTE: I HAD TO TAKE A LONG HARD LOOK AT THIS AND TOLD THE OWNERS THAT
WE WERE GOING TO CHANGE OUR WAYS. WE HAD TO LOOK AT OURSELVES, COME
CLEAN AND BE HONEST ABOUT WHAT WE HAD DONE WRONG. SIMON JACKSON

Just four years ago Macdonald Hotels & Resorts was considering the future of
its underperforming timeshare operation. Simon Jackson shares the strategy
that has turned around this division of the company with DINAH HATCH.

TOTALTURNAROUND

W
hen Simon Jackson became and the relationship was problematic and must be deliverable and within a standard
managing director at sometimes confrontational. time frame. The results of this resolution
Macdonald Hotels & Resorts in “We didn’t have a good reputation brought our owners back on board, and
2004, he was told the among the owners and lots of them wanted their response has been superb.
company’s failing timeshare to get out of the system. On top of that, the “Between 2005 and the end of this year
division was not performing well. The industry as a whole was suffering from a Macdonald Resorts and our owners have spent
choice was simple – turn it around bad period of press coverage and seen as a £15.5 million on improvements collectively
quickly or there may not be a future. world of scammers by the public at large. across all our resort sites. These improvements
Jackson was clearly the right man in the “I had to take a long hard look at this have gone down so well that owner
right place at the right time. His CV describes and told the owners that we were going to representatives are now saying they want to
someone who likes a challenge. He left change our ways. We had to look at spend more – which means we will too.”
thriving travel tour operator, Airtours Holidays, ourselves, come clean and be honest about
to join ailing Sunterra in the US which, at the what we had done wrong. We sat down HARD CHOICES
time, was in Chapter 11 bankruptcy. with the club committees and said ‘this is Jackson made other changes too. There was
So for Jackson, turning round how we have performed and this is why a reappraisal of resort staff as a result of
Macdonald’s nine timeshare sites – which there is so much discontent’. That’s a very which some had to be asked to leave. “There
the company acquired in 2001 after a hard thing for a company to do, but it was were tough decisions to make about long-
period of managing them for Barratt really welcomed by the owners’ standing members of staff who were not
International Leisure – it was simply a case representatives and opened up regular going to change,” said Jackson. “The resort
of rolling up his sleeves and starting again. communication between us.” management was quite unpopular for a
And the result was a business turnaround time, but these changes had to be made.”
that put smiles on the faces of the group’s top ENGAGING OWNERS He also went about tackling the issue of
management. After only a year on the project, A policy of engagement followed which saw staff training at all Macdonald’s timeshare
Jackson had achieved a break-even point for the introduction of quarterly resort and news resorts. Employees complained of never
the timeshare operation. Today the business is updates sent out to owners. Newsletters gave having received proper training and, in his
turning a multi-million pound profit. a breakdown of how owners’ money was view, had fallen into a pattern of “just
being spent, as well as news of services and making up how they did things”.
INVESTMENT AND COMMITMENT exclusive offers. Jackson introduced core standards and
Jackson took a year-by-year approach to the Jackson said: “We brought in pre-arrival induction courses which, he said, raised
task, starting with working out where things packs for owners and exchange guests that morale “massively”. Staff benefits were also
had started to go wrong. told them all about the resort they were implemented and included incentive
He said: “There had been no proper about to visit.” schemes such as awarding holidays and cash
investment in the product for many years A critical factor in the revival was vouchers to long-serving employees.
and the properties and public areas were in establishing an official resolution that no The refurbishment process and materials
a pretty bad state of repair. This had naturally actions should be promised to owners procurement was centralised by Jackson to
caused a great deal of discontent among the unless there was a certainty they would be enable the timeshare division to take
owners, who were paying an annual fee carried out. Jackson explained: “Lack of advantage of the Macdonald group’s wider
and, in their view, not seeing much for it. delivery was a big problem. We said that if supply chain to get better quality materials
There was little communication between the anyone committed money to a project of, at a reduced cost. He said: “Everything was
company and the owners’ representatives, for example, unit enhancements, then that being bought on a piecemeal basis, so we

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C Once owners at Macdonald Resorts properties could see their money C The newly-landscaped gardens of Macdonald Elmers Court
was being used to transform properties such as Macdonald Dona Lola Country Club in Hampshire, UK, top, and leisure facilities such as the
Resort in Malaga, Spain, top, and Garten Lodge at Macdonald Dalfaber pool area at the Macdonald Dona Lola Resort in Malaga, Spain, send
Golf & Country Club, Aviemore, pictured after recent refurbishments, a message to prospective purchasers and existing owners that these
they wanted to spend more on the maintenance of their resorts. are properties benefiting from healthy levels of investment.

said to our owners ‘let us tap into our group throughout, believing in the changes we because they fear the responsibility of the
hotel supply chain’. We buy wisely for the said we would make.” management fees and the difficulty in selling,
hotels, so why shouldn’t we do the same for During the past 18 months Jackson and should the need arise.
the timeshare properties? We then showed his resort operations teams have met on a “It’s time for the industry to change its
our owners what could be achieved by monthly basis with Group RCI’s affiliate ways at point of sale and change the way the
opening up a show lodge for them to view services managers to discuss how they can product is sold. For example, instead of selling
at Macdonald Dalfaber Golf & Country Club support the relationship with their mutual in perpetuity, perhaps we should be working
and then asked them if they wanted this customers. Jackson added: “Our Group RCI with a lease system for, say, 25 years or even
standard across the other resorts.” team has stood with us throughout the less. Some operators including Macdonald
Today the improvement in the whole process and continues to support us in Resorts do this, but does the public at large
Macdonald timeshare offering speaks for this way.” understand this type of product offering, or
itself. Eight of the group’s nine RCI-affiliated do they think it is just another scam? If it’s the
properties are RCI Gold Crown resorts, NO GAIN WITHOUT PAIN latter then we must act.
while the other has been awarded RCI Silver The picture looks good for Macdonald Resorts “While there are still older people who
Crown status. right now. But Jackson isn’t so sure things are can’t sell their timeshare when they need to
And this achievement has delighted as rosy in the timeshare industry at large. and don’t know which way to turn, is it any
Jackson. He said: “In achieving eight RCI He said: “Along with altering public wonder the consumer perception of
Gold Crown resorts and an RCI Silver Crown perceptions about the timeshare product, timeshare is so negative?
award across our nine RCI-affiliated which are still hugely negative, the industry “The industry as a whole must come
properties, we had some fundamental help. needs to address issues such as exit strategies. together to address these problems and face
The Group RCI team suggested I go for the “The number of people today who want up to them honestly and openly to give us
awards and when I chaired my first owners’ to get out of the system is huge. For instance, all a better future.
AGM in 2004, I knew they were right! the grown-up children of owners don’t want “The timeshare product is fantastic as
Group RCI has really contributed to our timeshares passed on to them, no matter how our thousands of owners tell us – so what
improvement and has supported us great a time they had there as youngsters, is the problem?” V

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EVENT REPORT
QUOTE: IF YOU PUT GREEN ACTIVISTS TOGETHER WITH REGULAR OPERATORS,
YOU CAN COME UP WITH NEW IDEAS. PHILIPPE BOURGUIGNON, VICE CHAIRMAN
OF REVOLUTION PLACES.

The Global Travel & Tourism Summit carried a hard-hitting message for the
hospitality industry on the urgent need to take a more environmentally-friendly
approach to business. HELGA LOVERSEED reports.

Investing in sustainability

O
‘‘ ver the last 20 years, our He said: “There is a new with regular operators, you can
message has been very generation of travellers out there come up with new ideas. In order
economics focused, but who are conscious of the to create a culture of innovation,
now we have to explain to environment, so we as an industry one needs to mix people from
the world that since travel and have to do more to respond to different industries and, if possible,
tourism is one of the major sectors, their needs. When going into a different nationalities.”
we have obligations that go beyond new market, we are mindful of Sonu Shivdasani, the founder of
our economic impact.” environmental jurisdictions and we The Six Senses Resorts & Spas,
So said Jean-Claude Baumgarten, are putting in standards for our suggested that a viable target for
president and CEO of the World franchisees to follow.” the hotel industry might be to
Travel & Tourism Council (WTTC), Sustainability, as it relates to the reduce its carbon emissions by 50
speaking at the recent Global Travel travel and tourism sector, embraces per cent by 2013. Gerald Lawless,
& Tourism Summit held in Dubai. the challenges of controlling executive chairman, Jumeirah
The summit was attended by pollution – witness the difficulties Group, pointed out the need for
more than 1,100 delegates from 75 of Beijing as it gears up for the more research data on which to
countries, including representatives Olympic Games – climate change, base a strategy: “We need facts and
from the timeshare industry. the alleviation of poverty, food figures so that we can address the
Delegates were tasked with shortages in developing nations issue – even if the numbers are not
identifying the major challenges which are also the emerging new what we would like to hear.”
facing today’s tourism and travel travel destinations, and establishing Airlines have come under attack
industry and the need to protect ‘green’ protocols for the for being among the worst polluters
the planet was one debate which construction of new builds. on the planet and Habib Fekih,
dominated discussions. Delegates heard that being able president for Airbus in the Middle
Geoffrey Kent, chairman and to balance economic growth with East, found himself having to defend
CEO, Abercrombie and Kent, set the stewardship of the planet will his company’s new A380 craft.
scene. He told delegates: “The dominate the travel and tourism He explained: “The A380 burns
question is no longer whether or agenda for decades. To achieve that less fuel per passenger per 100
not sustainable tourism works, but balance, some speakers believed the kilometres than older planes and it
rather how we can further the steps sector would have to forge links has very low emissions, both in
already taken towards addressing with groups that have traditionally terms of noise and CO2. Moreover,
climate change, nurturing – rather opposed it, such as human rights because of its greater capacity, the
than depleting – natural and advocates who have criticised labour A380 can carry lots more
cultural resources, and preserving practises in the tourism industry, passengers at one time, without
our heritage for the enjoyment of and environmental associations that airlines having to add slots.”
future generations.” have blocked resort developments. The debate made delegates C From the top:
Jean-Claude
The theme was also taken up Philippe Bourguignon, vice aware of the importance of Baumgarten.
by Stephen Holmes, chairman, chairman of Revolution Places, a addressing these challenges if they Geoffrey Kent.
president and CEO, Wyndham group of lifestyle resorts adhering are to preserve the greatest asset of Stephen Holmes.
Sonu Shivdasani.
Worldwide Corporation, to sustainable principles, said: “If their business – a healthy and Gerald Lawless.
Group RCI’s parent company. you put green activists together attractive environment. V Habib Fekih.

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DEVELOPER

MAP – THE NEW MERCHANT OF VENICE


Mary Anne Pulé, owner of MAP Destinations, will be drawing on more than 20 years of
when she turns developer for her next project which takes her to the canals of Venice.

T he industry is about to see the launch


of one of the most unusual timeshare
properties yet. Mary Anne Pulé has just
novel the concept, the easier it is to sell –
and we have had a number of sales
already.
She explained: “I have experience in
the Maltese market and I know the people
love to go abroad and to go boating.”
sealed a deal with Floating House, an “With this project, we wanted to step The next source market in Pulé’s sights
Italian company specialising in boating, away from the usual self-catering is the US, where MAP is already involved
to finance a timeshare operation based apartment. This is different from every in the marketing of the East Clare Golf
around a small fleet of custom-built other timeshare around – and it’s in a Holiday Village in Ireland. MAP also plans
luxury houseboats that will be moored in location where there isn’t much timeshare to turn its attention to the UK market.
the heart of the iconic Italian city of at all. Living on a boat in one of the The initial plan is to start with one
Venice. world’s most romantic cities will give our houseboat. However, since there are 10
Pulé, known to many as one of Malta’s owners a totally new and unique licenses available from the sales company,
foremost marketers, plans to unveil the first experience.” the long-term aim is to build up to this
of these vessels in March 2009. The product MAP, which is based in Sliema, Malta, number, giving MAP 500 weeks to sell.
will be marketed under the brand Venice on and has a staff of more than 100, will Pulé feels confident the success of this
Water, and Pulé is confident her Venetian promote the new venture primarily project will eventually lead to more
floating homes will appeal to a wide through telemarketing, bolstered by some licenses being made available.
market attracted by their unique appeal. advertising in the US. Even in these early The appeal of these luxurious floating
She said: “This is going to be a high- stages, Pulé and Alden have generated as apartments isn’t confined to boating types.
end and luxurious product. In fact, the many as 4,000 leads simply by contacting Anyone wanting to jump aboard can hire
timeshare weeks will sell for between people on the MAP database. their own skipper for an extra fee or can
€18,000 and €20,000 – a price that Pulé accepts customers may not want opt to learn the ropes in a couple of
reflects the year-round, high-season status to spend weeks on end floating around hours.
of Venice. the Venetian waterways, so a more flexible Pulé said: “If a customer can clearly
Pulé says initial interest in her approach has been adopted that enables pilot the boat and establish themselves as a
houseboats has been higher than customers to spend a few nights on the good skipper, there is no reason why they
expected, even before MAP started to water and a few nights ashore. can’t go further afield to explore the rivers
formally market the project. MAP’s sales Venice on Water is initially being of Italy. But for those wanting to stay in
and marketing director, Richard Alden, is marketed in Pule’s home territory of Venice, there’s lots to do. There’s the Lido
confident the first boat will sell out before Malta, a market she knows well and where and plenty of islands. We’re also planning
it even gets on to the water. she hopes her product will appeal to the to provide 25 itineraries to make it easier
Alden told RCI Ventures: “The more island’s 15,000 boat owners. for people to plan their routes.”

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experience in timeshare marketing


SARA MACEFIELD reports.

The houseboats, measuring nine by three with some people from Venice who had the
and a half metres, can accommodate up to licenses and were looking for a partner and ABOUT RICHARD ALDEN
six guests. The vessels will take four months we felt Venice would be ideal,” said Pulé. Richard Alden
to construct and are being purpose-built in Negotiations and completion of the legal is group sales
Malta. process has taken two years and is nearing
and marketing
The hulls will be fabricated from a light completion. With the project about to set
director for
aluminium which is more durable than sail, Pulé hopes this will be her stepping
other materials and is less expensive to stone to other development. MAP
maintain. The hulls have also been It’s an area where she feels she can use Destinations
specifically designed for the shallow waters her experience of marketing timeshare and has 12
of the Venetian Lagoon. resorts to her advantage. She added: “I know years’ experience in the timeshare
The craft will have two bedrooms with exactly what the client wants and needs.”
industry.
ensuite facilities – including a bath. There But the MAP managing director, who
will be a kitchen/galley and living area plus founded the company in 1986, is keen to In 1996 he was a sales
a sun deck outside. A separate cockpit will stress that this new direction will not affect manager at Anfi Beach Club in
house the boat’s GPS satellite navigation her existing operation in Malta, where she Gran Canaria, before moving to
system. markets some of the island’s most prominent Malta where he became sales
For Pulé, Venice on Water represents a properties.
manager for the Island Residence
long-held ambition to do her own thing and She said: “We value our developer
Club @ Radisson SAS Golden
she was spurred on by what she sees as the partners. Infact, our developers are very
lack of new timeshare developments in excited about adding Venice on Water to the Sands Resort & Spa.
Europe. overall industry portfolio of exchange In 2004 he joined MAP
She said: “As a developer, to build a resort options. They believe the more holiday Destinations, initially as sales
would cost millions, but I can invest in options our owners have, then the more director, following which he was
something like this for a fraction of that cost value they will get out of their timeshare
appointed to his present role.
and still be in control.” ownership.
Then it was a question of finding the “I want to bring my learnings and
right opportunity, and this came about experience as a developer to the marketing Top of page: These computer-generated
through Group RCI, which invited the MAP arm of my business, as it can only deepen images of the Venice on Water houseboats
illustrate the comfort guests will be able to
team to meet developers and view some my understanding of my developer clients enjoy while cruising around the waterways
potential timeshare projects in Italy. “We met and strengthen our relationship.” V of the Italian city. Far right: Mary Ann Pulé.

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RCI Ventures, July 2008 29
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FINAL CALL
QUOTE: FOR THOSE OF US THAT WERE AROUND IN THE LAST RECESSION, IT
WAS DURING THESE TIMES THAT WE SAW TIMESHARE FLOURISH. AND NOW THE
INGREDIENTS ARE IN PLACE FOR A REPEAT PERFORMANCE. RON HOWELL

RON HOWELL, sales director, HMC Funding,


has given some thought to how timeshare will
fare in these times of financial turmoil.
Against an economic backdrop of credit crisis,
rising interest rates and repossessions, he
evaluates the strengths of the industry.

WEATHERING THE STORM

‘‘
Well if we are to believe of a holiday home into a holiday benefits than
everything we read in the working asset, paying its own purchasing a second home. A
newspapers, we might as well way while still being there for wholly-owned property does not
close up shop and go home. But holidays. offer them the flexibility or
the truth is that the leisure The profile of the industry’s options of a timeshare and, with
industry, and I include typical customer gives it the current fall in house values,
timeshare in that category, is another advantage. Aged a full purchase no longer
far more robust and resilient between 40 and 65 years of age, guarantees a return on
than many people think. largely homeowners with good investment.
Of course some sectors are credit ratings, these customers Furthermore many property
being negatively impacted by are well insulated from the developers in these areas have
the current economic cycle, current financial crises. either stopped building or have
particularly the wholly-owned Expansion and growth in the developments under way that
second-home markets in Spain, timeshare industry has been remain unsold. ABOUT HMC
the UK and parts of the US. stifled in the last 10 years due It’s no surprise to see a FUNDING
The timeshare industry, on to the increased popularity of significant rise in these HMC Funding is one of
the other hand, is much more the whole ownership of holiday developments being the leading providers
diverse today than it was 20 homes, fuelled by soaring re-designated as fractional of financial products to
years ago and that will protect it property prices. It’s now developments and sold as customers, marketers
from the worst a recession can becoming very apparent, quarter, eighth, sixteenth and developers in the
throw at it. Products such as however, that in parts of the UK, shares or even holiday rentals. hospitality and cruise
fractionals, destination clubs, US, Spain and, to a lesser While this alternative strategy finance, timeshare,
mixed-use resorts and others degree, Portugal, property has merit, the difficulty for the fractional and whole
which comprise a combination prices are falling dramatically. traditional property developer ownership industries,
of hotel, whole ownership and This, coupled with the fact that will be finding the sales and across the UK, Europe,
timeshare have a great deal of many second-home speculators marketing expertise. This is North America, the
flexibility, both in terms of have suffered a reversal in their where the timeshare market Middle and Far East.
usage and on the financial front. fortunes and guaranteed rental can come into its own since it HMC Funding is a
Some of these products periods have expired, makes has the experience and partner of Clydesdale
come with the added bonus of the timeshare product and its expertise to capitalise on the Financial Services
belonging to established and cousins look like the more current climate. Limited, which is
professional rental and attractive deal. For those of us that were backed by Barclays
exchange programmes which In today’s climate around in the last recession, it Bank PLC, one of the
provide owners with options to consumers are likely to be was during these times that we UK’s leading financial
generate a rental income from much more amenable to saw timeshare flourish. And now institutions operating

’’
the unused time in their purchasing a timeshare product the ingredients are in place in the timeshare
properties. This turns the luxury with all its associated exchange for a repeat performance. market.

|
30 RCI Ventures, July 2008

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