Académique Documents
Professionnel Documents
Culture Documents
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
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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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
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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.
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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.
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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
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RCI Ventures, July 2008 9
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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
’’
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1
2
3
4
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RCI Ventures, July 2008 11
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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 ’’
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12 RCI Ventures, July 2008
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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.
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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.
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16 RCI Ventures, July 2008
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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
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.
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RCI Ventures, July 2008 19
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TATOC REPORT
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20 RCI Ventures, July 2008
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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
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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
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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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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
‘‘
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.
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30 RCI Ventures, July 2008