RCI Ventures: July 2008

Philippe Bourguignon: “If youput green activists together withregular operators, you can comeup with new ideas” PAGE 26

Mary Ann Pulé: “I want tobring my experience as adeveloper to the marketingarm of my business” PAGE 28

Richard McIntosh: “Whensomebody purchases atimeshare their brandloyalty increases” PAGE 22

VENTURESVENTURESEnterprising ideas for the vacation industry July 2008July 2008

QUALITY MARKETHOW MADEIRAN DEVELOPERSARE MAKING THE MOST OF THE MIXED-USE CONCEPT

TOTAL TURNAROUNDMACDONALD RESORTS’STRATEGY FOR SUCCESS

QUALITY MARKETHOW MADEIRAN DEVELOPERSARE MAKING THE MOST OF THE MIXED-USE CONCEPT

TOTAL TURNAROUNDMACDONALD RESORTS’STRATEGY FOR SUCCESS

LYING IN THE LAP OF LUXURYLYING INTHE LAP OF LUXURYHOW FRACTIONALS CAN HELP YOUREST EASY DESPITE RECESSIONHOW FRACTIONALS CAN HELP YOUREST EASY DESPITE RECESSION

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RCI Ventures, July 2008 | 3

CONTENTS EDITORIAL

VENTURES is published by Group RCI, Kettering Parkway, Kettering, Northants, NN15 6EY, UnitedKingdom. Tel: +44 (0)1536 310101. Fax: +44 (0)1536 314682. Email: [email protected]: Helen Foster. ASSISTANT EDITOR: Sarah Lee. DESIGN: Richard Blaney. PRODUCTIONEDITOR: Sarah Young. PRODUCTION CO-ORDINATOR: Claire Williams. ADVERTISING SALES:Media Line Ltd. Tel: +44 (0)870 250 8701. Repro: JP Repro. PRINTING: CKN Print Ltd. Madeirapicture courtesy of Digitalrailroad. Original articles and contributions may be reproduced ortransmitted only with written permission from the publisher. No responsibility is accepted by RCIEurope for any losses or other consequences resulting from advertisements or other materialappearing in this publication. RCI Europe reserves the right to accept or refuse advertisements atits discretion without assigning any reason for doing so. © RCI Europe 2008.

4 MARKET OUTLOOK: A news and views round-up from Europe and the Middle East

10 COVER STORY – THE FUTURE IS FRACTIONAL: How luxury fractional resorts are beating the economicrecession by providing an efficient alternative to wholly-ownedholiday properties

16 MARKET REPORT – A QUALITY MARKET:The island of Madeira has long been an exponent of mixed-useresorts, where the benefits extend beyond lead generation

20 ALL CHANGE FOR TATOC: The Association of Timeshare Owners Committees (TATOC) islooking to the future with a rebrand and the launch of a resortaccreditation scheme

22 HILTON’S TIMESHARE HIGH: Hilton International Grand Vacations Company is gearing up formajor expansion into Europe and the Middle East

24 TOTAL TURNAROUND: An insight into the strategy that helped Macdonald Hotels &Resorts rejuvenate its ailing timeshare operation

26 INVESTING IN SUSTAINABILITY:Delegates at a WTTC summit learned why the hospitalityindustry needs to take a greener approach to business

28 MAP – THE NEW MERCHANT OF VENICE:Mary Anne Pulé is dipping her toe in the developer water bytaking timeshare to the canals of Venice.

30 WEATHERING THE STORM: RON HOWELL, sales director of HMC Funding, reveals whytimeshare is well placed to beat the economic blues

In opening this issue of RCI Ventureswith my first editorial, I’d like to say thatI could not be happier with my decisionto join this industry and Group RCI.

In the three months I’ve been withthe company much of my time hasbeen spent travelling to meet as manyof our affiliates and clubs as possible,as well as my colleagues from acrossthe Wyndham Worldwide family ofcompanies. And I have to say, everyoneI’ve met with has confirmed my belief

that this is an industry of great people with exciting new ideas and agenuine passion for their product. I’m very much looking forward tomeeting many more of you in the coming months.

I believe that, as a service organisation, people are our greatestasset. It is the engagement of our people with our Customers – ouraffiliates and clubs, and our members/your owners – that plays themajor role in creating success for all of us.

Given my commitment to people and providing them with thetools to deliver service excellence – whether our own Guides or thestaff throughout our affiliated resorts and clubs – I’m especiallypleased that this issue carries a feature on our call centres, with afocus on our Cork operation. This article, on page 8, gives an insightinto the scale of our operation and the ways in which we hope it’shelping affiliated resorts and white label clubs to grow theirrevenues.

Driving revenues for our affiliates and clubs is obviously key toour success and Group RCI is continuing to invest in a number of newproducts such as its Rental and Exchange programme, Owners’Exchange Club and The Registry Collection to do this. It was withinterest that I read in the cover story on page 10 that the fractionalproduct has out-performed the wholly-owned luxury leisure realestate market in the US.

I firmly believe this product can do just as well in Europe and theMiddle East and, clearly, so do the affiliates and associates of TheRegistry Collection who have contributed to this feature. We areworking hard to encourage new entrants into the luxury segment ofour market to expand its geography and portfolio.

On page 24, Simon Jackson of Macdonald Hotels & Resortsshares the truly inspirational story of his determination to build asuccessful timeshare business out of a failing operation. This bringsme back to my opening statement that the best things about thisindustry are its people. Simon’s story shows what a big differencethe passion and drive of a fine leader and a good team can make tothe industry.

There are very many people in the business who share that samefaith in their product and a commitment to quality. My initial feelingfrom those I’ve met is that the will is there for us to work together tocontinue to develop a dynamic timeshare market.

I’m looking forward to working with my Group RCI colleagues andaffiliates to ensure we play our part in reaching that ultimate goal.

SincerelyJonathan BackManaging director, Group RCI UK and RCI Europe

VENTURES MAGAZINE SERVING RCI’S MARKETS IN JULY 2008 EUROPE AND THE MIDDLE EAST

Cover picture courtesy of Regency Resorts

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4 | RCI Ventures, July 2008

SMVC SEES PROFITS SOAR

Richard McIntosh,managing director of HiltonInternational Grand VacationsCompany, has been appointedchairman of Organisation forTimeshare Europe (OTE).

His period of office will start inOctober this year, when thecurrent chairman, Denes Pieke ofHoliday Club Hungary, willofficially hand over the leadership

at OTE’s annual conference, to beheld this year in Madrid.

Paul Gardner Bougaard, chiefexecutive, said: “The OTE board isdelighted that Richard has agreed totake on the OTE chair. He bringswith him a wealth of experience inthe timeshare industry, togetherwith the prestige and perspective ofthe Hilton brand to our organisation.We look forward to working with

him over the next two years.”Commenting on his new role,

McIntosh said: “As chairman ofOTE, I will become the figureheadfor the timeshare business inEurope. This will be the first time aglobal hotel brand has stepped upand said it’s happy to say it’s in thetimeshare business in such a publicway. It will be good for Hilton andgood for OTE.”

PEOPLE:

NEW CHAIRMAN FOR OTE

A R O U N D - U P O F I N D U S T R Y N E W S , V I E W S , A N D P E O P L E T O W A T C H

Marketoutlook

Now in its fourthyear, Sol Meliá Vacation Club(SMVC) has unveiled majorrevenue and profit figures, andplans for further expansion.

The company reportedrevenues of more than $130million and in excess of $50million in net profits for 2007.This year looks set to be anotherbanner year, with a revenue andprofit increase of 22 per cent inthe first quarter compared to thesame period in 2007.

In addition, the company –part of Sol Meliá Hotels &Resorts, the world’s largestresort hotel chain with morethan 350 hotels in 30 countries– has revealed plans to opennew resorts in Tenerife, theDominican Republic and

Puerto Rico.Alain Grangé, chief executive

of SMCV, said: “We’re extremelyproud of the fact that SMVC hasmade a substantial strategicand financial contribution to theSol Meliá group during its shorttime in business.”

Grangé believes being partof the wide family of Sol MeliáHotels & Resorts hascontributed to SMVC’s success.He added: “We have a fantasticcorporate team of only 30people with the right ‘glocal’mission and vision.

“SMVC has benefited fromthe unwavering support of SolMelia’s chairman, D GabrielEscarrer Julia, who immediatelyunderstood the importance ofSMVC to Sol Meliá. That support

has been key to SMVC’ssuccess. Together we benefitfrom synergies in marketing,sales, products, operations,financial strengths, customerloyalty and brand recognition.”

Grangé also recognisedSMVC’s relationship with GroupRCI, which handles many of theclub’s back office operations.

He said: “Group RCI hasbeen a contributor to oursuccess by providing highly-effective, customisedmembership servicing.

“This programme givesSMVC members a one-stopshop, answering inquiries aboutmembership options, makingreservations for SMVC resorts,Meliá hotels worldwide, andproactively reaching out to

An artist’s impression ofGran Meliá Palacio deIsora, which boasts oneof Europe’s largestswimming pools. Insetleft: Alain Grangé

Richard McIntosh

members via various outboundcampaigns.”

The latest SMVC Europeanresort launch is Gran MeliáPalacio de Isora in Tenerife,which opens this summer. The600-room complex will initiallyoperate 140 one- and two-bedroom club units.

The resort is affiliated toGroup RCI and Dimitris Manikis,vice president of global businessdevelopment for the companysaid: “The Palacio de Isora is aprestigious affiliate property thatwill boost the industry’s profilein our heartland by delivering ahigh level of hospitality andluxury holiday experience.”

Commenting on Sol Meliá’sentry into the market, Grangésaid: “It was a big step for SolMeliá to enter its brands intothe shared ownership industrywith SMVC, but their joint valuesand commitment to bothproduct and the market havedeservedly paid dividends toeveryone involved, not leastSMVC members.”

INDUSTRY:

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Former president of the North American Division ofStarwood Hotels and Resorts, Geoff Ballotti, has been namedpresident and CEO of Group RCI.

Stephen P Holmes, chairman and CEO of Group RCI’s parentcompany, Wyndham Worldwide, said: “Geoff has a sterling reputation and an impressivetrack record of accomplishment. Over the past 19 years, he has performed roles in real estatedevelopment, travel distribution management and multi-brand hotel operation, all of whichmake him the ideal candidate to lead our global vacation rental and exchange business.”

Ballotti’s career has seen him working out of Milan, Rome and Brussels in variousleadership roles. At Starwood he was appointed to run its largest operating division where heled a multi-branded portfolio of 450 hotels with 65,000 associates and system-wide revenuesin excess of $10 billion.

Before entering the hospitality industry, Ballotti, a Harvard graduate, worked for the Bankof New England in corporate and commercial real estate finance.

Commenting on his new role with Group RCI, he said: “It was the people and leadershipreputation of both Group RCI and Wyndham Worldwide that attracted me to the company. Thediversity of the Wyndham Worldwide business model is exciting and I am looking forward tobeing part of the high-energy senior management team.”


PEOPLE:

Geoff Ballotti

Club LaCosta Resorts &Hotels’ (CLC) buoyantexpansion strategy hascreated two major newmanagement roles.

George Robertson,who joined CLC in2003, is promoted tomanaging director,Russia. He will furtherdevelop CLC’s rapidlyexpanding EasternEuropean operationsfor both timeshareand real estate sales.

CLC currently hastwo Russian salesoffices in Moscow andKrasnodar with 250staff. Plans are inhand to open newoffices in the country.

Roy Peires, CLC

chairman, said: “Ihave every confidencethat George’sthorough and astuteknowledge of thebusiness will pay hugedividends in the veryexciting Russianmarketplace.”

Claire Westhead,former managingdirector of PrimeOverseas Property, aCLC subsidiary, nowjoins the parentcompany as deputyUK sales andmarketing director.

Westhead has awealth of industryexperience havingjoined LSI, whichbecame Signature andthen Sunterra, and is

now Diamond Resorts,19 years ago.

Eran Revivo, UKsales and marketingdirector said: “CLC isalways searching forproven industry talentand in Claire we havesomeone ideallyqualified.”

Westheadcommented: “No onein the industry canhave missed Club LaCosta’s impressiveand dynamicdevelopment. This is acompany that reallydelivers.”

CLC is currently ona recruitment drive tofurther its expansionplans across Europeand beyond.

EXPANSION DRIVES NEW CLC POSTS

RCI MIDDLE EAST HOSTS LRIC09Investment opportunities in the MiddleEast’s shared-vacation ownershipmarket will be on the agenda at thethird annual Leisure Real EstateInvestment Conference (LRIC09).

The conference, organised byRCI Middle East, will be held in Dubai,at a venue yet to be decided during lateJanuary next year.

It will focus on Dubai’s new shared-ownership legislation and how this hasbeen a catalyst for a $1 billion industry.It will also offer legal advice on how tostructure shared-ownership resortsand feature leading brands such asWyndham, Hilton, Sol Meliá and IFAHotels & Resorts, highlighting thebenefits of adding timeshare andfractionals to mixed-use resorts.

For more information on both thevenue and date of the event, emailCassie Curtis on [email protected] tel: +971 4390 1668.

LEISURE REAL ESTATE MASTER CLASSScottish Development International (SDI)is presenting a valuable networkingopportunity for resort developers andlandowners, looking to capitalise on allScotland has to offer in the way of anexciting and diverse holiday destination.

On October 2, SDI will be hosting aLeisure Real Estate Master Class. Theevent will be sponsored by Group RCIand present an overview of the marketpotential. It is designed to signpost theway into the timeshare and fractionalsbusiness for new entrants, and expertswill be on hand to offer advice onmatters such as legals and funding. Itwill also provide established developerswith the opportunity to meet withlandowners to discuss the potential ofentering into joint venture projects.

For more information, contact LornaMacmillan tel: +44 (0)141 228 2588 oremail [email protected]

GLOBAL HOSPITALITY INDUSTRYLEADER APPOINTED PRESIDENTAND CEO OF GROUP RCI

EVENTS PROFILE

INDUSTRY:

ClaireWesthead

GeorgeRobertson

RoyPeires

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Aerated Concrete Industries Co (ACICO) is set to launch its first sharedownership property after affiliating Nassima Tower to RCI Middle East.

The company expects to complete the development of the tower, which is in theWorld Trade Centre district of Dubai, in the fourth quarter of 2008.

The 50-storey tower, located five minutes from Dubai International FinancialCentre, will appeal to business and leisure travellers, and will have units rangingfrom one- to three-bedrooms.

The Kuwaiti construction pioneer has expanded its presence in the GulfCorporation Council, however Nassima Tower is its first move into shared ownership.

Nabil Al Khaled, ACICO deputy general manager for business development said:“Dubai is becoming unreachable for many, with ever-increasing hotel rates proving a deterrent for return visits. The shared-ownership model allows for flexibility inaccommodations and for visitors to enjoy this world-class city from one of the bestlocations year after year.

“We chose the Group RCI exchange programme because it has the products andservices that will help make our project a success.”

Nick Turner, managing director of RCI Middle East, said: “ACICO will bring someextremely high-quality products to this market and we are very proud to be affiliatedwith this group for its first foray into this exciting industry.”

INDUSTRY:

IFA Hotels & Resorts hasaffiliated the IFA Collection Club to TheRegistry Collection, Group RCI’s luxuryexchange programme.

The agreement, signed at theArabian Hotel Investment Conference, inDubai, is the first for IFA, encompassinga wide variety of shared-ownership andleisure real estate products.

The affiliation will give IFA CollectionClub members access to the prestigiousdevelopments in The Registry Collection.Properties within IFA’s portfolio, includingPine Cliffs, in Portugal, the IFA YachtOwnership Club in Cannes and Dubai,and future resorts such as the PalmResidence and the Kingdom of Sheba on

the Palm Jumeriah, Dubai, and Zimbali inSouth Africa will be added to The registryCollection.

Nick Turner, managing director ofRCI Middle East, said: “We are pleasedto be associated with IFA on its ground-breaking venture. The programmewraps many elements of leisure realestate ownership under one roof, fromtimeshare and fractionals to high-endwhole-ownership real estate.”

Piaras Moriarty, IFA Hotels &Resorts vice president vacationownership, said: “We picked TheRegistry Collection because the IFACollection needs a brand of extremelyhigh quality to match it.”

VH Dubai has signed an affiliationagreement with RCI Middle East committingmore than 50 luxury apartments at the PalmJumeirah to the deal.

Owners will also buy into the VH ResidenceClub, in the first fractional offering of its kind byVH Dubai in the Emirate.

Since its debut in 2007 VH Dubai’s occupancylevels have averaged more than 90 per cent andthe company has achieved unprecedentedgrowth in its opening year of operation.

Nick Turner, managing director of RCIMiddle East, said: “VH Dubai is offering thechance to own a portion of this idyllic eighthwonder of the world at a fraction of the cost ofbuying outright. We are pleased to be alignedwith them on this project and to provide globalservices and benefits to future VH ResidenceClub owners.”

Umar Mian, CEO and managing director ofVH Dubai and the VH Residence Club said: “Dueto the thriving interest and intrigue surroundingDubai, guests are attracted to this stunninglocation at exponential rates and our uniqueofferings have been excellently received.”

INDUSTRY:

FRACTIONALS TAKEOFF AT THE PALM

John Paul Nichols, president and managing director,Group RCI EMEA, left, with Umar Mian of VH Dubai.

Above left: The Nassima Tower. Above: Pictured from left, Geoff Ballotti, president andCEO 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.

A R O U N D - U P O F I N D U S T R Y N E W S F R O M T H E M I D D L E E A S T

Marketoutlook

VENTURES NEWS ONLINECan’t wait for the next issue of Ventures tofind out the latest industry developments?Stay up to date by checking out thebreaking news section on the new andimproved rciaffiliates.com

INDUSTRY:

IFA SIGNS TO THE REGISTRY COLLECTION

ACICO MOVES INTO SHARED OWNERSHIP

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Group RCI is set to launch an exciting new feature on RCI.com thatwill make its members’ search for their ideal holiday faster andmore fun.

As a result of significant investment, research and developmentwork, Group RCI’s enhanced search tool has turned the process onits head.

Instead of beginning the search with resort and holiday criteriaand waiting for a certain number of results to come back, themember can now start with a global, mapped view of all accessibleinventory and filter down to the resorts most suitable for theirholiday needs. The enhanced search tool allows members tosearch for resorts close to the destinations they plan to exploreand find resorts offering the facilities they want. Search results canbe shown on a Google map or as a resort list.

The new programme will be rolled out acrossEurope in multiple languages and members will be

able to select their perfect holiday up to 18 months ahead.Andrew Hill, manager of online services for Group RCI, said:

“This more transparent delivery of product means members canfind holidays in the right place, at the right time, and even for theright reasons, whether lying on a beach or indulging in moreenergetic pursuits.

“Initial introduction of this improved search methodology in theUS has demonstrated increased levels of search usage, growth invisitor engagement on the website and a healthy level of positivemember feedback.”

Below is an annotated screen shot which highlights some of thenew features of the enhanced search facility for Group RCImembers.


I N F O R M A T I O N E X C L U S I V E L Y F O R G R O U P R C I A F F I L I A T E S

More searchfilters■ Members can add orremove selections to narrowtheir holiday criteria.

GroupRCInside

New map view■ Members can search by region, travel dates,price or holiday type.■ Click a specific region for a detailed Google map.In areas with no availability, the map turns red.

Resort listShows available holidays based on thesearch.

■ Click the resort ‘Name’ or ‘Resort ID’link to access complete online resortlisting.■ Click ‘Available Units’ to see all unitsizes and available check-in dates for theresort.■ Click ‘Read the review’ to read othermembers’ comments on the resort.

A better way

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I N F O R M A T I O N E X C L U S I V E L Y F O R G R O U P R C I A F F I L I A T E S

GroupRCInside


ust as a healthy heart isessential to the efficient flow of

blood throughout the body, aneffective call centre operation isvital in feeding the end businesswith happy customers.

Group RCI’s largest call centreis based in Cork, Ireland, and is thefirst point of contact for themajority of the company’s 450,000European members wanting toarrange an exchange holiday. Asthe start of the member journey,the call centre experience willcolour members’ feelings aboutthe timeshare product.

This is exactly why the conceptof ‘added value’ is of paramountimportance to Jeff Cummings,director of operations at Group RCI.

He believes the Cork operationcould be more correctly describedas a contact centre. Staff at theCork site deal with inbound andoutbound calls, as well as emailcommunications from members.

A customer services team isalso housed on site at Cork,working closely with the tele-operators or Guides as they’reknown within Group RCI becausethey guide callers towards the bestpossible holiday experience.

Some 650 people work at thepurpose-built Cork site, whichcovers an area of 10,300 squaremetres and was opened in 1999.Of that number, 474 are Guides,and 60 are customer careconsultants. Eighteen Europeanmarkets are serviced from Cork,each in its own language.

IT’S GOOD TO TALKAs many as 2.4 million membercalls are forecast to go through thecall centre in 2008. Interestingly, intimes of ever-changing technology,Cummings says the humbletelephone – albeit a sophisticatedand advanced system – remainsking. Feedback and the monitoringof booking confirmations hasproven that members prefer tospeak to an actual person.

Cummings points out that Corkis also a sales centre, its objectivebeing to ‘sell’ as many holidays aspossible. Guides are charged withthe personal responsibility ofdiscovering what the customerreally wants from their holiday andto sell them that experience.

Cummings said: “Weencourage members to searchand transact online, as they can do

this 24 hours a day, seven days aweek. However, most of ourmembers choose to speak with aGuide to talk through ideas anddifferent holiday options.”

KNOWLEDGE IS KEYGuides are expertly trained to beknowledgeable about resortlocations and travel services suchas flights, insurance and car hire.Cummings added: “It’s our aim toprovide a one-stop-shop solutionfor booking a holiday. It’s importantour Guides know what is availableand have the confidence to suggestalternatives when necessary.”

Group RCI offers white labelclubs for some of its affiliateddevelopers. The customisedservice features telephonegreetings in the name of thecompany from which membersbought. Dedicated teams willservice some of the larger clubs,having undergone specialisttraining in the club’s product andresorts.

Guide education and training inturn improves call response times– a key factor in growing thebusiness. Eighty per cent of calls toGroup RCI’s call centres areanswered within 20 seconds.Average talk time and call volumesdictate staff scheduling.

Cummings said: “Our callcentres around the world are theheartbeat of the business,generating revenue, fulfillingexchange, and supporting feecollection.

“We also supply memberfeedback to our resort servicesteams so they can source inventoryin the right places. Our Guides’calls are monitored and theirtraining is continuous because adiscourteous manner or incorrectservicing will negatively impact our

developers’ business, in the sameway a terrific RCI Guide willpositively influence it.”

To recruit the best possiblepeople, Group RCI offers attractivepackages and work environmentswith great facilities, including agym at the Cork site.

Training begins with an initialfour-week ‘classroom’ stylesession, followed by eight weekson the job training, where a mix oflive calls and classroom training ingeography, resort operation,customer services and sales,alongside top performing Guides,ensures the new intake is equippedwith the knowledge to help themenhance customer satisfaction.

Geography training for Guidesincludes:■ Educational trips to resorts tosample both the product and area,which Guides then present to theirpeers■ Developers visiting Cork topresent resort and destinationattractions■ A Global Guide Exchangeprogramme whereby Guidesexchange with peers in otherGroup RCI call centres■ Weekly presentations, during lowcall times, on resorts/areas visitedby Guides on their holidays.

Cummings said: “Happyemployees give exceptionalservice to members. If Guides feelconfident with the product, theycan fully service the calls. It’simportant for a member-servicingorganisation such as Group RCI toprovide a stellar service to ensurecustomers remain loyal. It’s downto teamwork, and that includesour affiliate partners. We reallyappreciate their cooperation andsupport.”

Cummings is proud to havesucceeded in creating a truly

AT THE HEART OF YOUR BUSINESS

J

There are many ways in which GroupRCI’s call centres drive business growthfor its affiliates and keep the customerssatisfied. JUDI EVERITT looks at the workof the company’s main call centre inIreland which services one of Europe’slargest membership groups.


diversified culture within Group RCI.Guides from different countries areable to interact with theircolleagues and learn about othergeographic locations and theinventory available in their areas.This cultural diversity adds to thepositive experience whencustomers contact the call centre toarrange holidays. He explained:“We now have, for example, theability for our Spanish Guides toencourage Spanish members toexchange into Finnish inventory.”

CARING FOR YOURCUSTOMERSIn 2007, the Cork site received anEmployee of Choice recognitionaward from the Irish Governmentand a Gold Award in the certifiedExcellence through Peopleprogramme – Ireland’s nationalhuman resource managementstandard. Awards like this reflectthe importance Group RCI placeson its staff, and how they providethe customer with a positiveexperience.

Janet Doyle is director ofcustomer care at the Cork site,where pre- and post-travel servicesare operated. Members can callGroup RCI’s help desk team with‘live’ travel problems, should theyarise, and available services includea 24-hour check-in to ensure thequick resolution of any difficultieswhich the resort’s ownmanagement are unable to solvealone. Pre-travel also includesadvising members of pool orrestaurant closures, for example.

The majority of communicationscome in written form, but it’s a

situation Doyle wants to change.She said: “We are trying to educatemembers to call us directly, as apersonal call enables consultantsto build a rapport and ensure a firsttime resolution to member queries.From March 2007, we switched to atelephone response systemwhereby the majority ofcorrespondence will be respondedto by phone and closed first time.”

Before her arrival three yearsago, customer care consultantsand Guides worked in separatedivisions. Today, the two teamswork closer together and,according to Doyle, “exchangeregular feedback at all levels”.For example, Guides now listenin to calls made by customercare consultants so they canhear for themselves the impacton members any Guide errormay have. She said: “This hasproven very successful in helpingto prevent a recurrence of thesame mistakes.”

Group RCI is continually strivingto improve and perfect its call centreservice to members, and therebydevelopers too. FAME or Feedbackfrom Automated Member Emails isjust one example of innovationintroduced to enhance the service. Itdoes this by ensuring membersreceive a system-generated emailfrom Group RCI following eachtransaction on their account, which

requests an evaluation of eight keyareas of their call experience. Theseareas include Guide courtesy,initiative, resort and productknowledge, as well as an overallsatisfaction rating. This informationis fed back to the Guide and theirteam leaders. FAME was launchedin all markets and languages inFebruary this year.

Developers are increasinglybenefiting from the customer careprocess through shared memberfeedback. Doyle has been visitingresorts in Spain, Tenerife andPortugal to assess the memberexperience and discuss howresort processes and those atCork can work better together.

She explained: “Opening upcommunication between us,members and resorts isimportant. Meeting with resortmanagers has been productiveand the feedback we havereceived is that they are lookingforward to working more closelywith us in the future.”

Recognising that its callcentre operation is the lifeblood ofbusiness for its developers anditself, Group RCI is committed tothe continual enhancement of callcentre services to bring evengreater numbers of happyholidaymakers into its affiliatedresorts – and to keep them goingback.


Janet Doyle and Jeff Cummings areconstantly looking at ways to furtherimprove member satisfaction andincrease transaction rates.

ON CALLGroup RCI servicescustomers in 18 differentlanguages from six callcentres across Europe andthe Middle East. Affiliatesare welcome to visit. Formore details contact yourGroup RCI representative.

“It is evident that Group RCIhas invested considerabletime and resource inproducing this dedicated callcentre environment whichprovides its members andclients with a bespoke servicecatering for their individualrequirements. There is clearlya philosophy of continualreview allowing adaptation tothe ever-changingcircumstances they face. Thephilosophy focuses heavily onthe staff and theirdevelopment, one of the keyfactors in ensuring that clientsreceive the service theydemand.”Guy Mantel, Club La Costa

“The folks in Cork have helpedus as a resort and given me anopportunity to make newfriends. We spend hundreds ofdollars to get someone to walkthrough our door and oftenignore avenues that alreadyexist. The ability to work withGroup RCI and specifically withthe call centres around theworld has given us anopportunity to expand ourmarketing efforts with a muchsmaller investment per guestthan our current programmescost... truly a no brainer!”Scott Merritt, Silver LakeResort

Group RCI’s award-winning call centre in Corkservices members in 18 different languages.

WHAT THEY SAYABOUT GROUP RCI

V


COVER STORY


herever you turn in the media, there are constant remindersthat the good times are at an end for the foreseeable future.

Inflation and interest rates are on the rise, credit is being squeezedand, to use an old English expression, ‘times is hard’.

Against this background, however, one sector of the leisure realestate industry seems to be showing a healthy resilience to thecurrent financial meltdown. The fractionals market, in the USparticularly, is flourishing despite – and possibly even because of –the current economic gloom.

According to a report by NorthCourse Leisure Real EstateSolutions, the consultancy arm of Group RCI, sales of fractionalproperties in the US, Canada and the Caribbean hit almost $2 billionin 2007 – an increase of 20 per cent on the previous year. Duringthe same period, sales of vacation homes in the US declined by 30per cent and investment home purchases by 18 per cent, accordingto the US-based National Association of Realtors.

ROBUST AND RESILIENT Peter Giamalva, left, president andmanaging director of NorthCourse Advisory Services,explained: “The fractional product is clearly robust and setto grow. It appeals to people who want to purchase leisurereal estate without the expense and aggravation of a wholly-owned second home, even though they can afford one.”

And in tough economic times, the managing of expenditure andthe value of investments is more important than ever, according toindustry expert Piers Brown, founder of web portal Fractional Lifeand organiser of Fractional Expo 2008 and other industry events.

He said: “Given the credit crunch and economic uncertainties,it’s clear that property values are far from guaranteed andconsumers are questioning the value of 100 per cent ownership ofmany luxury items.”

Brown also believes the current market conditions areprompting many people to reassess what’s important in their lives.

He added: “We’re on earth for a finite amount of time and we

want different experiences and to discover more ways to make ushappy while we’re here. Fractional products can do that without theexpense and hassle that comes with life’s more exciting luxuries.”

Stefano Tosato, below, managing director of fractionals-sellingresort Relais Villa Petrischio in Tuscany, Italy, a full affiliate of Group RCI’s luxury exchange programme The Registry Collection,agreed that economic uncertainty could have a positive affect on

fractional sales.He said: “Some buyers will certainly see fractional

ownership as a better and lower-risk investment thanbuying a wholly-owned holiday property. The fractionalproduct requires a lower capital investment which will

act as an incentive in the current economic climate.”Ron Haylock, chairman of fellow Tuscan resort Borgo di

Colleoli, which is also fully-affiliated to The Registry Collection,agreed the credit crunch was causing many to rethink theirpurchasing decisions. “People who have been considering buyingwhole-ownership units are starting to ask themselves why theyneed a whole house or apartment when five weeks will do,” hesaid.

LUXURY DIVIDENDS Owning something for a few weeks of theyear – as opposed to whole ownership – is the basic premise ofthe fractionals model and has been applied to everything from jetsand yachts to luxury cars, as well as real estate.

There are benefits to buyers and sellers alike. The former are ableto purchase higher quality products than they might otherwise beable to afford or wish to maintain, while the latter can potentiallyenjoy increased profitability courtesy of a bigger and morediversified market.

The developer also benefits from a more cost-effective marketingand sales operation, as fractionals yield a higher profit per unit soldthan timeshare and, because the period of use being sold is farlonger, there are less sales to be made before the property is sold out.

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

W

The future is FRACTIONAL

PEOPLE THAT HAVE BEEN CONSIDERING BUYING WHOLEOWNERSHIP UNITS ARE STARTING TO ASK THEMSELVESWHY THEY NEED A WHOLE HOUSE OR APARTMENT WHEN

FIVE WEEKS WILL DO RON HAYLOCK, BORGO DI COLLEOLI’’‘‘

workV-Fraction2-sa-rb-JP:Layout 1 3/6/08 11:37 Page 2


While a fractional purchase remains a form of shared ownership,when applied to leisure real estate it differs from many timesharearrangements in one very important way – it is a deeded purchase.

Giamalva said: “For most consumers timeshare provides theirannual holiday accommodation requirement. When you buy afractional, you’re looking to satisfy your holiday needs, diversifyyour investment portfolio, and make a real estate purchase.”

BUYING HAPPINESS A fractionals purchase is always about more thansimply making an investment according to Brown, who was introducedto the model through his own fractional super car ownership five yearsago 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 termsof accommodation and holidays that means spa experiences,championship golf courses, fabulous locations and adventure. In sucha market, fractional ownership can only gain momentum.”

Brown’s optimism is reflected in the NorthCourse report, whichsuggests the resort industry is entering “a period of explosive

Fractional properties – and members of The Registry Collection – offerluxurious accommodation. 1: The brick arches and oak beams at RelaisVilla Petrischio date back to the early 19th century. 2: Villa Petrischiowas built on the highest hill of Farneta in Tuscany. 3: Another unitinterior at Relais Villa Petrischio. 4: Lunch on the terrace at Borgo diColleoli in Tuscany.

According to NorthCourse’s 2008 Annual Fractional Interest Reportfor the US, Canada and the Caribbean, fractional sales in North

America increased by 20 per cent between 2006 and 2007, with totalsales 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 presaleswhich may be an indication that consumer knowledge and acceptanceof the product is increasing. Resales also saw significant growth – yet

another assurance to consumers that investment in a fractionalinterest is very different than a non-equity club or a timeshare.”

FRACTIONALS – THE FACTS

12

34


growth” with the long-term trend likely to produce “dramaticgrowth in the second-home real estate industry”.

The report states that fractional real estate is a niche lifestyle productwithin this industry that serves the needs of two markets, and they are:� Affluent clients who can afford a whole-ownership second home butwhose time constraints make it impractical. They want the use of asecond home for a few weeks each year but not the responsibility andcorresponding investment in an under-utilised asset. � The less affluent client who aspires to the status and luxury of anexpensive second home, but can’t afford five-star quality.

Optimistic forecasts and the identification of significant key marketswill be music to the ears of developers of the 300 or so fractionalproperties currently dotted around the globe, as well as those seeking toenter the industry, which remains in its infancy, especially in Europe.

EUROPEAN PROSPECTS Regency Resorts, based in Spain, is oneof only a handful of European resorts selling fractionals. Its fractionalproperty, The Regency Country Club, is an associate of The RegistryCollection and is located in southern Tenerife where the year-roundseason is a plus point. CEO Ward Woods, is convinced it won’t belong before more European developers look to build a presence inthe fractionals market.

“The fractional model is bound to do well in Europe,” Woodssays. “After all, it already exists here – people have shared ski lodgesfor years.

“There’s a tradition in Europe of affluent people owning a holidayhome – whether it’s a cottage by the sea in Ireland or a bolthole inBrighton. It’s a traditional aspiration of most people and the fractionalmodel just makes it all the more practical and easier to access.”

Giamalva explained the European market could be being heldback by a lack of finance. Banks and other institutions, he believes,need to develop a greater understanding of the product to enableconsumers to finance their purchase.

He said: “The British, Germans and French can arrive in Spain oreven Bulgaria and get a loan on a wholly-owned second home –banks and financial institutions understand that. But there’s probablysome education needed to get them to understand fractionals. It’s notlike buying a week of timeshare. It’s a more formalised purchase, withthe opportunity for property appreciation and rental income which,from the financial institution’s perspective, should carry less risk.”

A FRACTIONALS FUTURE Many industryobservers agree that there is a bright future forfractional products beyond the established USmarkets.

For example, NorthCourse estimates thefractionals market in the Middle East (ME)will be worth more than £1.2 billion perannum in sales revenue by 2020.

Nick Turner, managing director of RCIMiddle East, below, says the region is anobvious choice for fractionals development.

“There are a lot of wealthy individualswho like owning portfolios of assets in theME. The product here is high-end and morelikely to be sold and bundled in four fractions for $250,000 ratherthan one week for $10,000 to $15,000,” he says.

“But there are obvious opportunities in desirable Europeandestinations where it’s too expensive to own a wholeproperty – Italy, France, Switzerland and so on. I alsounderstand there are developers looking at fractionalpropositions in Scandinavia, East Europe and Russia.”

Woods agreed that Europe showed great potential, especially asmany suitable properties were already in existence.

“Europe is full of high-quality exclusive boutique properties –such as castles and chateaux in the UK, Italy, and Spain – that justneed to be structurally reconfigured and better managed,” he said.

“The fractional model will support a small property with 30-40units because it guarantees management income and enables you toprovide better services than if it was a struggling hotel.”

Haylock suggested fractionals were probably better suited to thetraditional resort rather than urban location, but said a key elementwas ease of access and travelling distance.

He said: “I’m a little doubtful about whether it could work for long-haul destinations. British people would be targeted for fractional sales in

COVER STORY


THERE’S A TRADITION INEUROPE OF AFFLUENT PEOPLEOWNING A HOLIDAY HOME – AND

THE FRACTIONAL MODEL JUST MAKESIT ALL THE MORE PRACTICAL ANDEASIER TO ACCESS WARD WOODS,REGENCY RESORTS’’

‘‘


Florida and US residents for European sales, but that would meanowners having to make two or three long-haul flights a year to usetheir allocation, and I think that would make people think twice.”

With that in mind, Haylock said his marketing efforts wouldinitially concentrate on the resort’s existing owners and rental guests.

He explained: “It’s very important for people to see the productso we’ll be selling on site. We’ll target timeshare owners who wantto upgrade, as well as taking advantage of the high volume of rentalactivity we generate to the resort.”

THE RIGHT SELL Woods said there was a natural link betweentimeshare and fractionals – established owners were a perfect sourcemarket for the higher-specification product, and resorts couldupgrade to make the offering without too much upheaval.

“There’s no reason why a timeshare developer can’t get intofractionals – I think it’s a natural progression,” he said. “Havinghappy owners already in place is obviously a great help because youcan upgrade and offer them a different type of product and access tomuch better inventory.”

Woods suggested a mix of timeshare and fractional properties

brought two major benefits to the sales deck. He said: “Thefractional product is high quality, giving clients who can’t initiallyafford it something to aspire to. We show all customers the fractionalunits so they know if they buy a standard timeshare they canpotentially upgrade. The quality aspect of the product also attracts thebest salespeople, which is a great benefit in a marketplace wherethere is a sales skills shortage.”

While the timeshare link does help, Turner believed the nature offractionals – where the title deed is part of the purchase – makes it agood fit for marketers of real estate.

“From a marketing perspective, it’s an easy transition from real estateto fractionals because if you’re an established real estate developer thenyou’ll have a good database of consumers who did or didn’t buy yourwhole-ownership product, which is great for offering either a lessexpensive entry proposition or a better value property upgrade,” he said.

Brown agreed, suggesting upscale estate agents were best placedto sell the product. He said: “Fractionals have to be sold in the rightway. It’s really important that they are clearly defined and different fromstandard timeshare. Transparency – particularly in pricing – is also veryimportant. It’s an upscale acquisition so the consumer understands

The NorthCourse report highlighted severalfactors that influence the success of fractionalresorts, and among them were: �Use plan – successful resorts are more likely tooffer a rotating calendar or customised use plan�External exchange – fractionals affiliated to anexchange programme such as The RegistryCollection are more successful�Unit variety – successful resorts have differentunit sizes and are more likely to have lock-offsections

�Base share size – the length of fractional soldat successful resorts tends to be larger. Themedian is six weeks which goes hand-in-handwith longer high seasons�Maintenance fees – successful resorts tend tohave lower maintenance fees, indicating thatprice sensitivity is often based more on on-goingcost than the actual purchase price. This isespecially true of the lower-priced fractional.Allowing maintenance fees to spiral is one of thebiggest mistakes a developer can make.

SUCCESS CHECKLIST


56

75: The apartments at Borgo di Colleoli mix contemporary amenitieswith traditional rustic charm. 6: Borgo di Colleoli is set in a 23-acreestate in the Tuscan countryside between Florence and Pisa. 7: The

stone and marble designs and statues at Regency Country Club insouthern Tenerife are based on the exotic island of Bali.


COVER STORY

having to pay a premium for flexibility, and tocover legal fees and the developer’s marketingcosts. However, reputable operators understandthat greed is not a good driver and that there ismost definitely a tipping point for consumers.”

Turner added that the nature of the productalso meant that marketing needed to be “highquality and low volume”, putting the emphasison “opulence, luxury and exclusivity”.

The latter is a key element whenmarketing to potential fractional purchasers,according to Woods.

He said: “The clients feel they’re a cutabove the rest and want to go to propertieswhere they’ll be surrounded by people of asimilar mindset.”

Woods pointed out that offeringmembership to an exclusive grouping suchas The Registry Collection, an exchangeportfolio comprising Group RCI’s premierproperties – fits the bill perfectly.

Membership of The Registry Collectiongives fractional owners the opportunity toexchange into some 120 luxury propertiesacross the globe and is a useful salesincentive, according to Woods.

“Most clients are primarily buying to visit

a chosen property, but the possibility of beingable to exchange is great and is an excellentsales proposition. Being able to whiz off toexperience other worlds and adventurefurther afield adds an element of freshness tothe holiday home experience.”

Giamalva added: “The reality is that it’snot just whether you enjoy the place whereyou purchase the first two or three years, butfurther down the road – and it may only beonce in a while – you might want to take thebroader family with you and need moreaccommodation than you’ve got, or to dosomething unique. The Registry Collectionallows buyers to take advantage of theiroriginal purchase but offers a broaderspectrum of travel opportunities.”

Tosato agreed the exchange elementprovided an excellent additional benefit andmade “investment in fractional ownershipmore attractive” to potential clients.

“Quality is key,” concluded Woods.“When spending that sort of money, the cashrich and time poor want to be assured of aquality experience every time, wherever theyholiday. After all, that’s why they choose tobuy a fractional in the first place.”

The fractionals market is made up oftwo products – traditional fractionalsand Private Residence Clubs (PRCs)– which operate in similar ways.There are some fundamentaldifferences between the two,however, and they are that:�A PRC, generally, has a higherspecification of internal fixtures andfittings and a unique location�Fractional properties often operaterental programmes so owners canbenefit from an income stream – astrong purchasing incentive�PRCs are seldom rented out,except for unsold developerinventory. PRC managementgenerally don’t facilitate orencourage rentals as owners don’twant transient renters wanderingaround their property�A fractional property operates ascheduled use plan agreed at thetime of purchase. Weeks are typicallyassigned through a rotating calendarso the owner knows which weeksthey will own five to 10 years inadvance�A PRC property allocates usage ona more flexible basis, using anannual or semi-annual reservationsystem, guaranteeing three to fiveweeks per year of use, allocating theremainder on availability�A PRC owner is typically a high-end customer with little abilityto plan very far ahead, so they valuethe greater flexibility.

FRACTIONALS AND PRIVATERESIDENCE CLUBS

V


LUXURY IS BECOMING MORE EXPERIENTIAL – IT’S NOTWHAT YOU OWN, BUT WHAT YOU DO THAT ULTIMATELYMAKES YOU HAPPY PIERS BROWN, FRACTIONAL LIFE’’‘‘

8: Regency Country Clubin Tenerife offers five-

star luxury five minutesfrom the popular resort

of Los Cristianos.



n the early 1980s, interest rates in Portugalsoared to 30 per cent. Achieving high

sales volumes became more important thanever for Portuguese-based resort and hotelgroups wanting to develop and expand theiroperation at that time, as investment capitalbecame both tough and expensive to raise.

A solution was found in the timeshareproduct. Hoteliers and resort developersdiscovered the integration of a timeshareelement into their underlying business wasa very effective means of raising money. Itsoon became a staple part of the economicequation in the running of many hotels andresorts, and Madeira’s Pestana Hotels &Resorts was the first of such groups torealise the significance of the financialcontribution to be made by adding atimeshare operation to its activities.

Peter Booth, Pestana’s group managingdirector, who has been with the companysince 1983, is as committed as ever to thegroup’s timeshare business. Today its mixed-use timeshare operation is fullyintegrated into many properties in itsportfolio of 85 hotels on three continents.

Booth said: “Pestana was a pioneer in theMadeiran timeshare market. We sold ourfirst timeshare in 1985 at the five-starMadeira Carlton Hotel. Currently we have16 timeshare resorts in Madeira and on theAlgarve which are all affiliated to GroupRCI, plus RCI Points products in Brazil andArgentina. Our timeshare businesscontributes 15 per cent to the group’soperating profit and we have an ownershipbase of 30,000 families.

“With more than 20 years’ experience inthe timeshare sector, our philosophy ofintegrating timeshare into our four- andfive-star properties has remained unchangedover the years.”

Madeira has been described as a smallcorner of sub-tropical paradise in theAtlantic Ocean. It’s just a three- to four-hourflight from most European capitals. But,more importantly for the timeshare sector,Madeira is a holiday destination to whichpeople return year after year. This fact hasbeen a key driver, not just to Pestana’stimeshare client base, but to other hotels onthe island.

Cláudio Santos, director, Porto Bay Hotels& Resorts, said: “Madeira is a repeater’sdestination and, bearing in mind that ourreturning client rate in the hotel business isaround 30 per cent, the possibility ofoffering our clients an interesting way toholiday through timeshare was a clear added benefit.”

According to Santos, timeshare salesrepresent approximately 10 per cent ofPorto Bay’s €50 million total group revenue.

The company’s strength has been ininnovatively adapting its operation to fitMadeira’s mixed-use model. Porto Bay hastransformed its business from a single self-catering hotel business, launched withthe opening of Suite Hotel Eden Mar in1988, into a group of hotels including itsfive-star flagship hotel, The Cliff Bay.

The founders and investors in the groupidentified the demand for a more uniqueupscale offering and opened the innovative

city resort hotel, Porto Santa Maria, in 2000.Situated in Funchal’s Old Town, the conceptof this property was to fuse the attributes ofa city hotel with a traditional beach resort.It’s an offering which is in high demandamong more mature visitors.

In December 2003, Porto Bay Hotels &Resorts opened Vila Porto Mare, whichembraced its new fusion resort concept byintegrating three individually-themedproperties offering very different holidayexperiences – Suite Eden Mar, Hotel PortoMare and The Residence – under a sharedspace allowing guests to access the great varietyof services and facilities within the complex.

Mixed-use resorts are characteristic of Madeira’sholiday offering, but KATHERINE STEINER-DICKSdiscovers there’s more to this business modelthan great lead generation opportunities.

I

MARKET REPORT

A QUALITY MARKET

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STRATEGY PAYS OFFWith its impressive group of properties,Porto Bay management decided to integratethe timeshare element as part of itsinvestment and revenue stream. But it hasvery specific timeshare strategies based onwhat is best for its business and target clientbase.

Santos said: “We sell a timeshare productwith a 10-year leasehold because it givesclients good legal protection for theirownership and it’s less bureaucratic thanfreehold.”

Santos believes that a 10-year lease is theright duration because clients seem more

willing to commit to this period ofownership than a longer one.

He explained: “Our strategy is to avoidresales which would necessarily happenmore often the longer the duration ofownership. Industry data also shows that thepercentage of unpaid maintenance feesincreases with longer periods of ownership,so this way we avoid having to deal withthat problem. It also lowers administrativecosts and increases guest satisfaction.”

Santos said that Porto Bay’s managementdecided not to use off-site personal contacts(OPCs) in sales. He said: “It’s just too muchof an invasive method for our taste, and we

can’t control the brand image that is out onthe streets with OPCs. We invest too muchin image and brand building to endorsemarketing practices that are uncontrollable.”

Each hotel group has an opinion aboutwhich timeshare product and marketingstrategy best supports its business model.Pestana’s Booth said over the years the grouphas offered both fixed weeks in fixed unitsand the points product. Fixed weeks and unitshave continued to be a popular option for thegroup in Portugal, where it builds a newtimeshare resort every three to four years.

Booth added: “We are a traditional hotelbusiness that has branched out into

QUOTE: WITH MORE THAN 20 YEARS’ EXPERIENCE IN THE TIMESHARE SECTOR, OURPHILOSOPHY OF INTEGRATING TIMESHARE INTO OUR FOUR- AND FIVE-STAR PROPERTIES HAS

REMAINED UNCHANGED OVER THE YEARS. PETER BOOTH, PESTANA HOTELS & RESORTS

A GOLDEN OPPORTUNITYThe small island of Porto Santo, known as the ‘goldenisle’, has about 5,000 inhabitants, most of them being

fishermen which gives the place a traditional feel. As yet, thisisland is relatively undiscovered as a holiday destination. It lies 40

kilometres north-east of Madeira, pictured, and is accessible by boat orplane. 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 placefor visitors to pamper themselves, while it shares Madeira’s wealth of

active pursuits such as walking and surfing.


innovative products. And we’re one of thefew hotel groups that have evolved throughnew products, while still retaining a highquality, traditional hotel feel. We offer a fullrange of products, from timeshareapartments to fractionals, full freeholdapartments and villas, and the latest modelin hotel room ownership which we havelaunched in London with the opening ofthe luxury Pestana Chelsea Bridge Hotel.”

Pestana is not only innovative when itcomes to integrating different products,but also in bringing customers into itsoverall service. The company charters aBoeing 737 and has been running weeklyflights from London’s Gatwick airport toMadeira for 15 years, as well as taking seatallotments on other airlines flying out ofthe UK. Pestana’s guests can also bookthrough its UK-based tour operator,Atlantic Holidays.

Pestana flies about 700 passengers aweek into Madeira and they are a mix ofhotel and timeshare customers who arebrought together in an environment whereword of mouth recommendations form avery persuasive method of marketing.

Booth said: “We have an aggressive

marketing plan that reaches a captiveaudience staying in our hotels. We have PRdesks in our hotel lobbies to promote ourtimeshare product to potential clients, andwe use cocktail parties and excursionprogrammes.

“Getting new sales is difficult, which iswhy I think the hotel sector should lookmore seriously at this business. Hoteloperations have a readily available databaseof quality leads.

“Seventy per cent of our sales comefrom in-house timeshare customersstaying at our resorts – that figure rises to85 per cent if you include lead generationfrom our hotels. Pestana’s timesharecustomers tend to buy smaller propertiesinitially, upgrading their accommodationwhen they see Pestana delivers what itpromises.”

But how is Madeira’s timeshare marketfaring in today’s testing economic times?Booth said: “Over the last 20 years thetimeshare sector has been resilient toeconomic downturns as people alwayswant, and often need, a holiday. And ourtimeshare product is a quality product at acompetitive price.”

As the world’s financial markets werebeginning to feel the pressure from the USsub-prime mortgage crisis, Pestana boasteda record year for sales in 2007. “Alreadyour sales for 2008 are matching those forthe same period in 2007,” Booth reveals.“Our pricing is competitive starting at€5,000 for an entry studio property.”

These impressive sales figures werehelped by the launch of the PestanaPromenade, a mixed-use property onMadeira which is scheduled to open inFebruary 2009. This mix of 236 hotel unitsand deluxe timeshare apartments has, inthe first 18 months of marketing, beaten allPestana’s previous resort sales’ records.

In April the company also openedPestana Porto Santo, a five-star hotel on theisland of the same name which forms part of the Madeiran archipelago. The 300-room hotel is likely to launchtimeshare sales in the second half of 2008.The project also includes 250 freeholdvillas and apartments.

Pestana also offers financing tocustomers, but Booth says that only 10 per cent take up the service, so it’s not a large part of the business.

SELECT SERVICESantos admits that Porto Bay’s pricing maybe more expensive than its competitors,but it can prove that the high price reflectsthe high quality of service.

“We do not centre the sales process onthe exchange system, although it has provento be an important sales driver,” he said.


MARKET REPORT

C An artist’s impression of the PestanaPromenade Hotel which, in the first 18 months of marketing, has beaten all Pestana’s previous sales records.

C The Pestana Porto Santo Hotel isPestana Hotels & Resorts’ newly-openedproperty which is set to come intotimeshare later this year.

RENTAL VALUESAccording to Holiday Lettings, the approximate average rental values per week for a standard holiday home on Madeira throughout 2008 are:

2008 JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DECEuro 377 300 322 302 307 314 322 322 311 307 310 337


“Around 90 per cent of our clients arefrom the UK and our average age is closeto 45.

“Families are certainly a segment that isgoing to grow for us, because that’s wherethe saving for the consumer is moreimpressive. People that can afford to payextra for additional area, comfort andservice are our ideal clients.”

Booth and his colleagues take customerservice seriously, so much so that theykeep a database of guest comments thatgoes back 20 years. If a customer makes apoint of suggesting the pillows could be alittle fuller, when they return the next yearthey can rest their heads on, you guessedit, a fuller pillow. “If you want to keepyour guests coming back, then you haveto ensure the service they receive getsbetter with each visit,” says Booth.

The UK is Pestana’s primary sourcemarket, providing 65 per cent of resortvisitors year-round. The Finnish comprise15 per cent of visitors in the winterseason, the Germans 10 per cent year-round, the Scandinavians five per centduring the winter, with other Europeangroups – French, Italians and Portuguese –at five per cent.

Booth concluded: “We’re fullycommitted to this business. I think manyin this sector aren’t, perhaps becausethey’re not sure about it. We see it as a wayto build customer loyalty, which thenhelps guarantee occupancy, which thengenerates a family and eventually anothergeneration of owners.” V


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 isone of three individually-themed resorts at theVila Porto Mare complex.

C An interior of one of the units at The Residence,where timeshare is sold under a 10-year leaseand a higher price reflects the quality of service.

MADEIRA – GROUP RCI PERSPECTIVE

“Madeira is an important

destination for us. It may

be a small island but

there are some major

industry players offering a

high-quality holiday

experience to their

owners and our members.

“Our affiliates in

Madeira and Portugal

have led the way in

pioneering the highly

successful mixed-use

model. Building on the

success of combining

hotel and timeshare

operations, they are now

taking a refreshingly

innovative approach to

mixing lifestyle and

experience offerings

within their resort

complexes providing an

exciting range of activities

and amenities for their

guests.

“The very economic

climate which gave rise to

the growth of timeshare in

the 1980s – high interest

rates and the ensuing

onset of a credit crunch –

is back with us today.

“Timeshare, in all its

forms, provides a great

opportunity, not only for

real estate developers, but

for hoteliers as well, to

continue to grow their

operations through the

integration of alternative

models. There’s a lot of

truth in the old proverb

that it isn’t good to put all

your eggs into the one

basket.

“With the wider range

of products now available,

such as Group RCI’s

Rental and Exchange

programme, there is

something to suit every

resort, leisure real estate

developer or hospitality

group.

“As our associates in

Madeira have discovered,

timeshare models are an

excellent fit with the hotel

operation, where the

ability to market to hotel

guests on site who are

already familiar with the

resort is a big advantage.”

■ For more information

on timeshare in Madeira

and Portugal, contact

Paula Rodrigues,

tel: +351 965628848

or email:

[email protected]

Ovidio Zapico, Group RCI’s regional director, Spain,

Portugal, Italy and France, pictured, gives his view on

the qualities of the market in Madeira.



All change for TATOC

ATOC was formed in 1989 and has long been Europe’sleading 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 overhaulwas needed. The event wasn’t entitled ‘Embracing Change’ fornothing, explained chairman David Eastburn.

He said: “Since I became chairman, I’ve felt the driving need tomake TATOC more proactive, and in particular, the need to remedythe public perception of timeshare as generated by a hostile andnearly always uninformed press.

“The perception is often strengthened by organisations whichpurport to represent consumers’ interests, but in practice are onlyinterested in making money out of the misfortunes of those whohave suffered from scams. These people, who are outside oftimeshare, continue to denigrate the industry. This serves only todevalue our holiday ownership.”

In turning things around, TATOC has rebranded itself asTimeshare Association (Timeshare Owners and Committees), orTimeshare Association for short.

TATOC chief executive Harry Taylor, said: “The move wasnecessary to portray the consumers’ overall satisfaction with theirtimeshare experience.

“Our priority is to add credibility for the consumer and themedia, and raise the profile of the industry.

“We changed the name to make it more understandable andeasier to find through internet search engines. Some people knowwhat we’re about but many resorts don’t know what we do.”

In addition, TATOC’s constitution has been changed to extendmembership to all timeshare owners, as opposed to merelyowners’ committees.

Taylor explained: “Our original remit was to work withowners’ committees and that’s still very much the case. Thesemember resorts represent more than 250,000 owners. Howeverincreasing numbers of individual owners wanted to join fromresorts that are not members.”

Taylor said individual memberships would cost £20 per yearand come with a package of benefits including legal and otheradvice, a regular magazine and a membership card offeringdiscounts at a number of shops and other outlets.

Taylor added: “The people who apply generally want to getinvolved and have a voice and these are the people we want asmembers!”

But the most significant new initiative is the launch of a resortaccreditation scheme, which will see resorts undergoing astringent annual inspection in order to obtain the TATOC seal ofapproval.

The inspection will, importantly, include the monitoring ofsales and marketing practices and standards of customer service.

Taylor said: “If flying the TATOC flag over a resort means it’sbeing policed beyond the quality of the unit, then that’s whatwe’re aiming for. We want people to be confident that the resorthas sales ethics, a definite procedure for the resolution ofcomplaints, and so on.

“It’s obviously very consumer-oriented which has earned a lotof interest and acceptance from the media, MPs and MEPs.”

Taylor said he hoped to have four resorts accredited by the endof August and at least 10 by the end of the year. Resorts taking partwill only have to pay to cover costs associated with the inspectionvisit and other administrative charges.

“TATOC’s not a profit-making venture at this time,” he added.“The association will continue to be funded through sponsorshipfrom credible companies and advertising in our magazine.”

The organisation’s plans have met with widespread approval,according to Taylor. “We’ve had a fantastic reaction fromdevelopers and the industry in general,” he said. “Ultimately it’sabout the right to have a good holiday experience, and we’re allworking to achieve that.”

Almost two decades after it was formed,The Association of Timeshare OwnersCommittees (TATOC) is launching aradical drive to raise its profile andbetter serve both timeshare owners andthe industry. STEVE ADAMS reports.

TATOC REPORT

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Left, Harry Taylor with Group RCI’s Marj Anderson at the AGM. Inrecognition of the importance of working with timeshare owners,Group RCI has appointed Anderson, resort services manager, as itsdedicated TATOC liaison officer. Right, David Eastburn addressing theTATOC AGM.

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HILTON’S TIMESHARE HIGH

QUOTE: “THE BIGGEST CHALLENGE IS THE FACT THAT OFTEN HOTEL OPERATORS VIEW TIMESHARE ASCOMPETITION, BUT WE HAVE STATISTICS TO SHOW THAT WHEN SOMEBODY PURCHASES A TIMESHARE THEYGO ON TO STAY IN THE COMPANY’S SISTER HOTELS MORE THAN PREVIOUSLY.” RICHARD McINTOSH

BUSINESS PROFILE

hen Richard McIntosh became countryclub manager in 1985 at the

Craigendarroch timeshare resort in Scotland, henever dreamt he would still be there 23 yearslater as managing director of HIGVC.

But that is exactly what he is and,following a takeover of the Hilton HotelsCorporation by Blackstone Private Equity lastautumn, he’s about to embark on a newmission to help take the company’s timesharedivision worldwide.

Currently HIGVC – a Group RCI affiliateoperating timeshare lodges alongside itstraditional Hilton Hotels’ accommodationproduct at each of its resorts – has threeScottish timeshare properties affiliated to theRCI exchange network. They are Hilton

Craigendarroch, Hilton Dunkeld andHilton Coylumbridge.

HIGVC’s first venture outsideScotland came with the opening of amixed-use resort in Vilamoura,Portugal, last July, as well as afranchised operation in Sharm ElSheikh, Egypt. HIGVC operates as partof the larger Hilton Grand VacationsClub business, whose 46 resorts arebased predominantly in the US.

A WORLD OF POSSIBILITIESThe combination of timeshare andluxury hotel product has clearly workedwell for the Hilton group and it’s an

offering which the new owners now plan toexpand further throughout Europe, the US, andacross the rest of the world.

McIntosh is delighted by the prospect ofHIGVC’s international growth and is lookingforward to his new role.

He said: “I’m excited about the opportunity togrow our business now I have been given a clearremit to go out and do so. It’s a big challenge butit’s what I’ve wanted to do for a long time.”

McIntosh will work alongside his colleaguesfrom the US to further the internationalexpansion plans, and says they are alreadylooking at new projects in Japan and Asia.

Additions to the company’s timeshareportfolio may not necessarily be in the formcurrently seen in Scotland and Portugal however.

McIntosh explained: “We will be looking atbusiness opportunities along various businessmodels for the vacation club. It might be thatHilton is the primary developer or we mightlook at things such as licence agreements andfranchises similar to the model we operate inEgypt, or even affiliations.”

MANAGING CHANGEMcIntosh’s career, and the Craigendarroch resortitself, have seen many changes and challengesover the past quarter of a century.

Following a hotel management course at acollege in Edinburgh, McIntosh, originallyfrom Nairn in Scotland, joined a hotel chainin London and worked both in the city and

TEAM WORK: HIGVC AND GROUP RCI“Our relationship with Group RCI goesback to the opening of our first resort,Coylumbridge in Scotland, in 1980 inour pre-Hilton days.

“The Hilton Group took over theproperties in the mid-1990s and Group RCI was chosen as an essentialelement to be integrated into the thennewly-launched HIGVC.

“Today, Group RCI operates anumber of our back office systemsfrom its Cork call centre, while our US-based sister company HGVC isgiven the same support from GroupRCI’s US call centres. That supportincludes the handling of some of ourbookings and day-to-day running ofHIGVC’s business.

“One of the biggest and mostcrucial areas of support we receivefrom Group RCI is in investigating andidentifying business opportunities.Group RCI deals with a lotof people across theinternational hospitalityindustry and its businessdevelopment team feeds usleads which have proven tobe very useful.

“Having the ability tomeet so many people,Group RCI works hard toconnect the right peopletogether to createpartnerships that will helpto grow the business.”Richard McIntosh, MD, HIGVC

The Hilton International Grand Vacations Company (HIGVC)is set for worldwide expansion. GAYLE GREEN talks to theman who will be taking the company from its Scottish basetowards growth in Europe and the Middle East.

Richard McIntoshfaces an excitingnew era in his careeras he is tasked withexpanding HIGVCoperationsthroughout Europeand beyond, as wellas taking on the OTEchairmanship fromOctober this year.

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timeshare arm of the business the attention itdeserved and, in doing so, he proved thatluxurious hotels located next to timesharelodges and apartments could be a winningcombination.

He said: “The biggest challenge is the factthat often hotel operators view timeshare ascompetition, but we have statistics toshow that when somebody purchases atimeshare they go on to stay in thecompany’s sister hotels more thanpreviously because their loyalty to thegroup brand increases.

“On average, occupancy at ourtimeshare properties runs at 95 per cent-plus year round, so timeshare brings clientsto the group’s hotels throughout the year. Inthis way, the captive audience using ourcombined site facilities automatically increasesthe spend into our hotels.”

The takeovers have also been good forMcIntosh on a personal level, enabling him toclimb the career ladder. He added: “I’ve beenreally fortunate in being able to progress mycareer throughout the changes within thecompany and being able to keep myCraigendarroch base at the same time, whiledeveloping a strong, albeit small, team ofcolleagues.”

TAKING THE OTE CHAIRAnd there is soon to be a furtherdevelopment in McIntosh’s business life.From October this year he is set to take onthe role of OTE chairman for a two-yearperiod following the ratification of his non-executive appointment by a meeting of theOTE Board at the end of May in a move thatwill be good for both the HIGVC and theindustry body.

Top of page, clockwise from far left:External and internal views of HiltonDunkeld, a unit’s main living area at HiltonCoylumbridge, and bedroom, lounge andswimming pool facilities at HiltonCraigendarroch.

THE HIGVC PORTFOLIO■ Hilton Craigendarroch in RoyalDeeside, Scotland, comprises 99 lodges,plus a Hilton hotel with leisure facilities■ Hilton Coylumbridge in Speyside,Scotland, has 61 lodges with an adjacentHilton hotel with leisure facilities

■ Hilton Dunkeld inPerthshire, Scotland,comprises 22 lodgesand a Hilton hotelwith leisure facilities■ Hilton Vilamouraas Cascatas Resort& Spa on the

Algarve, left, became the first hotelresort in Portugal to carry the HiltonInternational flag when it opened itsdoors last year. Set in a four-hectaresite, the mixed-use resort comprises 69timeshare apartments, 69 residentialapartments, a five-star Hilton hotel, spaand golf complex.■ Hilton SharmDreams VacationClub in Sharm ElSheikh, Egypt, right,offers 95 studioapartments andvillas, spa and healthclub.

in Holland. He then spent five years workingat a golf and country club in Exeter, wherehe combined his hotel expertise with hislove of golf.

But it was the move to Craigendarroch in1985 that introduced him to the timeshare armof the industry. Having worked as the countryclub manager at the resort, he eventually joinedthe timeshare sales and marketing team,becoming the resort’s sales manager beforebeing appointed general manager overseeingboth the timeshare and hotel operations.

When the Stakis Group took overCraigendarroch in 1996, it brought with ittwo existing Scottish timeshare resorts,Dunkeld in Perthshire and Coylumbridge inSpeyside. It was only when the Hilton groupbought out Stakis in 1999 that the timeshareand hotel operations at each resort were onceagain separated, with McIntosh being given aremit for the group’s timeshare operation,HIGVC, and the job of investigating a varietyof expansion opportunities across the globe.

Given the number of takeovers and changes,McIntosh faced many challenges during thecourse of HIGVC’s development. He said: “Thebiggest challenge with each takeover has beenpushing to expand the timeshare side of thebusiness. The Scottish timeshare resorts broughtacross with the Stakis takeover were given a verylow priority.

“I was working for a company where thehotel operation accounted for 99 per cent ofbusiness activities and so, inevitably, timesharewas always going to get a low focus,” he said.“It was the same with the Hilton groupacquisition, because its leadership had noexperience of timeshare or understanding of itstrue potential.”

McIntosh worked hard to give the V

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TOTALTURNAROUND

hen Simon Jackson becamemanaging director at

Macdonald Hotels & Resorts in2004, he was told the

company’s failing timesharedivision was not performing well. Thechoice was simple – turn it aroundquickly or there may not be a future.

Jackson was clearly the right man in theright place at the right time. His CV describessomeone who likes a challenge. He leftthriving travel tour operator, Airtours Holidays,to join ailing Sunterra in the US which, at thetime, was in Chapter 11 bankruptcy.

So for Jackson, turning roundMacdonald’s nine timeshare sites – whichthe company acquired in 2001 after aperiod of managing them for BarrattInternational Leisure – it was simply a caseof rolling up his sleeves and starting again.

And the result was a business turnaroundthat put smiles on the faces of the group’s topmanagement. After only a year on the project,Jackson had achieved a break-even point forthe timeshare operation. Today the business isturning a multi-million pound profit.

INVESTMENT AND COMMITMENTJackson took a year-by-year approach to thetask, starting with working out where thingshad started to go wrong.

He said: “There had been no properinvestment in the product for many yearsand the properties and public areas were ina pretty bad state of repair. This had naturallycaused a great deal of discontent among theowners, who were paying an annual feeand, in their view, not seeing much for it.There was little communication between thecompany and the owners’ representatives,

and the relationship was problematic andsometimes confrontational.

“We didn’t have a good reputationamong the owners and lots of them wantedto get out of the system. On top of that, theindustry as a whole was suffering from abad period of press coverage and seen as aworld of scammers by the public at large.

“I had to take a long hard look at thisand told the owners that we were going tochange our ways. We had to look atourselves, come clean and be honest aboutwhat we had done wrong. We sat downwith the club committees and said ‘this ishow we have performed and this is whythere is so much discontent’. That’s a veryhard thing for a company to do, but it wasreally welcomed by the owners’representatives and opened up regularcommunication between us.”

ENGAGING OWNERSA policy of engagement followed which sawthe introduction of quarterly resort and newsupdates sent out to owners. Newsletters gavea breakdown of how owners’ money wasbeing spent, as well as news of services andexclusive offers.

Jackson said: “We brought in pre-arrivalpacks for owners and exchange guests thattold them all about the resort they wereabout to visit.”

A critical factor in the revival wasestablishing an official resolution that noactions should be promised to ownersunless there was a certainty they would becarried out. Jackson explained: “Lack ofdelivery was a big problem. We said that ifanyone committed money to a project of,for example, unit enhancements, then that

must be deliverable and within a standardtime frame. The results of this resolutionbrought our owners back on board, andtheir response has been superb.

“Between 2005 and the end of this yearMacdonald Resorts and our owners have spent£15.5 million on improvements collectivelyacross all our resort sites. These improvementshave gone down so well that ownerrepresentatives are now saying they want tospend more – which means we will too.”

HARD CHOICESJackson made other changes too. There wasa reappraisal of resort staff as a result ofwhich some had to be asked to leave. “Therewere tough decisions to make about long-standing members of staff who were notgoing to change,” said Jackson. “The resortmanagement was quite unpopular for atime, but these changes had to be made.”

He also went about tackling the issue ofstaff training at all Macdonald’s timeshareresorts. Employees complained of neverhaving received proper training and, in hisview, had fallen into a pattern of “justmaking up how they did things”.

Jackson introduced core standards andinduction courses which, he said, raisedmorale “massively”. Staff benefits were alsoimplemented and included incentiveschemes such as awarding holidays and cashvouchers to long-serving employees.

The refurbishment process and materialsprocurement was centralised by Jackson toenable the timeshare division to takeadvantage of the Macdonald group’s widersupply chain to get better quality materialsat a reduced cost. He said: “Everything wasbeing bought on a piecemeal basis, so we

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

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

CASE STUDY

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said to our owners ‘let us tap into our grouphotel supply chain’. We buy wisely for thehotels, so why shouldn’t we do the same forthe timeshare properties? We then showedour owners what could be achieved byopening up a show lodge for them to viewat Macdonald Dalfaber Golf & Country Cluband then asked them if they wanted thisstandard across the other resorts.”

Today the improvement in theMacdonald timeshare offering speaks foritself. Eight of the group’s nine RCI-affiliatedproperties are RCI Gold Crown resorts,while the other has been awarded RCI SilverCrown status.

And this achievement has delightedJackson. He said: “In achieving eight RCIGold Crown resorts and an RCI Silver Crownaward across our nine RCI-affiliatedproperties, we had some fundamental help.The Group RCI team suggested I go for theawards and when I chaired my first owners’AGM in 2004, I knew they were right!Group RCI has really contributed to ourimprovement and has supported us

throughout, believing in the changes wesaid we would make.”

During the past 18 months Jackson andhis resort operations teams have met on amonthly basis with Group RCI’s affiliateservices managers to discuss how they cansupport the relationship with their mutualcustomers. Jackson added: “Our Group RCIteam has stood with us throughout thewhole process and continues to support us inthis way.”

NO GAIN WITHOUT PAINThe picture looks good for Macdonald Resortsright now. But Jackson isn’t so sure things areas rosy in the timeshare industry at large.

He said: “Along with altering publicperceptions about the timeshare product,which are still hugely negative, the industryneeds to address issues such as exit strategies.

“The number of people today who wantto get out of the system is huge. For instance,the grown-up children of owners don’t wanttimeshares passed on to them, no matter howgreat a time they had there as youngsters,

because they fear the responsibility of themanagement fees and the difficulty in selling,should the need arise.

“It’s time for the industry to change itsways at point of sale and change the way theproduct is sold. For example, instead of sellingin perpetuity, perhaps we should be workingwith a lease system for, say, 25 years or evenless. Some operators including MacdonaldResorts do this, but does the public at largeunderstand this type of product offering, ordo they think it is just another scam? If it’s thelatter then we must act.

“While there are still older people whocan’t sell their timeshare when they need toand don’t know which way to turn, is it anywonder the consumer perception oftimeshare is so negative?

“The industry as a whole must cometogether to address these problems and faceup to them honestly and openly to give usall a better future.

“The timeshare product is fantastic asour thousands of owners tell us – so whatis the problem?” V

C Once owners at Macdonald Resorts properties could see their moneywas being used to transform properties such as Macdonald Dona LolaResort in Malaga, Spain, top, and Garten Lodge at Macdonald Dalfaber Golf & Country Club, Aviemore, pictured after recent refurbishments, they wanted to spend more on the maintenance of their resorts.

C The newly-landscaped gardens of Macdonald Elmers CourtCountry Club in Hampshire, UK, top, and leisure facilities such as thepool area at the Macdonald Dona Lola Resort in Malaga, Spain, senda message to prospective purchasers and existing owners that theseare properties benefiting from healthy levels of investment.

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Investing in sustainabilityver the last 20 years, ourmessage has been veryeconomics focused, butnow we have to explain to

the world that since travel andtourism is one of the major sectors,we have obligations that go beyondour economic impact.”

So said Jean-Claude Baumgarten,president and CEO of the WorldTravel & Tourism Council (WTTC),speaking at the recent Global Travel& Tourism Summit held in Dubai.

The summit was attended bymore than 1,100 delegates from 75countries, including representativesfrom the timeshare industry.Delegates were tasked withidentifying the major challengesfacing today’s tourism and travelindustry and the need to protectthe planet was one debate whichdominated discussions.

Geoffrey Kent, chairman andCEO, Abercrombie and Kent, set thescene. He told delegates: “Thequestion is no longer whether ornot sustainable tourism works, butrather how we can further the stepsalready taken towards addressingclimate change, nurturing – ratherthan depleting – natural andcultural resources, and preservingour heritage for the enjoyment offuture generations.”

The theme was also taken up by Stephen Holmes, chairman,president and CEO, WyndhamWorldwide Corporation, Group RCI’s parent company.

He said: “There is a newgeneration of travellers out therewho are conscious of theenvironment, so we as an industryhave to do more to respond totheir needs. When going into anew market, we are mindful ofenvironmental jurisdictions and weare putting in standards for ourfranchisees to follow.”

Sustainability, as it relates to thetravel and tourism sector, embracesthe challenges of controllingpollution – witness the difficultiesof Beijing as it gears up for theOlympic Games – climate change,the alleviation of poverty, foodshortages in developing nationswhich are also the emerging newtravel destinations, and establishing‘green’ protocols for theconstruction of new builds.

Delegates heard that being ableto balance economic growth withstewardship of the planet willdominate the travel and tourismagenda for decades. To achieve thatbalance, some speakers believed thesector would have to forge linkswith groups that have traditionallyopposed it, such as human rightsadvocates who have criticised labourpractises in the tourism industry,and environmental associations thathave blocked resort developments.

Philippe Bourguignon, vicechairman of Revolution Places, agroup of lifestyle resorts adheringto sustainable principles, said: “Ifyou put green activists together

with regular operators, you cancome up with new ideas. In orderto create a culture of innovation,one needs to mix people fromdifferent industries and, if possible,different nationalities.”

Sonu Shivdasani, the founder ofThe Six Senses Resorts & Spas,suggested that a viable target forthe hotel industry might be toreduce its carbon emissions by 50per cent by 2013. Gerald Lawless,executive chairman, JumeirahGroup, pointed out the need formore research data on which tobase a strategy: “We need facts andfigures so that we can address theissue – even if the numbers are notwhat we would like to hear.”

Airlines have come under attackfor being among the worst polluterson the planet and Habib Fekih,president for Airbus in the MiddleEast, found himself having to defendhis company’s new A380 craft.

He explained: “The A380 burnsless fuel per passenger per 100kilometres than older planes and ithas very low emissions, both interms of noise and CO2. Moreover,because of its greater capacity, theA380 can carry lots morepassengers at one time, withoutairlines having to add slots.”

The debate made delegatesaware of the importance ofaddressing these challenges if theyare to preserve the greatest asset oftheir business – a healthy andattractive environment.

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

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

EVENT REPORT

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CFrom the top:Jean-ClaudeBaumgarten.Geoffrey Kent.Stephen Holmes.Sonu Shivdasani.Gerald Lawless.Habib Fekih.

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MAP– THE NEW MERCHANT OF VENICE

he industry is about to see the launchof one of the most unusual timeshare

properties yet. Mary Anne Pulé has justsealed a deal with Floating House, anItalian company specialising in boating, to finance a timeshare operation basedaround a small fleet of custom-builtluxury houseboats that will be moored inthe heart of the iconic Italian city ofVenice.

Pulé, known to many as one of Malta’sforemost marketers, plans to unveil the firstof these vessels in March 2009. The productwill be marketed under the brand Venice onWater, and Pulé is confident her Venetianfloating homes will appeal to a widemarket attracted by their unique appeal.

She said: “This is going to be a high-end and luxurious product. In fact, thetimeshare weeks will sell for between€18,000 and €20,000 – a price thatreflects the year-round, high-season statusof Venice.

Pulé says initial interest in herhouseboats has been higher thanexpected, even before MAP started toformally market the project. MAP’s salesand marketing director, Richard Alden, isconfident the first boat will sell out beforeit even gets on to the water.

Alden told RCI Ventures: “The more

novel the concept, the easier it is to sell –and we have had a number of salesalready.

“With this project, we wanted to stepaway from the usual self-cateringapartment. This is different from everyother timeshare around – and it’s in alocation where there isn’t much timeshareat all. Living on a boat in one of theworld’s most romantic cities will give ourowners a totally new and uniqueexperience.”

MAP, which is based in Sliema, Malta,and has a staff of more than 100, willpromote the new venture primarilythrough telemarketing, bolstered by someadvertising in the US. Even in these earlystages, Pulé and Alden have generated asmany as 4,000 leads simply by contactingpeople on the MAP database.

Pulé accepts customers may not wantto spend weeks on end floating aroundthe Venetian waterways, so a more flexibleapproach has been adopted that enablescustomers to spend a few nights on thewater and a few nights ashore.

Venice on Water is initially beingmarketed in Pule’s home territory ofMalta, a market she knows well and whereshe hopes her product will appeal to theisland’s 15,000 boat owners.

She explained: “I have experience inthe Maltese market and I know the peoplelove to go abroad and to go boating.”

The next source market in Pulé’s sightsis the US, where MAP is already involvedin the marketing of the East Clare GolfHoliday Village in Ireland. MAP also plansto turn its attention to the UK market.

The initial plan is to start with onehouseboat. However, since there are 10licenses available from the sales company,the long-term aim is to build up to thisnumber, giving MAP 500 weeks to sell.Pulé feels confident the success of thisproject will eventually lead to morelicenses being made available.

The appeal of these luxurious floatingapartments isn’t confined to boating types.Anyone wanting to jump aboard can hiretheir own skipper for an extra fee or canopt to learn the ropes in a couple ofhours.

Pulé said: “If a customer can clearlypilot the boat and establish themselves as agood skipper, there is no reason why theycan’t go further afield to explore the riversof Italy. But for those wanting to stay inVenice, there’s lots to do. There’s the Lidoand plenty of islands. We’re also planningto provide 25 itineraries to make it easierfor people to plan their routes.”

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

DEVELOPER

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ABOUT RICHARD ALDEN


experience in timeshare marketingSARA MACEFIELD reports.

The houseboats, measuring nine by threeand a half metres, can accommodate up tosix guests. The vessels will take four monthsto construct and are being purpose-built inMalta.

The hulls will be fabricated from a lightaluminium which is more durable thanother materials and is less expensive tomaintain. The hulls have also beenspecifically designed for the shallow watersof the Venetian Lagoon.

The craft will have two bedrooms withensuite facilities – including a bath. Therewill be a kitchen/galley and living area plusa sun deck outside. A separate cockpit willhouse the boat’s GPS satellite navigationsystem.

For Pulé, Venice on Water represents along-held ambition to do her own thing andshe was spurred on by what she sees as thelack of new timeshare developments inEurope.

She said: “As a developer, to build a resortwould cost millions, but I can invest insomething like this for a fraction of that costand still be in control.”

Then it was a question of finding theright opportunity, and this came aboutthrough Group RCI, which invited the MAPteam to meet developers and view somepotential timeshare projects in Italy. “We met

with some people from Venice who had thelicenses and were looking for a partner andwe felt Venice would be ideal,” said Pulé.

Negotiations and completion of the legalprocess has taken two years and is nearingcompletion. With the project about to setsail, Pulé hopes this will be her steppingstone to other development.

It’s an area where she feels she can useher experience of marketing timeshareresorts to her advantage. She added: “I knowexactly what the client wants and needs.”

But the MAP managing director, whofounded the company in 1986, is keen tostress that this new direction will not affecther existing operation in Malta, where shemarkets some of the island’s most prominentproperties.

She said: “We value our developerpartners. Infact, our developers are veryexcited about adding Venice on Water to theoverall industry portfolio of exchangeoptions. They believe the more holidayoptions our owners have, then the morevalue they will get out of their timeshareownership.

“I want to bring my learnings andexperience as a developer to the marketingarm of my business, as it can only deepenmy understanding of my developer clientsand strengthen our relationship.”

Richard Alden

is group sales

and marketing

director for

MAP

Destinations

and has 12

years’ experience in the timeshare

industry.

In 1996 he was a sales

manager at Anfi Beach Club in

Gran Canaria, before moving to

Malta where he became sales

manager for the Island Residence

Club @ Radisson SAS Golden

Sands Resort & Spa.

In 2004 he joined MAP

Destinations, initially as sales

director, following which he was

appointed to his present role.

Top of page: These computer-generatedimages of the Venice on Water houseboatsillustrate the comfort guests will be able toenjoy while cruising around the waterwaysof the Italian city. Far right: Mary Ann Pulé.V

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QUOTE: FOR THOSE OF US THAT WERE AROUND IN THE LAST RECESSION, IT WAS DURING THESE TIMES THAT WE SAW TIMESHARE FLOURISH. AND NOW THEINGREDIENTS ARE IN PLACE FOR A REPEAT PERFORMANCE. RON HOWELL

FINAL CALL

Well if we are to believeeverything we read in the

newspapers, we might as wellclose up shop and go home. Butthe truth is that the leisureindustry, and I includetimeshare in that category, isfar more robust and resilientthan many people think.

Of course some sectors arebeing negatively impacted bythe current economic cycle,particularly the wholly-ownedsecond-home markets in Spain,the UK and parts of the US.

The timeshare industry, onthe other hand, is much morediverse today than it was 20years ago and that will protect itfrom the worst a recession canthrow at it. Products such asfractionals, destination clubs,mixed-use resorts and otherswhich comprise a combinationof hotel, whole ownership andtimeshare have a great deal offlexibility, both in terms ofusage and on the financial front.

Some of these productscome with the added bonus ofbelonging to established andprofessional rental andexchange programmes whichprovide owners with options togenerate a rental income fromthe unused time in theirproperties. This turns the luxury

of a holiday home into aworking asset, paying its ownway while still being there forholidays.

The profile of the industry’stypical customer gives itanother advantage. Agedbetween 40 and 65 years of age,largely homeowners with goodcredit ratings, these customersare well insulated from thecurrent financial crises.

Expansion and growth in thetimeshare industry has beenstifled in the last 10 years dueto the increased popularity ofthe whole ownership of holidayhomes, fuelled by soaringproperty prices. It’s nowbecoming very apparent,however, that in parts of the UK,US, Spain and, to a lesserdegree, Portugal, propertyprices are falling dramatically.This, coupled with the fact thatmany second-home speculatorshave suffered a reversal in theirfortunes and guaranteed rentalperiods have expired, makesthe timeshare product and itscousins look like the moreattractive deal.

In today’s climateconsumers are likely to bemuch more amenable topurchasing a timeshare productwith all its associated exchange

holiday benefits thanpurchasing a second home. Awholly-owned property does notoffer them the flexibility oroptions of a timeshare and, withthe current fall in house values,a full purchase no longerguarantees a return oninvestment.

Furthermore many propertydevelopers in these areas haveeither stopped building or havedevelopments under way thatremain unsold.

It’s no surprise to see asignificant rise in thesedevelopments being re-designated as fractionaldevelopments and sold asquarter, eighth, sixteenthshares or even holiday rentals.While this alternative strategyhas merit, the difficulty for thetraditional property developerwill be finding the sales andmarketing expertise. This iswhere the timeshare marketcan come into its own since ithas the experience andexpertise to capitalise on thecurrent climate.

For those of us that werearound in the last recession, itwas during these times that wesaw timeshare flourish. And nowthe ingredients are in placefor a repeat performance.

‘‘

RON HOWELL, sales director, HMC Funding,has given some thought to how timeshare willfare in these times of financial turmoil.Against an economic backdrop of credit crisis,rising interest rates and repossessions, heevaluates the strengths of the industry.

WEATHERING THE STORM

’’

HMC Funding is one ofthe leading providersof financial products tocustomers, marketersand developers in thehospitality and cruisefinance, timeshare,fractional and wholeownership industries,across the UK, Europe,North America, theMiddle and Far East.

HMC Funding is apartner of ClydesdaleFinancial ServicesLimited, which isbacked by BarclaysBank PLC, one of theUK’s leading financialinstitutions operatingin the timesharemarket.

ABOUT HMC FUNDING

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Documents

RCI Ventures: July 2008