T I M E S H A R E MATTERS
A strategic overview of traditional timeshare and new shared ownership products and services by the UK chapter of the Organisation for Timeshare in Europe
1. Message from the Chairman
2. Resort Development
3. Changing Attitudes
4. Media Relations
5. Facts and Figures
6. New and Developing Markets
7. The Versatility of Shared Ownership
8. Government Relations
9. Other Key Issues
10. 6 Good Reasons to Join the Ranks of OTE
11. The Expanding Range of Timeshare Products
12. The A-Z of Timeshare
February 2006
21
Tourism makes a significant contribution to the economy of the United Kingdom - and an integral part of that is timeshare.
Conservative estimates show that timeshare owners bring at least £205million a year to the UK. Over the past decade that figure has trebled and will likely increase again by a similar level over the next 10 years.
Few can doubt that timeshare is a robust business. Since its inception in the early 1970s, it has been on a steep growth curve. And today the UK remains at the forefront of timeshare development, representing more owner-families than any other country in Europe.
The UK also benefits from a range of exceptionally high quality resorts that regularly attract record levels of occupancy. At the same time local firms, such as shops and service outlets, profit from the business that holiday ownership brings to an area.
Over the years timeshare’s image has been enhanced by resorts at the top end of the market, many of them in the four- or five-star category. Entrepreneurs and big-name hospitality groups have done much to raise awareness of the quality holidays that timeshare has come to represent.
Based on research undertaken by the Organisation for Timeshare in Europe (OTE), I am confident that holiday ownership in the UK will continue to grow at a healthy rate and make an even greater contribution to domestic tourism and the national economy. As the comments below from the Greek minister of tourism indicate, timeshare has shown positive signs that it can be a major vehicle for expansion.
Frank W Chapman
Chairman of OTE UK
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A growing confidence in timeshare coupled with new products and services has spurred the growth of quality resorts by big-name leisure groups and independent entrepreneurs. Here are just some of them.
· Club La Costa Resorts & Hotels (CLC) is actively looking to expand its resort portfolio in the UK and mainland Europe. It is in active negotiation for three properties in Scotland, Wales and south-western England.
Recently it completed the construction of 55 lodges at Duchally Country Estate in Perthshire. Set in 27 acres of national parkland, the property is only an hour’s drive from the main airports of Edinburgh and Glasgow.
When CLC acquired Duchally in 1998, it was a small, country house hotel with 12 bedrooms and outline permission for the lodges. With construction of the lodges now complete, CLC has also added a leisure centre with swimming pool and sauna.
In mainland Europe, the company is also engaged in a strategy of expansion by acquisition. In recent weeks it has had lengthy and detailed discussions about potential properties in Turkey and Cyprus – destinations popular with UK holidaymakers.
Currently CLC has a member base of 50,000, half of which are British nationals. The remainder comprise French, Spanish, German and Russian club members.
The company has 20 of its own resorts and a portfolio of close to 200 affiliated properties worldwide. With a growing membership, it maintains strategic business alliances as it continues to expand in the travel and real estate markets.
· De Vere Resort Ownership, the timeshare division of the hotel and leisure group, has invested £50million in a golf and leisure resort on a 300-acre site by Loch Lomond in Scotland.
The Carrick at Cameron House is the fourth timeshare development in the De Vere portfolio. On completion it will have 18 luxury mansion house apartments, 78 detached lodges, a championship golf course, world-class spa and extensive leisure facilities.
A third of the development will be committed to a nature reserve for the protection and enhancement of local wildlife.
De Vere also operates timeshare properties at Belton Woods, Lincolnshire, Slaley Hall, Northumberland, and Cameron House in Scotland.
· Hilton International Grand Vacations Company (HIGVC) has welcomed its first guests to six new timeshare lodges at Hilton Dunkeld in Perthshire, Scotland, bringing the total number available to 22.
The resort – part of a 280-acre estate and 50 miles from the Scottish capital, Edinburgh – was once the Highland retreat of the Duke of Atholl.
HIGVC also added a new resort to its portfolio of properties in the UK and Ireland: the Mount Wolseley Hilton Hotel, Spa & Country Club in southern Ireland where it plans to develop 56 lodges over the next three to four years.
Situated 40 miles from Dublin, the 143-room hotel has a championship golf course and a state-of-the-art spa.
HIGVC currently operates four resorts in Scotland and Egypt. A further resort in Vilamoura, Portugal, is due to open in 2007.
§ Seasons Holidays has announced the completion of 29 new holiday cottages at Whitbarrow Village in England’s Lake District. Last summer official ceremonies marked the formal opening of this £3million development.
The cottages have all been sold ‘off plan’ through a national advertising campaign.
The concept for the new Kirkstone Cottages allowed owners to purchase them as holiday homes on the basis that they could enjoy exclusive occupancy for four weeks each year for the first 10 years.
The remaining time is being hired out to Seasons’ 18,000-member base as well as to the travel company Hoseasons to provide owners with a rental income.
· Anfi Tauro is the latest project in Gran Canaria to be developed by the Anfi Group. Some five kilometres from its four other developments – Anfi Beach Club, Club Puerto Anfi, Club Monte Anfi and Club Gran Anfi – this latest resort will comprise 1,500 timeshare units as well as an 18-hole golf course, commercial centre, private marina and freehold properties.
According to Calvin Lucock, general director, the first phase of 119 timeshare units at Anfi Tauro will be ready for occupancy in September. Some 35 per cent of the units are already sold. Forecast completion for sell-out is 2012.
Currently the owner base of all Anfi resorts totals 30,000. Some 40 per cent comprise British nationals; most of the remainder are German and Scandinavian.
· One of the biggest owners of hotel properties in Europe has acquired Holiday Club Finland Oy whose interests include nine resorts and six spa hotels in the country and a spa hotel in Sweden.
London & Regional Properties (L&R) agreed the transaction with Procurator Oy CapMan’s investment funds, the main owners of the Finnish company.
In acquiring the Nordic company, L&R is working with the Finnish company on the future development of Holiday Club in northern Europe and “marking the move of our hotels’ investment business into timeshare”.
As co-investors, L&R is collaborating with the Finnish company on future developments of Holiday Club in northern Europe, Russia and the Baltic as well as on other timeshare opportunities throughout Europe.
London and Regional Properties is the owner of more than 60 hotels, comprising some 10,000 rooms and is one of the biggest, private property companies in the United Kingdom. Its real estate portfolio is valued at more than €5billion.
· In early 2005 the parent company of Clube Praia de Oura and Oura Praia Hotels - one of Portugal’s most successful timeshare establishments - acquired the RMI Consortium and subsequently formed Petchey Leisure. The Portuguese property has some 700 apartments and 18,500 owners.
Petchey Leisure plans to continue to develop the growth strategy of the former RMI either through organic growth or acquisition. Its linkage with Club Praia de Oura – the group has an overall membership of 52,000 – will lead to “greater synergies and benefits for both the businesses and its members”.
At the time of the buyout, RMI owned or managed six resorts in the UK, Tenerife, mainland Spain and Thailand. It also owned inventory at 24 other resorts in 22 countries, providing its 28,000 members with a wide choice of holidays.
In a separate development, Petchey Leisure acquired the Montechoro Beach Club, an apartment complex at Praia da Oura on the Algarve comprising 177 apartments and 4,391 timeshare owners.
With these acquisitions, the company solidified and enhanced its commitment to all owners that they belonged to an innovative and dynamic timeshare group.
· Sol Meliá, the Spanish hospitality giant, unveiled plans to expand its timeshare arm – Sol Meliá Vacation Club (SMVC) – in Europe. Initial projects include resorts in the Canary Islands followed by Mallorca and mainland Spain. Future developments could also include destinations in the UK, France and Italy.
This latest development mirrors SMVC’s relationship with Cendant subsidiary RCI in the Americas and the Caribbean. SMVC is one of the largest vacation clubs in the world.
In 2005 SMVC launched sales and marketing programmes in Europe in order to establish a timeshare presence in the medium term.
In October 2003, Sol Meliá announced a strategic alliance with Cendant Corporation. In a separate agreement, RCI agreed to provide consultancy, exchange and other networking services.
By expanding its existing association with the exchange company, Sol Meliá said it would “help achieve our strategic objective to develop and internationalise our timeshare business and provide opportunities for greater growth and profitability”.
The participation of OTE in the annual conference in Morocco of the Association of British Travel Agents is tangible evidence of how the contribution of timeshare to the world of tourism is now being recognised.
In a special breakout session, Preben Vestdam (Cendant Leisure Real Estate Solutions) and Robin Mills (Petchey Leisure) – both members of the OTE Board of Directors – made presentations extolling the opportunities and benefits for travel agents of marketing timeshare products and services.
Under the title ‘Time to Share’, Mr Vestdam covered the range of shared ownership products, from traditional timeshare to fractionals, Private Residence Clubs (PRCs) and condo-hotels. He told delegates that in 2004 timeshare sales exceeded $10billion and over the past decade timeshare had registered double-digit growth every year.
In his address, Mr Mills said timeshare was a “must have” for the hospitality industry, was a quality holiday product and a booming sector of the global tourism. There were positive benefits to gain from marketing timeshare – namely by selling inspection visits, trial products and offering a range of complementary services such as flights, insurance and car hire.
In the past timeshare had failed to be recognised as an integral part of the legitimate travel industry. That had now changed, said Mr Mills. There were great synergies emerging between travel and timeshare providing opportunities for great returns and a “win-win” situation.
A proactive public relations campaign has done much to reverse the negative public perceptions of timeshare in the United Kingdom.
At the same time the growing number of hospitality brands venturing into timeshare has also helped this welcomed trend.
While there is broad recognition among many journalists that timeshare represents value for money, there are still some whose doubts dwell on the ‘hard-sell’ tactics of rogue operators whose activities in the past have spawned negative publicity, particularly in the tabloid press.
Thankfully this type of coverage is diminishing due in part to an OTE programme where journalists are offered information guidelines and best practice advice.
Augmenting those efforts is the recognition that the Organisation for Timeshare in Europe is a reputable trade body able to speak authoritatively on industry issues.
For the second year running, OTE hosted a roundtable meeting in September for journalists that resulted in positive news coverage. Industry participants included Frank Chapman, Clowance Holdings, Beverley Hoyle, RCI, Craig Mitchell, De Vere Resort Ownership, Richard McIntosh, Hilton International Grand Vacation Club, and Peter van der Mark, OTE.
Over the past two years, visits to UK resorts by selective journalists have generated more positive coverage; the programme will continue in 2006.
Other activities: the production of a series of press releases that resulted in good coverage, especially in regional newspapers and broadcasting outlets.
Particularly successful was a news announcement highlighting ‘OTE’s Top Tips for Purchasing Timeshare This Summer’.
In 2005 OTE logged a total of 141 articles directly relating to timeshare of which 58 per cent were positive. Many acknowledge quality accommodation and resort facilities and credit the fact that the perception of timeshare among consumers has changed for the better.
Of those articles deemed ‘negative,’ they often refer erroneously to timeshare when the stories relate to dubious holiday clubs and ‘free’ holiday offers.
Others refer to developments associated with John Palmer, convicted of conspiracy to defraud in 2001.
UK INFORMATION
· Number of UK Resorts 112
· Total Number of units 3,891
· Average number of units per resort 35
· Year round average occupancy levels 85%
· Number of UK families owning timeshare Approx. 500,000
· Over 70,000 British families own in the UK (75% of total), followed by Germans (11,000)
· Average size of travelling party 2.3
· Total visitor spend £205 million (without maintenance fees or other)