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Pending Government Approvals of Timeshare Laws, Vacation Ownership
Set to Take Off in Dubai, Saudi Arabia, Jordan
(Dubai, March 6 2007) - More than 150 movers and shakers with an interest in being at the forefront of the region’s anticipated boom in the timeshare sector met at the third Vacation Ownership Investment Conference (VOIC 2007) in Dubai (yesterday March 6 2007). 
 
These included industry chiefs representing Marriott Vacation Club International, Rotana Hotels, Resorts and Suites, Nakheel and Dubai Economic Department. In addition, both Saudi Arabia and Jordan sent delegations representing their respective tourism authorities. Dubai-based Arabian Falcon, one of the region’s pioneers in timeshare marketing and VOIC sponsor was also present.
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From left; Peter C Yesawich Chairman and chief executive officer Yesawich, Pepperdine Brown & Russell (YPB&R), Craig M. Nash, Chairman and CEO, Interval International and David Clifton, Interval’s managing director for EMEA and Asia at the Vacation Ownership Investment Conference, the third timeshare conference in Dubai in three years held at Arabian Court, Royal Mirage, Dubai, United Arab Emirates. A leading voice in the global marketing of travel, leisure and lifestyle services, Peter C Yesawich, addressed the subject of destination marketing at the VOIC conference.
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David Clifton, Interval’s managing director for EMEA and Asia, the promoter of the VOIC forum, told the audience that Interval remains committed to the growth of vacation ownership, pending key Government approvals of ‘timeshare’ laws to help regulate the industry. Dubai is said to be on the brink of announcing such regulation.
 
“Interval is now in its third decade of operation and works a network of 2,200 world-class affiliated resorts, for more than 1.8 million member families. We know that vacation ownership, or timeshare as it is also known, works – and how to ensure that it works well for all stakeholders.
 
“Our aim has been to encourage sector regulation and thus provide a platform to develop a well-managed, regulated timeshare industry here in the region,” he said.
 
He shared that Dubai is expected to announce its bill to help govern the development of timeshare – also known by variations such as vacation ownership – and fractional ownership and at ‘any time now’.
 
“Interval and other key partners at Government and commercial levels have collaborated to help craft a bill over the last three years that is good for Dubai and good for the sector. 
 
“We are hopeful that it will be passed during 2007, and VOIC is well-timed to be an enabler to promote industry discussions on this bill.”
 
Timeshare explained
 
Clifton explained that timeshare or vacation ownership is the concept of taking a resort or urban accommodation unit and dividing its use rights each year into increments of time such as a week or a month.  
 
“These use rights are then sold to the consumer either in perpetuity or for a fixed period of time such as 20, 30 or more years. 
 
“Consumers only have to pay a one time purchase price for the use rights and an annual maintenance fee to cover the cost of items such as cleaning, linens, check-in and refurbishment,” he said.
 
“Middle East has potential to boost timeshare growth …”
 says Interval International’s Craig Nash
 
Interval’s chairman and CEO, Craig M. Nash, said, “Several key factors that provide for a super timeshare city, namely, sun, sand and shopping! These factors coupled with top quality timeshare and fractional ownership products, usage flexibility and opportunities to exchange one’s destinations for other attractive global destinations will ensure consumer satisfaction and keep both developer and consumer interest in the long-run.”
 
Nash, a thirty-year industry veteran, stressed that timeshare is a sector that must be understood thoroughly and managed with respect. “This is a business model that once understood brings enormous value to the table of everyone involved – the developer, the operator and, ultimately, the consumer,” he said.
 
South African timeshare expert, Jose Ventura, says that “Fractional ownership and
private residence clubs are the hot alternative to second-home ownership…”
 
Meanwhile, a leading voice in the global fractional ownership market, Jose Ventura, addressed the benefits of fractional ownership and private residence clubs and cited the UAE as an attractive market for such development.
 
Fractional Ownership is described as providing an alternative property option ideal for those buyers who want to have their own (resort-based) freehold property (in the sun) but who do not want commit to outright ownership of a vacation property. 
 
Ventura, managing director of South Africa’s Pam Golding Vacation In Property (VIP) explained further:  “In-bound travellers to the UAE provide an interesting varied profile, with one segment best-described as top-level professionals - corporate executives, and entrepreneurs whose most precious asset is time. 
 
“These travellers, whether on a business trip or vacation, want high level luxury services and usually stay in up-scale hotels or condominiums. The general trend is they fast become a frequent visitor to destinations such as Dubai.  
 
“In the long run, they will prefer fractional ownership products which provide the amenities of a luxury home, combined with the benefits of a first class hotel, all at a small percentage of the cost and without the hassle of second home ownership or choosing expensive hotel products.”
 
“Condo hotels, a win-win for all investors…” says Joop Demes, managing director, 
Pam Golding Hospitality and Leisure Divisions
 
Joop Demes, managing director of Pam Golding Hospitality and Leisure Divisions shared the benefits of investing in ‘condo hotels’. He explained that there are three main models of condo hotel specification. 
 
“Concept ‘A’ is a hotel with a number of residential units in the same building with a separate entrance, lobby and elevators. Here the developer can typically sell units at a 10 per cent to 30 per cent premium compared to residential projects without a hotel component.”
 
He said that in mature markets, the ‘A’ condo-type is aimed directly at homebuyers so there is no rental pool programme to share the revenue. The owners have full access to all hotel facilities and the hotel operator stands to benefit through higher usage of hotel services, restaurants and spas. 
 
Concept ‘B’ is when a hotel has a number of residential units housed in an adjacent building, such as Dubai’s Grosvenor House, Shangri-la Hotel and the Fairmont Dubai.
 
Demes said that typically in the ‘B’ spec example, owners want holiday homes for approximately one to four months each year: “This allows the remaining months to go into a rental pool, with a typical 50:50 revenue split between the hotel and the owner.
 
“Here both parties stand to gain as the hotel gets increased inventory without capital investment risk, and the owner gets the benefit of full hotel facilities, plus rental income,” he explained.
 
In concept ‘C’, each hotel room is a separate condominium owned by an individual investor. Demes said that a percentage of the rental room revenue generated goes to the owners and they are on average allocated 28 days free stay each year. “The owner’s focus here is two fold: on return on investment (ROI) and on a place to stay, generally referred to as ‘life style investment,” he observed.
 
In an attempt to clarify how investors can benefit from condo hotels, Demes said : “From a developers point of view condo hotels are a great way to unlock capital in an existing hotel or to raise necessary equity for a new hotel. 
 
“It is a concept that allows minimum risk and the developer can end up with a debt-and equity-free operating company that owns the public and common areas and delivers an annual income.
 
“For the consumer – the eventual condo owners, it is an investment with great lifestyle elements and in today’s burgeoning hospitality and property market capital appreciation is near-guaranteed.
 
He went on to stress that hotel operators too can benefit a great deal as it means no investment in development but a management contract “on a plate”. 
 
“It is an easy way to expand rapidly and is in line with today’s global hospitality trend where most operators try to separate ownership from management,” he added.
 
Clifton concurred saying: “The Middle East, especially the UAE, has great potential to become one of the world’s fastest growing regions in the vacation ownership industry.”
 
ABOUT INTERVAL INTERNATIONAL

For more than 30 years Interval International has led the vacation ownership industry with its commitment to providing quality exchange services and other value added programmes to its vacation owning members and resort developers worldwide. Based in Miami, Florida, USA, Interval has a network of in excess of 2,200 resorts in over 75 countries and more than 1.8 million members through 28 offices in 19 countries.

Interval International is part of IAC, which operates leading and diversified businesses in sectors being transformed by the Internet, online and offline.  Other IAC companies include Ask.com, Citysearch, Entertainment Publications, HSN, LendingTree, and Ticketmaster.

Contact:

Interval International
Adrian Bascombe
+44 (0) 20 8336 9573
adrian.bascombe@intervalintl.com
www.vacationownershipinvestment.com

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Also See: The American Resort Development Association Examines the Growing Variety of Vacation Home Options / October 2006
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