Joint access to up-and-coming places

Timeshare, as we all know, used to be a dirty word. It conjured up images of over-zealous salesmen, nasty hidden clauses in dubious contracts and even sales of shares in properties that didn’t exist. But the industry has been undergoing something of a revolution worldwide over the past five years, and its cleaned-up act is leading not just to a renewed appetite for the concept but also its spread, in various guises, to previously unconquered territories.


In 1999 the Global Alliance for Timeshare Excellence was set up with a brief to establish a worldwide code of conduct for the industry and lay down best-practice guidelines. Improvements such as less high-pressure sales tactics, the introduction of cooling-off periods after people have signed up and well-oiled, speedy complaints procedures have all driven expansion.

Overall, the timeshare, or shared ownership, concept is now recording 12 per cent growth globally, according to Ragatz Associates, the US-based international research company for the industry. In emerging markets, such as Croatia, Hungary and Turkey, the timeshare company RCI Europe and Middle East now has 85 resorts on its books – a 25 per cent increase from 2000 (against just 8 per cent growth across the rest of Europe) – and 31,000 individual members who own timeshares in these countries – a 26 per cent rise.

Recent figures from the Organisation for Timeshare in Europe (OTE), a trade body that also covers North Africa and the Middle East, confirm the trend, showing that 1m Britons now own a timeshare. And, while most are in traditional holiday home areas (600,000 in Spain and the Canary Islands, 150,000 in the UK itself), the rest are in new timeshare regions such as Portugal, Malta, Greece and Cyprus and longer-standing emerging markets, including Bulgaria, the Czech Republic, Hungary and Croatia. The latter recently saw three new timeshare development companies launched. And even the Baltic states of Estonia, Latvia and Lithuania are embracing the concept.

“Timeshares are now spreading to anywhere where people want to go as tourists or want to retire to,” says Peter van der Mark, secretary general of the OTE. “They are following the development of tourism to totally new regions.”

A prime reason is that the concept of exchange is now built into the whole shared-ownership idea. This is the timeshare equivalent of house swapping, where people trade their annual week in, for example, Torremolinos, for a fellow timeshare owner’s week in, say, Latvia. This trend is fuelling demand for property new territories, as people express interest in visiting more unusual destinations in up-and-coming countries beyond where they own.

Preben Vestdam, president and chief executive of RCI, comments: “The concept of shared ownership is spreading fast, both in terms of product structures and geographies, and exchanges are integrated into that. Few people, although they might love a resort, see themselves going there every year for their holidays over the next 30 years, so exchanges open up many more opportunities.”

Van der Mark adds: “Timeshare has moved on from the very fixed week-based product to a points system where people buy points, based on the level of accommodation and its location, and barter them with other timeshare owners all around the world.”

Another key factor driving the growth of timeshare schemes in emerging markets is the type of developers getting involved. Initially, the industry consisted of individual, small-scale operators. But now large, multinational, professionally run hospitality companies are adding timeshare to their business model and exploiting opportunities in such regions. These include Marriott Hotels, De Vere, Hyatt, Ramada, Four Seasons, Sheraton, Hilton International and the new exclusive private residence club, Leading Residences of the World, a shared ownership spin-off from the upmarket hotel group.

Holiday Club Finland is a leading Finnish spa hotel chain that is expanding into Estonia. It is planning a luxury spa hotel in the capital Tallinn to be run on a timeshare model and expects to push into St Petersburg next, since the city is a popular destination for its Scandinavian client base. Daskalantonakis Group, the largest hotel company in Greece, has recently launched the shared ownership vacation club Club Galaxia in Bulgaria and is in the process of acquiring resorts in Romania and Croatia, aimed at Greek nationals but also other inbound guests. Sol Melia, one of Spain’s largest hotel operators, has launched a timeshare property concept in Spain, which it plans to roll out across the whole of central and eastern Europe.

The drive into emerging markets is an easy business decision, says Marko Hiltunen, marketing director of Holiday Club Finland. “Estonia is only a 90-minute boat ride from Helsinki so it is one of the most popular holiday destinations for Finnish people, [but] there are no timeshare resorts [there] yet. We will be the first.”

The pool of buyers is expected to be 60 per cent Finnish, 20 per cent Swedish and the remaining 20 per cent other nationalities, including Russian and German.

Yannis Daskalantonakis, executive director of Daskalantonakis Group, says of his company’s expansion into Bulgaria, Romania and Croatia: “Greek real estate developers and hoteliers feel the Balkans and the eastern Med is the nearest area for them to grow. The proximity, the familiar culture, the already existing Greek business community and mainly the fact that those countries are to be part of the European Union soon, together with the fact that they are the new destination markets, make them a very lucrative market for us to expand into.” He also points to increasing political stability and a rising class of middle-income buyers.

The diverse mix of timeshare products has also helped their growth in emerging markets. The concept no longer just means the basic formula of buying week 35 in a certain resort in Tenerife for 50 years. It now means anything from this model to acquiring longer shares, usually in more luxurious properties, of up to three months (known as fractional ownership); buy-to-let or condo-hotel schemes (where you buy a hotel room outright then lease it back to the hotel owner who then lets it out when you are not staying there and gives you a rental income); and ultra-exclusive private residence or destination clubs where owners choose their holiday bases out of a portfolio of high-end accommodation in glitzy resorts.

But perhaps the main reason these new holiday areas are attracting developers and pushing up demand among buyers is because they are cheaper than the traditional timeshare territories of Spain and the US. Prices for a week per year in an apartment in Hungary or Croatia can be as little as £4,000, compared with the start-up price of around £7,000 for a one-week share on the Costa del Sol.

RCI’s Vestdam comments: “These new territories are attractive to developers because they have tremendous holiday destinations in terms of beauty, but they also have low labour and construction costs. They can deliver the same high quality as elsewhere, but at a lower cost to the consumer. It is a way of competing with the rest of Europe.”

Of course, that also means whole houses can be bought for as little as £40,000, making low-cost timeshares unnecessary for many buyers. But agents say that even wealthier clients will consider the new breed of shared ownership programmes because managed developments with companies established in traditional markets are a way to mitigate against the risk of buying in a new, untested market.

“In times of financial uncertainty, any form of shared ownership is right for securing quality holidays at affordable prices without really going into the expense of holiday homes or expensive packages. And emerging markets offer some of the best opportunities,” Daskalantonakis argues.

However, while the timeshare phenomenon is undoubtedly spreading, the caveat still applies that buying a share in a property anywhere in the world, rather than buying a property outright, should not be seen as an investment. “Timeshare is only an investment at the condo-hotel end where you become the owner outright of the property or apartment,” says van der Mark. “Traditional timeshare is where you are the owner of a ‘right to occupy’ for, say, just a week and you own with all the other people who bought the resort.”

Timeshare is not about making a gain as a result of a sale,” he adds. “You are buying a luxury product that will depreciate, rather like a car. It has never been an investment with a financial return. The return is in future holidays.”

By Belinda Archer

http://news.ft.com/cms/s/fdadfd12-529d-11da-8d05-0000779e2340.html

Residents express concern over development




The Pittsfield YMCA is selling its summer camp location and has entered into a preliminary option with a developer who plans to build 375 timeshare units on the 115-acre property. The 18 residents of East Acres Road, which abuts the camp, known as Ponterril, said the proposed complex is just too big.

East Acres Association Spokesman Grier Horner said, "On this property, which is in a single-family residential zone, we're trying to hold it down to 250 units, widen the buffers, create more open space, things of that nature."

Horner said that he and his neighbors realize that some sort of development is inevitable, but they hope the city keeps things in check.

"I think that there are enough councilors and members of the community development board that are now talking about modifying this, that I think when it's passed it'll be passed with some changes," said Horner.

Meanwhile, the City of Pittsfield is working to amend its zoning laws to better deal with situations like this and held a well attended public hearing Tuesday night to address residents' concerns.

Community Development Director Deanna Ruffer said, "You identify the concerns and then you develop a compromise and a balance point that allows development to go forward without destroying the character that makes our community and neighborhoods so special."

Ruffer said the city plans to continue a public dialogue as things move forward. The next opportunity for comment comes during the December 6 City Council meeting.

Dubai to grow in Real Estate timeshare

Platinum Resorts International, the Timeshare Consultants based in Beirut, Lebanon, have confirmed that Dubai will be centre stage for the mega boom in real estate based timeshare and fractional ownership over the next ten years in the UAE. This will be discussed at the Organization for Timeshare in Europe (OTE), to identify where joint venture and collaboration partners for such ventures might best be involved.



OTE meets in Prague, Czech Republic, on November 4-5 during its annual event, attracting over 500 Company delegates throughout the world who contribute responsibly to the growth of the industry.


RCI and Interval International, two of the major companies providing services to timeshare members worldwide, are now both active in the Dubai arena, testimonies to the importance of its potential market yield. Well known timeshare hospitality brands such as Marriott and Hilton have been tipped as long term active residents in the Dubai timeshare community. As a result of these brands anchoring the market, it will result in attracting every other major operator in the region and internationally.

'We felt this was an opportunity to match up some our legacy clients with potential long term partners that could make our Dubai winning equation work for their company growth plans, and therefore our delegation has come to Prague,' said Bassam Nakad, Vice President of the Group.

The company earlier this year introduced Resort Franchise Associates which lends a turn key start up to sell out formula for Developers wishing to maximize their investments through a unique custom tailored franchise system.

'Timeshare was responsible for over 7 Billion dollars in sales revenue worldwide last year, he said, and we envision Dubai becoming one of the top ten timeshare destinations markets in the world in a very short time.'

In Prague, Platinum and Resort Franchise Associates, together with timesharestaff.com will present an award to members of Time4sharing.org who have raised the image of the timeshare industry in the Middle East and Europe through its various projects. Timeshare will have a new darling in the Middle East and that will be Dubai.

'Dubai will be the best regulated, most demanded destination in the Middle East, and efforts to portray the real value of Dubai, and the real value of Timeshare, such as time4sharing.org, go hand in hand and are to be commended', added Nakad.

Strip goes Cosmopolitan with Hyatt



When the folks at Global Hyatt Corp. heard about the Cosmopolitan Resort Casino project on the Strip, they came knocking.

Hyatt is one of many upscale hotel brands that has been nosing about for a piece of one of the hottest three-mile stretches of real estate in the country. About a year and a half ago, Hyatt approached the Cosmopolitan to discuss managing the project's 3,000 rooms.

Hyatt, which beat out other hotel companies for the project, will bring to the table a network of 213 hotels in 43 countries and a customer database of several million names worldwide, from frequent business travelers to resort tourists.

"This has got to be the best location in Vegas," Thomas Pritzker, Global Hyatt's chairman and chief executive, said after a groundbreaking event for the resort last week.

The experience of Cosmopolitan developers Ian Bruce Eichner, developer of high-rise condos in New York and Miami, and former Venetian executive David Friedman didn't hurt, either.

"Bruce and David have their heart and soul in this thing," Pritzker said. "We have confidence in their experience, that this would actually get done."

"The concept was right, the people were right and the location was right," he added. "None of us could do any of this alone."

Hyatt's Grand Hyatt luxury brand will manage the Cosmopolitan's 1,000 hotel rooms and lease out units for owners of its roughly 2,000 condo-hotel units. Condo-hotels allow owners to rent their units when not in use.

By Eichner's count, at least half a dozen upscale hotel brands have been jockeying for a spot on the Strip. Yet while travelers like to stay at Ritz Carltons and Marriotts and Hyatts in other cities, Las Vegas is different.

"People don't want to come to Las Vegas and stay at a regular flagged property like a Marriott," Eichner said. "You can do that elsewhere. You're coming to Vegas for some kind of experience."

Lucky for Hyatt, the company was able to meet one of the most important requirements of the project -- that its name not be on the marquee.

That's just one of several unusual aspects of the Cosmopolitan resort. From Day One, the project has stood out among its casino peers on the Strip.

The $1.8 billion project, due to open in mid-2008, is privately owned and financed without help from the financial markets that made Las Vegas megaresorts possible. Its biggest names aren't the developers' but the financing muscle and design architect -- New York hedge fund giant Soros Fund Management and Miami-based Arquitectonica, respectively.

The resort's design is urban Manhattan rather than resort Disneyland: twin glass towers 600 feet high, a glass-fronted entrance and rooftop pool areas and gardens atop a four-level, rectangular building containing the casino, retail, restaurants, entertainment venues and meeting space.

More than 5 million square feet will be built on 8.5 acres surrounding the Jockey Club, an existing timeshare building. That scenario is pure Manhattan -- a place where creative developers have been known to build on tiny sites and around buildings with holdout owners. The 600-foot towers would instantly become among the tallest buildings on the Strip, only a hair shorter than the highest hotel tower, Wynn Las Vegas, at 614 feet.

The resort will front the Strip, with the 700 condo-hotel units in the Beach Club Tower facing Las Vegas Boulevard. The second, bigger tower will front Harmon Avenue, containing the 1,000 hotel rooms and approximately 1,300 condo-hotel units.

In an effusive style particular to name-brand designers, Arquitectonica founding principal Bernardo Fort-Brescia praised the project as unique in Las Vegas.

"It defines the new Las Vegas of this century," Fort-Brescia said. "The building rises with a distinct compositional clarity, in sharp contrast to the cluttered landscape of extraneous themes that dictate the architecture of neighboring casinos. The building is urban as it is the first casino that engages the Strip, creating a boulevard that emerges with an energy and a sophistication tantamount to the boulevards of Paris or New York."

Eichner welcomes the designer's ramblings as a sign of his commitment to the resort.

"You can hire Arquitectonica and not get Bernardo," said Eichner, who believes the building will end up competing for national design awards.

Besides its glass facade and floor-to-ceiling hotel room windows, the Cosmopolitan has other urban features that will no doubt excite New York designer types who like to skewer Las Vegas architecture.

Rather than using precious space for landscaping, the roof deck of the main building will become the 5-acre Cosmo Beach Club featuring dining, a nightclub and "aquatic designs." The deck also will have an "adult playground" ("... or, as my 18-year-old says, 'whatever,' Eichner joked during the groundbreaking event. He declined to elaborate further on what the adult area might entail.)

Some of the rooms, which include 600 square-foot studios and 1,300 square-foot one-bedroom units, have showers and tubs that are separated from bedrooms by glass, making the rooms appear bigger.

The resort broke ground Tuesday, the first of what will become one of the largest excavation projects in Las Vegas history. Perini Building Co. will dig a 90-foot hole that will contain a subterranean parking garage with 3,800 spaces. The main building will sit atop the parking garage.

"If it works, it could really revolutionize Las Vegas," Pritzker said of the resort's design.

Then there's the sales activity. Eichner claims the 1,300 condo-hotel units in the first tower sold out in 120 days -- a Las Vegas record and likely a world record.

These buyers signed contracts and put down 10 percent of the purchase price as a nonrefundable deposit, with the commitment of another 10 percent in nine months. With units going from $500,000 to $1.5 million, Eichner's company has more than $100 million on deposit with Nevada Title Co. About one-third of these folks are California residents.

"In my 30 years of doing this I have never seen anything like it, ever," Eichner said. "This is real, at-risk money."

For all of the Cosmopolitan's grandiose statements, the resort still has a low profile.

It has not received the national press of MGM Mirage's $5 billion, ultramodern CityCenter hotel and condominium complex down the street or of Donald Trump's eponymous condo tower up the road.

Competitors have been mum on the project, both in public and in private. (Eichner said casino companies haven't approached him to discuss the Cosmopolitan.)

And that's OK, the developers say.

"Everyone's been reading about new mixed-use projects on the Strip," Friedman said. "This will not just be the first one, it will be the best one."