Vacation ownership has unlimited potential in the Middle East hospitality market, and could well become the world’s largest timeshare market, says David Clifton, managing director, EMEA and Asia, Interval International.
Clifton was talking at the Arabian Hotel Investment Conference (AHIC) where he was moderating in a panel discussion on Vacation Ownership, looking at w hy timeshare, fractional ownership and private residence clubs are gaining traction with developers, hotel companies, and the consumer in the Middle East.
“Vacation ownership has unlimited potential in the market. The current estimated penetration rate for timeshare in the Middle East is only around 1%.
“The last decade has seen Dubai become a global icon across the entire spectrum of its unrivalled economic growth. Many of the world’s biggest, highest, and most unique real estate projects are underway with some already delivered, such as the Royal Club at Palm Jumeirah. Vacation Ownership has been the fastest growing sector of the worldwide travel and tourism industry for a decade, and recent Dubai tourism growth has been spectacular. Naturally, vacation ownership is following,” said Al Mohannad Sharafuddin, chairman, Arabian Falcon Holidays .
At present, Florida in the US represents the most lucrative vacation ownership market worldwide, with 218 resorts registered with exchange company Interval International alone. However, Sharafuddin is confident that Dubai’s vacation ownership potential can top that of America’s Sunshine State.
“Given Dubai’s status as the Middle East’s east/west hub with links to Europe, the Far East, North Africa and India, the marketplace available to Dubai is greater than that of the North American market with a higher number of ‘income affordable households’.
“Dubai will not only surpass Florida as a holiday destination with its nice beaches, weather, friendly and safe environment and, of course with the lots of attractions and entertainment such as Dubailand; it is also becoming a regional financial centre attracting holiday makers and business people alike,” David Clifton remarked.
Sharafuddin’s Arabian Falcon Holidays is currently marketing Royal Club at Palm Jumeirah, a 50-unit resort offering one- and two-bedroom units, situated on the trunk of the Palm Jumeirah. Each apartment is divided into 51 weeks of holiday occupancy time and one week is left free for annual maintenance. The ‘right to use project’ offers leaseholds of 99 years.
The Torch project from Dubai Select at the Dubai Marina is currently under construction, and is being sold on a fractional basis in the UK. The Torch will open in 2009, and will offer 24 units, comprising of 10 one-bedroom and eight two-bedroom apartments sold on a two-weekly basis.
IFA Hotels & Resorts is set to develop a vacation ownership product on The Palm, Jumeirah. Set to be managed by hotel operator Fairmont Hotels & Resorts, the resort will offer beaches, water sports, a children’s centre, restaurant, spa, health centre, and large gardens, and will be located adjacent to the Fairmont Palm Hotel & Resort.
Meanwhile, developers are also eying up timeshare possibilities at Dubai Festival City, located on the shores of Dubai Creek. A 300-apartment timeshare resort is planned.
“All of the major global hospitality brands currently engaged in vacation ownership development around the world have expressed very high levels of interest in Dubai resorts and one of the largest hotel/vacation ownership companies is near to completing agreements for a 340-unit resort in Dubai,” said Sharafuddin.
Interval International and Arabian Falcon Holidays, along with a number of other vacation ownership representatives, are currently working with the Dubai department of economic development (DED) to try and create a timeshare legislation that will both protect the consumer and facilitate good business opportunities.
“The Government is to stop bad timeshare sales practices by presenting good balanced legislation, giving both the companies and consumer the protection,” said Clifton.
Talking of sales and marketing practices, Sharafuddin explained that a Middle East market comprises of tourists or business travellers visiting Dubai from the GCC and from other countries around the world.
“Some developers have elected to focus their marketing activities primarily on GCC residents and they have incorporated three- and four-bedroom units with maid’s room into their design,” he explained.
“However, rather than adapt the product what is needed are specific marketing exercises in order to educate people in the region on the great benefits of owning vacation ownership with the ability to use their product to open a world of holidays far beyond their own region.
Through holiday exchange companies, such as Interval International and Resort Condominiums International (RCI), vacation ownership members can access a pool of 5,425 resorts located in 95 countries and ‘exchange’ their time in the Middle East for another holiday experience elsewhere.
“At Arabian Falcon we know that a mixed use tourism development incorporating hotel, vacation ownership and serviced apartments is the best economic model. And vacation ownership is an established mainstream hospitality product for both consumers and developers,” Sharafuddin concluded.