workV-CovJan09-rb-jp2:Layout 1 14/1/09 13:06 Page 3

Richard McIntosh: “I can see Rita Rowe: “Positive word Mark Bingham: “We
many opportunities to position of mouth from events is rarely get people who
our business for better times worth untold millions.” buy for lifestyle.”
ahead.” PAGE 7 PAGE 35 PAGE 22

Enterprising ideas for the vacation industry January 2009

FEEL-GOOD FACTOR
HOT IN THE CITY
WHY YOU SHOULD CAPITALISE
ENGAGE MEMBERS AND WIN
FAVOUR THROUGH EVENTS
ON THE GROWING TREND IN
URBAN FRACTIONAL
DEVELOPMENTS NEW BUILD
LEADING BRITISH
ARCHITECTS SET
THEIR SIGHTS ON
MONEY TALK TIMESHARE
RECESSION IS NOT
WITHOUT ITS
OPPORTUNITIES

A DEDICATION TO THE FAMILY

HOLIDAY EXPERIENCE HAS
BROUGHT MAHINDRA
HOLIDAYS AND RESORTS
EXTRAORDINARY SUCCESS.
THE COMPANY CONTINUES TO
BROADEN ITS PRODUCT BASE
AND APPEAL WITH…

A CLEAR
GROWTH MODEL CONDOS
ALL TO PLAY FOR IN
HOTELINVEST SECTOR

FOCUS
CONFIDENCE IN INDIAN ECONOMY
DRIVES EXPANSION PLANS
SERBIA RESURFACES
THE INTRIGUING BALKAN
STATE IS STARTING TO
ATTRACT RESORT DEVELOPERS
workV-ContsJan09-sa-rb-JP.qxp:Layout 1 12/1/09 17:07 Page 3

VENTURES MAGAZINE SERVING RCI’S MARKETS IN

JANUARY 2009 EUROPE, INDIA AND THE MIDDLE EAST

CONTENTS EDITORIAL

As we enter the New Year, we do so in the

Cover story: Mahindra
executives Ramesh
Ramanathan (left)
and Arun K Nanda
4 MARKET OUTLOOK:
A news and views round-up from Europe, India and the Middle East
10 COVER STORY – FAMILY FOCUS:
Mahindra Holidays and Resorts attributes the secrets of its
success to a diversification of product designed to attract the
family and younger customer
16 MARKET REPORT – SERBIA:
Enjoying a rise in in-bound tourism and looking forward to EU
membership, Serbia is set to make its mark in the East European
leisure property market
22 IN IT FOR THE LONG TERM:
Despite the global economic gloom, three major players in the
hospitality industry are confident that the condo-hotel model will
pay long-term dividends
26 NEW COMPANY, NEW DEAL:
British architects enter the residential resort business with big
plans for a development on the island of Cyprus
30 UPSCALE DOWNTOWN:
Several developers of urban fractional properties discuss the
factors they consider to be vital to success in the city
35 HOST WITH THE MOST:
A look at the value of hosting member events in building loyalty
and boosting business
38 FINAL CALL – MONEY, MONEY, MONEY:
Though times are tough, RON HOWELL of HMC Funding believes
there can still be winners in times of recession
VENTURES is published by Group RCI, Kettering Parkway, Kettering, Northants, NN15 6EY, United
Kingdom. Tel: +44 (0)1536 310101. Fax: +44 (0)1536 314682. Email: ventures@europe.rci.com
EDITOR: Helen Foster. DESIGN: Richard Blaney. PRODUCTION CO-ORDINATOR: Claire Williams.
ADVERTISING SALES: Media Line Ltd. Tel: +44 (0)870 250 8701. Repro: JP Repro. PRINTING: CKN
Print Ltd. Image for Market report from Getty. Original articles and contributions may be
reproduced or transmitted only with written permission from the publisher. No responsibility is
accepted by RCI Europe for any losses or other consequences resulting from advertisements or
other material appearing in this publication. RCI Europe reserves the right to accept or refuse
advertisements at its discretion without assigning any reason for doing so. © RCI Europe 2009.
certain knowledge that tough and
challenging times lie ahead for all our
businesses.
Many of us have already restructured our
organisations to make them more efficient in
response to the changing economic
environment and markets we find ourselves
in. However, it’s during such times that we value the strength that lies
in teamwork. Despite the progressively difficult market conditions of
last year, Group RCI, in collaboration with its affiliates and business
associates, still managed to achieve great things. And we will work to
do the same in 2009.
On page 9 I have highlighted some of these achievements and I
would like to thank everyone who has worked with the Group RCI team
to make them possible.
In the pages of this issue of Ventures there is evidence of the
optimism, confidence and resilience that will serve to strengthen our
industry.
Club Mahindra Holidays and Resorts enjoyed extraordinary success
in 2008 and has its sights set on further growth throughout the coming
year. In the cover story on page 10, Club Mahindra’s executives share
their growth strategy, largely based on the company’s design of a
holiday experience that’s attractive to families and to the younger
generation.
Many new developers entered the market in 2008, some in newly
emerging destinations such as Serbia, featured as the market report on
page 16 and in which we also welcome two new Group RCI Serbian
affiliates – Club Satelit and Kraljevi Konaci, both located in the
spectacular Zlatibor mountain region. A new British residential resort
development company, Blue C Developments, features on page 26 with
its new development on the island of Cyprus which is signed to Group
RCI’s Rental and Exchange programme.
Many of Group RCI’s established affiliate developers are also proving
to be both innovative and resourceful in diversifying into new market
sectors, such as Pestana Hotels & Resorts, which made its London
debut with the opening of a condo-hotel, the Pestana Chelsea Bridge
Hotel, highlighted on page 22. While other developers are reaping the
rewards of investing in engaging their owners through member events,
the benefits of which are clearly illustrated in the feature on page 35.
2009 is also RCI’s 35th anniversary. I would like to take this
opportunity to once again thank all those who have worked with RCI
during that time, many of you from the early days. Though a relative
newcomer to Group RCI, I’ve been greatly impressed by the depth of
trust and loyalty at the heart of this company’s business relationships.
As we go into 2009, I know our business relationships will continue to
flourish and hope many more will join us so that we can all look
forward to another 35 years and more of enhancing the world of holiday
experiences for all our members.
With every good wish for the coming year.
Sincerely
Jonathan Back
Managing director, Group RCI EMEAI

|
RCI Ventures, January 2009 3
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Marketoutlook
A R O U ND - U P OF I ND U S T R Y N E W S , V I EW S , A ND P E O P L E T O W ATC H

Far left: Jim

Lewis. Left:
Saratoga Springs
Resort & Spa is
the seventh and
largest of the
growing collection
of DVC properties.
Located across
the lake from
Downtown Disney,
its 924 units
range from
studios and
treehouse villas
to spacious
three-bedroom
grand villas.

DISNEY VACATION CLUB MEMBERS TO RECEIVE

BENEFIT OF NEW MULTI-YEAR RELATIONSHIP WITH RCI
INDUSTRY: RCI has become the exclusive
third-party exchange provider for Disney
Vacation Club (DVC), enrolling DVC’s more than
135,000 member families into RCI’s global
exchange network.
Disney Vacation Club Members will be able
to enjoy holidays at an unrivalled choice of
resorts in RCI’s exchange portfolio which
spans six continents. They will also be able to
access all-inclusive options, more nightly
exchanges and a selection of high-end
fractional properties. Similarly, RCI members
will have the opportunity to exchange into, or
rent at, the eight Disney Vacation Club resorts.
Disney Vacation Club President, Jim
Lewis, said: “Group RCI has the management
depth, technology resources and global
marketing infrastructure to align with Disney
Vacation Club’s strategic growth plan. This
relationship will provide our member families
with the most diverse experiences possible
beyond our signature Disney Vacation Club
resorts.”
Geoff Ballotti, president and CEO of
Group RCI, commented: “It’s an honour for
all of us at Group RCI to have been selected
by one of the most internationally recognised
and revered brands on the planet.
“For more than 50 years Disney has been
offering unique family vacation experiences
with legendary service, superb
accommodations and magical touches at every
turn. We look forward to working closely with
DVC to continue to build new and innovative
programmes to provide even more member
benefits and opportunities.”

UPBEAT ABTA OUTLOOK

TRENDS: Despite the economic
gloom pervading the media, the
Association of British Travel
Agents (ABTA) has adopted an
optimistic outlook for 2009.
In its 2009 Travel Trends Report
it states that the British public
views holidays as more of a
necessity than a luxury and it
believes their enthusiasm for
travel will not be greatly
dampened by the recession.
ABTA predicts further growth
in mid- and long-haul
destinations such as Turkey,
Egypt and the Spanish
Caribbean, which are seen as
good value. According to Ascent-
MI research last year, Egypt saw
an increase in British visitors of
38 per cent, with a 32 per cent
increase for Turkey and 23 per
cent for Mexico.
The report highlights value
for money and ‘added value’ as
key themes for this year, with a
commitment to quality, service
and choice helping to sustain
business levels in the hospitality
and travel industries. High-end
operators are reported to have
told ABTA that their customers
want more for their money, such
as room upgrades and free child
places, rather than to trade
down.
The Euro exchange rate is a
cause of some anxiety among
British travellers, but ABTA
remains confident that Spain,
France, Italy and Greece are sporting facilities, cultural and
destinations that will still historical attractions, museums
provide reasons to visit. and spectacular countryside.
Much more than beach Importantly according to ABTA,
destinations, these countries Britons feel at home in these
provide a great variety of countries, reassured by good
experience the British infrastructure, facilities and a
holidaymaker is looking for with warm welcome.
VENTURES WEBSITE LAUNCH
The launch of a Ventures website is planned by the end of the
first quarter 2009. The website will supplement the printed
edition, providing breaking industry and Group RCI news, as
well as additional features between printed editions of the
magazine. It will be available via a link from rciaffiliates.com
and directly. If you want to be the first to know when it goes
live or want to contribute your news and views to Ventures,
please send your email address and contact details to the
editor, Helen Foster, on helen.foster@rci.com

|
4 RCI Ventures, January 2009
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GROUP RCI
MEETING
MEMBERS
INDUSTRY: A series of
member events are planned
by Group RCI to improve
members’ understanding of
the Exchange product.
The events will be run in
conjunction with resorts and
based around member
AGMs. Group RCI staff will
take members online to
show them how to check
deposits and exchanges,
and answer any questions
they may have.
About 20 events will be
held from July onwards,
after which Group RCI plans
to hold a larger exhibition-
style event for members
and non-members in 2010.
This event will include
cooking demonstrations and
fun activities from different
countries and it is hoped
that resorts and tourist
boards will take stands to
offer destination advice and
accommodation.
Group RCI director of
Weeks and Points Gerry
Skipper-Byer said: “We
want to use these events to
listen to our members and
improve the service we
offer, as well as showing
them how best to use RCI
Weeks and Points. We also
want to illustrate
membership value by
informing them about the
work we do in the European
courts to help counter
scams, by offering
compensation to members
who complain about a
holiday when they return,
and in educating members
about how we monitor
resort quality.”
12/1/09 15:50 Page 3
NEW VP
AND RESORT
FOR SMVC
PEOPLE: Denis Ebrill has
been appointed executive
vice president of Sol Meliá
Vacation Club (SMVC),
part of Spanish-based Sol
Meliá Hotels & Resorts.
Ebrill joins SMVC from
Starwood Vacation
Ownership where he was
senior vice president of
real estate acquisitions
and development, having served with the group in Mexico and Central America prior to that. Born in
Dublin, Ireland, Ebrill (pictured inset) brings 36 years’ experience of the hospitality and leisure real estate
industry to SMVC. He has held corporate and hotel general management posts with Starwood and
Sheraton in Alaska, Boston, Brazil, Denmark, Germany, Venezuela and Mexico.
SMVC opened a new five-star project, The Reserve at Paradisus Palma Real (pictured above) in Punta
Cana, Dominican Republic, last December. It features 190 one- and two-bed lock-off units and larger
Presidential Club Suites, sold as a multi-week product. Ebrill said: “I have found this is a strong and
popular destination. The varied and unique product offering in Punta Cana continues to address the
increased demand for a luxury lifestyle product in the area.”
THE REGISTRY COLLECTION GROWS IN SOUTH AFRICA
PRODUCT: South Africa’s Zorgvliet Private
Residence Club has affiliated four of its
exclusive properties to The Registry
Collection portfolio of more than 100 luxury
accommodations.
Each property offers a different lifestyle
experience. Zorgvliet Vineyard Lodge & Spa
is an historic farm dating back to 1692 in
the Banhoek Valley. The Ka’Ingo Private
Reserve & Spa in the Waterberg region,
and the Dinkweng Safari Camp in Limpopo,
are both game reserves, while a relaxing river experience is offered by the Riviera on Vaal Hotel &
Country Club, (pictured right) which enjoys a riverside location near Vereeniging.
Mac van der Merwe, CEO of the Zorgvliet Group, said: “More than a destination, we have created a
true multi-faceted experience. We chose to affiliate with The Registry Collection because we share a
passion for offering exceptional five-star products and cast-iron standards.”
DIARY DATE FOR FRACTIONAL SUMMIT
EVENT: Fractional Summit 2009 is back with an ownership – the rewards, the opportunities’.
extended two-day agenda. On the agenda for discussion is why this
This year the date is set for 23-24 April and sector continues to gain market share,
the venue is the Hilton Metropole in London. illustrated with case studies and expert opinion
More than 250 fractional property professionals on the many facets of one of the world’s
are expected to attend from around the world for fastest-growing leisure real estate business
the conference which will be titled ‘Fractional models. Visit www.fractionallife.com
|
RCI Ventures, January 2009 5
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Marketoutlook
A ROUND-UP OF INDUST RY NEWS FROM THE M I D D L E E A S T
Christel DeHaan, founder of the Christel House Charity Foundation,
spends time with children at a charity school in India.
The first tee at the Ealing Golf Club, the UK venue for the 2009
Group RCI Christel House Open charity golf tournament.
AN UNMISSABLE
DATE FOR GOLFERS
EVENT: The UK venue for the 2009 Group RCI Christel House Open
Charity Golf Day has been confirmed as Ealing Golf Club, Perivale, in
Middlesex. It will be held on Monday, 15 June 2009.
Christel House is an international charity dedicated to helping
impoverished and orphaned children to break the cycle of poverty and
become self-sufficient, contributing members of society. The charity’s
learning centres provide education, nutrition, health care and vocational
training for children all over the world.
The UK event is part of a truly international golf experience, with over
26 Christel House Charity Golf tournaments taking place on the same
day across five continents and 20 time zones. The event opens with the
first tee-off in Delhi, India, and will close as the last ball is holed in Oahu,
Hawaii.
Participants will enjoy a great day’s golf, with a presentation dinner
and prize ceremony, while simultaneously raising funds for the
timeshare industry’s leading charity. All monies raised on the day will be
given directly to the Christel House charity for the benefit of the children
in its care.
If you are interested in taking part in this unique event, please contact
Amanda White on amanda.white@rci.com for more information.
|
6 RCI Ventures, January 2009
TOP TIPS – ONLINE
With approximately 30,000
consumers searching for
timeshares online in the UK alone
every month, it’s worth making the
most of your online space.
In the first of a regular top
tips column, Shane Quigley,
pictured, managing director of
Epiphany Solutions, an internet consultancy company,
shares expert knowledge of how to ensure your online
strategy catches as much as traffic as possible – and
engages them to interact.
■ An active strategy of attraction, engagement, data
capture and segmented targeting is the best way to
secure results.
■ Site usability and sales process are paramount. To
attract visitors to your website, think like that often
fickle, irrational and elusive person – your customer.
Think about where they are, what they think, what
they’re doing and who they’re doing it with. Then think
how and where you can target, surprise, motivate and
inspire them.
■ Strategic use of pay per click advertising and search
engine optimisation can capture serious investor interest.
■ Engage visitors with relevant content by ensuring it is
connected to the reason that they are visiting your web
page.
■ Carefully designed customer journeys through your
website should lead visitors to strong calls to action.
Track the metrics to ensure that visits and site
performance are being optimised.
■ Build a relationship with visitors by capturing
preference data, and finding out how and when your
visitors want to be contacted. Using visitor data, send
emails to database segments and track and compare
the return on investment of each segment to identify
where to reinvest.
Epiphany Solutions and Ripe Design work as strategic
partners with more than 10 years’ experience in
generating international property interest via the web
for market leaders such as Savills and Knight Frank.
For more information visit www.epiphanysolutions.co.uk
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OTEnews
POSITIVELY EMPOWERED
Newly appointed OTE chairman RICHARD MCINTOSH
calls for a positive approach to business in 2009 and
presents several OTE initiatives to start the year off.
‘‘
I RATHER suspect that
like me, you’re all
hoping the year of the credit
crunch, the banking crisis, the
exchange rates volatility, and
the drop in consumer
confidence, which is so much
influenced by the property
prices and investment
performance of our consumers,
will soon be behind us.
We’ve all been impacted by
the economic shock to trading
conditions, but we must focus
on demonstrating the strength
of our overall business sector,
as we have done before in
difficult economic times. Be
positive and don’t dwell on the
overused term ‘recession’.
I regard myself as an
optimistic realist and therefore,
while accepting that 2009 is
going to be a challenging year,
I can see many opportunities to
position our business for better
times ahead.
I was honoured at our
Madrid forum last year to
accept the chairmanship of OTE
for the next two years and look
forward to working with all
industry associates towards
those better times.
To meet changing industry
needs, OTE will change its
name this year to the Resort
Development Organisation
(RDO) – a change led by its
membership to allow the
organisation to represent the
growth in other shared-
ownership products, whether
fractional, PRC’s, destination
clubs or others. The
organisation will also be
extending its remit and
responsibilities beyond Europe
to serve the industry in the
Middle East and North Africa.
We enter 2009 with a new
Timeshare Directive which,
having been passed by the
European Parliament, must
now be implemented as law by
the member states within 24
months. The OTE executive will
be watching its progress and
lobbying where necessary to
encourage individual states to
adopt the directive to avoid the
introduction of unnecessary
further restrictive measures on
our business. It remains a
priority for OTE to work
alongside law enforcement
bodies, such as the Office of
Fair Trading in the UK and
European consumer centres,
as it continues to present all
that is good about our business
and to defeat those companies
that continue to tarnish our
image.
A new OTE website,
www.gotimeshare.org, has
been designed to top the
search engine pages. This is a
further opportunity for all of us
to put our best practice in front
of the consumer, allowing us
to strengthen the reputation of
our individual businesses and
that of the industry overall.
The European timeshare
study is set to be published in
Q1 of 2009. OTE received more
than 30,000 responses from
timeshare owners which will
be a useful source of data for
us all.
While I’m sure we will all
need to dig deep into our
resolve in 2009, I would
encourage you to be robust in
your support of OTE and our
industry, as I do believe that
working together we are
stronger and a united industry
will result in benefits for our
individual businesses.
Meanwhile, on behalf of OTE,
’’
I’d like to wish you all a
successful New Year.
|
RCI Ventures, January 2009 7
workV-OTE-JP:Layout 1 15/1/09
OTEnews
EVERY TIMESHARE TELLS A STORY
To get to the heart of what is most
valued by owners about their
timeshares, OTE invited European
owners to enter a story writing
competition to say what their timeshare
means to them. Here are excerpts from
a couple of the best submissions.
“WE’VE been delighted with
the response from timeshare
owners,” said Sue McNicol,
head of operations, OTE UK.
“All three prize-winning
articles, along with a number
of extracts taken from other
submissions, have been
added to OTE’s new website
www.gotimeshare.org, an
informative, up-beat and
highly positive site about
timeshare. Positive
endorsements from
timeshare owners themselves
are a great form of PR for our
industry and we intend to
maximise their use.”
THE WINNER
My timeshare at Club
Olympus – Garden City
Tenerife
Written by Cathy Anthony of
Swansea who owns at Club
Olympus, Tenerife.
“Our timeshare will always
hold a special place in my
heart. It is the place where I
spent my first ever holiday
with my husband. It is the
place where he asked me to
marry him just two weeks
after our meeting – I blamed
the Sangria in the pool bar…
Or was it too much sun! It is
the place where we got
engaged three months later
|
8 RCI Ventures, January 2009
11:14 Page 4
and where we returned for
our honeymoon, taking all the
family with us.
“It is the place where I
learnt that I was going to be
a grandmother.
“It is the place our children
and grandchildren visit every
year. And I know it will be the
place all future generations of
our large family will grow to
love as well.
“Club Olympus may not be
five-star but for the warm
welcome we receive every
time we stay, I consider it
the best resort in the RCI
Directory.
“It is the place where
visitors are always known by
their first names, where the
team never seem to forget a
face – how they manage this I
will never know! You always
feel you are back among old
friends.”
A PRIZE WINNER
Club La Costa delivers
again!
Written by Diane Larner of
Haywards Heath a Club La
Costa points owner.
“Arriving with our bumper
family of three children and a
baby we couldn’t fail to be
impressed by one of Club La
Costa’s latest and most elite
Happy owner, Cathy Anthony, left, with her family on holiday at Club
Olympus – Garden City resort in Tenerife.
acquisitions. As the children
tumbled out of the car to
explore the woods we found
our lodge, contemporary,
clean, spacious and well
designed it embodied all
those outstanding
characteristics we have come
to expect from a Club la Costa
resort.
“This year we had chosen
Les Cottages Du Lac, tranquil
lakeside lodges situated in
Bordeaux, just 15 km away
from the fine sandy beaches
of the Atlantic. For those who
enjoy peace and privacy the
lodges are cleverly designed
with a sheltered decking
area, which is not overlooked.
“If you enjoy a more social
holiday the lodges are well
positioned to allow for this
too. Whilst we settled in, the
children quickly made friends
with some French children
staying nearby, the separate
car parking areas meant little
ones could cycle and play
safely.
“Days were spent basking
in the French sunshine and
watching the children digging
sand channels to the ocean.
Evenings were spent enjoying
dinner with our new found
French friends. In the
afternoons we swapped roles
and my husband got to blast
around the lake with equally
incautious sailing buddies. I
took the children off to the
pool where I could read whilst
they splashed around. A
toddler’s area for non-
swimmers was perfect for
our four year old. Next to the
pool was the kid’s club,
restaurant and reception area
where the odd bottle of wine
and complimentary canapés
had to be sampled.”
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GroupRCInside
I N F O R M AT I O N E X C LU S I V E LY F O R G R O U P R C I A F F I L I AT E S
MUCH TO CELEBRATE RCI is 35 years old this year and
JONATHAN BACK, managing director, Group RCI EMEAI, looks forward
to continuing to help shape an exciting and vibrant industry.
‘‘
We at RCI are celebrating
the company’s 35th
anniversary this year and believe
we have a lot to be proud of.
In just over three decades,
RCI has been taken from its
famed start-up as files in a shoe
box, driven in its early years in
the US by its founders, Jon and
Christel DeHaan, to become a
truly global organisation helping
to bring high-quality, great-value
holidays to more than 3.7 million
member families in the last year
alone.
That spirit of innovation and
very real passion for our product
is as strong throughout RCI today
as it was 35 years ago – and now
we share it with some of the
most exciting and committed
resort developers in the world.
From the largest-scale
operation to the most intimate,
we know our affiliates care about
their product and share our pride
in delivering the best possible
holiday experience to our mutual
members to enhance not just
their own businesses, but the
standing of the shared-vacation
ownership industry as a whole.
Today we have 3,000
experienced RCI Guides serving
customers in more than 30
languages who work to ensure
that owner members – our best
ambassadors – are sure to get
the most out of their ownership
and membership.
The excitement of continually
improving the member experience
and, in achieving that goal, helping
to boost the revenues of our
affiliates just as much as our own,
12/1/09 16:37 Page 3
has not left us. From leading the
way with RCI Points, a flexible new
way to holiday that has become
the fastest-growing holiday points
club in the world since its launch
eight years ago, to creating The
Registry Collection luxury
exchange brand which has
attracted 34,500 members in the
five years since its launch, RCI is
always looking for new ways to
work with its affiliates to grow our
mutual businesses and the wider
industry.
Last year we launched the
RCI Rental & Exchange
programme and the Owner
Exchange Club – both hybrid
timeshare/rental products
designed to bring greater variety
of destination and properties to
our members while introducing
potential new purchasers to the
timeshare industry.
We have committed significant
resources and funding to not only
maintaining the world’s most
expansive holiday exchange
network, but to further improving
it. Based on our
projections, we will
invest $7.6m in
2008 in product/user
experience improvements
and $20.3m in 2009. The launch
of Enhanced Search will provide
an online facility to make
searching and confirming
exchanges more fun for
members, as well as more
transparent and user-friendly. It
will soon be rolled out across
Europe in multiple languages.
I’m happy to say that we
closed 2008 by welcoming nearly
20 new resorts throughout the
EME region to our network,
opening up some exciting new
destinations such as Serbia with
two new affiliate properties and a
yacht club in Turkey. We closed
the year on a high by announcing
Disney Vacation Club (DVC)
signing a multi-year agreement
with RCI, bringing more than
135,000 member families and
eight magical DVC resorts into
our global exchange network.
As we embark on a new year, I
want to say a big thank you to all
our associates for your support.
We all know the year ahead will be
a difficult one but we share a belief
in our product, a passion for this
business and a commitment to
one another which will, I am sure,
win the day for us.
I would like to wish you all
every success in 2009 and to say
that I, like everyone here at RCI,
look forward to working with you
to create greater opportunities for
’’
your business by boosting
benefits for our members.
35 YEARS
OF GREAT
VACATIONS
2009 – RCI has more than
4,000 affiliated resorts in
more than 100 countries and
more than 3 million member
families living in 200
countries, making it the
world’s largest holiday
exchange network
2008 – RCI Points reaches
1 million members
2000 – RCI Points, the
world’s first global points-
based holiday exchange
system, is launched
1995 – RCI membership
reaches 2 million
1991 – Resort Recognition
Programme introduces the
RCI Gold Crown Resort and
the RCI Silver Crown Resort
award categories creating
standards of resort
excellence
1989 – 1 million families
belong to RCI
1985 – 1,000th resort
affiliates with RCI
1974 – Jon and Christel
DeHaan establish the holiday
exchange industry – and RCI
– with an initial member base
of 453 member families and
pay neighbourhood children
$1 an hour to assemble
directories and membership
kits on the dining room table
of their Indianapolis home.
|
RCI Ventures, January 2009 9
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COVER STORY
QUOTE: EVEN THOUGH OUR SALES CONVERSIONS ARE TAKING LONGER, WE ARE
MAINTAINING 30 PER CENT GROWTH OVER LAST YEAR, WHICH IS A MEASURE OF OUR
BRAND STRENGTH AND THE RESILIENCE OF OUR TEAM. RAMESH RAMANATHAN
Mahindra Holidays
and Resorts is
enjoying phenomenal
success in India.
STEVE ADAMS looks
at the customer-focus
and philosophies
which form the
backbone of the
company.
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10 RCI Ventures, January 2009
9/1/09 12:54 Page 2
FAMILY
FOCUS
AS BUSINESSES throughout the world
look to cut costs and shed workers in light
of the global economic downturn, one
company is doing the exact opposite.
Mahindra Holidays & Resorts India Limited
(MHRIL) recently unveiled ambitious
plans to invest Rs 400 crore (US $100
million) to double its inventory from 800
to 1,500 apartments, adding six new
resorts in the process.
A risky move given the current
economic climate? Not according to
managing director Ramesh Ramanathan,
who believes the Indian economy is in
better shape than most.
He said: “We’re still planning for the
future because we think the underlying
economic situation is still good. In India
we expect economic growth of around
eight per cent – which is much better than
most countries.”
Arun K Nanda, chairman of MHRIL,
said timeshare was well positioned to
succeed, despite the economic downturn,
especially as the company offered in-house
financing options – usually involving a 60-
month instalment plan – to its customers.
He explained: “Two of the benefits of
this product are that it is perceived as
inflation-proof and value for money. But
just as importantly we run our own
financing, so customers don’t have to go
looking for a loan from the banks.”
Ramanathan added: “Even though our
sales conversions are taking longer, we are
maintaining 30 per cent growth over last
year, which is a measure of our brand
strength and the resilience of our team.”
OPTIMISTIC OUTLOOK
That degree of optimism is part of the
philosophy at MHRIL, where the
feel-good factor of a company on the up
is palpable. A growing subsidiary of the
Mahindra Group – one of India’s largest
and best-known corporations with a
gross turnover of US $6.7 billion (see
panel, opposite) – the forward-thinking
company has developed an enviable
reputation with consumers as well as
overwhelming brand recognition and
loyalty. It was named Business
Superbrand of the Year 2008 by the
Superbrands Council, an accolade that
Ramanathan believes reinforces the
company’s confidence for future
expansion.
He said: “This achievement
empowers us to focus on our growth
strategies, backed by lots of confidence,
to create new brands while
strengthening our flagship brand.”
MHRIL’s flagship brand is Club
Mahindra, India’s leading vacation
ownership business, with some 85,000
members, 30 resorts – once the latest six
are fully operational – and a domestic
market share in excess of 60 per cent.
According to research conducted by AC
Nielsen, not only is Club Mahindra the
number one holiday brand in India, but
Indian nationals are more familiar with –
and understand – the brand better than
they do the concept of timeshare itself.
It’s an enviable position to be in, but
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29/12/08 08:46 Page 3
A FOCUS ON…
THE MAHINDRA GROUP
The Mahindra Group – also
known as Mahindra & Mahindra
– is one of the top 10 industrial
houses in India, with a global
turnover of $6.7 billion.
A multinational business
conglomerate with interests in
industry sectors ranging from
automotive and farm equipment
to trade and financial services,
infrastructure and information
technology, it is one of the top
three tractor manufacturers in
the world, and India’s market
leader for multi-utility vehicles.
The company was founded in
1945 when entrepreneurial
brothers JC and KC Mahindra
opened a franchise for
assembling jeeps from the US,
after deciding the vehicle would
be ideal for India’s rugged
terrain and rural roads.
The company has never
looked back, with expansion
into a wide variety of industry
sectors – at one time it was
India’s leading importer of steel
– it now plays a prominent role
in almost all sectors of the
Indian economy.
The Group employs more
than 50,000 people worldwide
and has several state-of-the-art
facilities in India and around the
globe. It is ranked in Forbes’ list
of the world’s top 200 most
reputable companies, and the
top 10 in India.
ARUN NANDA
MHRIL chairman Arun K
Nanda is also the Mahindra
Group’s executive director and
president, infrastructure
development sector.
He has been with the
Mahindra Group for 35 years,
having joined as a
management accountant at
Machinery Manufacturers
Corporation Limited in 1973.
He was appointed to the
Mahindra Group’s board of
directors in 1992, and made
president of the infrastructure
development sector in 1994,
covering areas including
property development,
construction, leisure and
lifetime holidays and
engineering consultancy.
A graduate in commerce,
Nanda is a fellow member of
the Institute of Chartered
Accountants of India as well as
the Institute of Company
Secretaries of India, and has a
degree in Law from the
University of Calcutta.
RAMESH RAMANATHAN
Ramesh Ramanathan is
managing director of MHRIL
and a founder of Club Mahindra
Holidays, for which he is also
chief executive officer.
A pioneer in the Indian
holiday industry, he joined
MHRIL from Sterling Resorts
and has since gone on to
establish Club Mahindra as
the country’s leading holiday
brand and operator in the
vacation-ownership market.
An economics graduate
with a management degree
from the Indian Institute of
Management, Ramanathan
has over 30 years’ work
experience in a range of
industries from consumer
durables and tyres to the
internet, retail and hospitality.
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COVER STORY
QUOTE: USUALLY AN OWNER OR DEVELOPER GETS ATTACHED TO AN IDEA AND WANTS TO
SELL HIS IDEA TO THE CUSTOMER, BUT WE TRIED TO UNDERSTAND WHAT THE CUSTOMER
WANTED ON A HOLIDAY AND CREATED A PRODUCT SUITED TO THOSE NEEDS. ARUN NANDA
one that was only arrived at through
hard work according to Ramanathan,
who is so committed to his role that
he regularly takes more pictures of
hotel rooms and facilities than
beaches or sunsets when he goes on
holiday.
“My wife gets quite mad about it,”
he laughs. “But I think all hoteliers
and hospitality people do it – when
you go somewhere and see something
good you have to click it!”
The experience and track record
of other timeshare operators was one
thing that definitely clicked with
Ramanathan when he first helped
establish Club Mahindra in 1996.
At that time the industry was
floundering in India – largely due to
the negative publicity generated by
developers and marketers who failed
to deliver on their promises – and the
venture was as much a risk as it was
an opportunity for the Mahindra
Group.
Ramanathan said: “When I helped
to set up Mahindra Holidays, I
initiated research on the Mahindra
brand and the results clearly indicated
that consumers saw the brand as
rugged, yet reliable and trustworthy.
“We saw a huge opportunity in
leveraging this brand equity in the
vacation-ownership business, which
had suffered negative publicity in
India, the same as in several other
countries. The only caveat from the
Mahindra Group was that we should
run a business which would enhance
the Mahindra brand name.”
That requirement meant the
company needed to offer a product
with a real and lasting value, excellent
customer service and transparency in
terms of sales – it was the first to offer
a voluntary cooling-off period – but
Ramanthan realised it would need to
be different to established timeshare
products in other ways too.
“I think the one thing we did was
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12 RCI Ventures, January 2009
08:55 Page 4
to change the logic of the business,”
he said. “Rather than look at the
financial aspect – which is how we
thought most people viewed it, selling
time intervals rather than full
ownership – we approached it from
the point of view of the customer
experience.”
Nanda explained: “Usually an D Diners in the restaurant at
Mahindra’s Hideaway Resort in
owner or developer gets attached to Corbett can enjoy views of the
an idea and wants to sell his idea to unspoilt lower Himalayan
the customer, but we tried to hinterland of this holiday spot.
understand what the customer wanted
on a holiday and created a product
suited to those needs.”
Rather than following a fixed-week
model, the company opted for a
flexible 25-year package at a fixed
price, with a variety of options based
on season and size of apartment,
typically ranging from studios to
two-bedroom units. The average cost
is Rs 250,000 (US $5,000). GOING FOR GROWTH
Providing value for money and a The $100 million expansion plans at MHRIL –
deal that makes financial sense is key, which will see its inventory double to more
according to Ramanathan. He said: than 1,500 apartments through a
“Prosperity has only really come to combination of acquisitions, construction of
India in the last seven or eight years, new properties and development of existing
so a lot of Indian nationals are sites – are designed to keep pace with its
value-conscious.” rapid growth in membership, according to
Club Mahindra resorts offer food chairman Arun Nanda.
and beverage deals to owners – such Mahindra Holidays has more than 85,000
as the ‘Fun Dining’ concept which member families, a figure it expects to rise to
100,000 by March 2009.
Nanda said: “Growth at Mahindra
Holidays has been a direct corollary of our
pioneering efforts in the leisure hospitality industry. We are committed to providing
our members with truly invigorating family holiday experiences through unique
resort destinations in new locations. This capacity expansion is to accommodate the
future growth of our member base.”
The move will see a number of resorts expanded and the addition of six new
properties – one at Corbett in Uttarakhand due to open in February 2009, a second
at Tungi in Maharashtra and a third at Theog in Himachal Pradesh, supplemented
by three leased locations at Yercaud and Masinagudi in Tamil Nadu, and
Naukuchiatal in Uttarakhand.
Ramesh Ramanathan, MHRIL managing director, said: “Our pan-Indian network
of 30 resorts offers a diverse range of holiday experiences varying from beach
holidays to hill stations and jungle resorts.
“We took the decision to double our capacity base to 1,500 apartments to cater for
our rapidly increasing member base and the addition of six new resort locations will
significantly enhance the holiday options for our members.”
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A Snowcapped peaks,
wooded slopes and grassy
meadows make Club
Mahindra Snowpeaks in
Manali a perfect family
retreat.

D Sea, sand and swaying

palms provide a favourite
holiday experience at
Club Mahindra Varca
Beach in Goa.

provides three buffet meals a day for

around Rs 600 (US $12) – as well as
cash-back rewards for owner referrals.
The latter is working well, attracting
37 per cent of new customers
according to Ramanathan.

MULTI-SALES CHANNELS
The company initially sold through
permission marketing and home
visits, but now uses a variety of sales
channels, with some 200 in-house
salespeople, 80 direct sales agents and
40 ‘Holidayworld’ branded off-site
sales centres, typically located in
shopping malls.
A key part of the sales pitch is an
interactive presentation that gives
potential customers a clear idea of the
resort experience and the extent of
the facilities on offer, which the
company constantly updates and
improves according to Nanda.
He said: “Most of our resorts look WIDENING THE APPEAL
better now than they did when they Meeting the varied vacation needs of
opened because we are constantly those customers is another key factor
improving our product and service. according to Ramanathan.
“We are in the industry for the He explained: “We recognised
long haul and want to build a global early on that while we have 80,000
company so must constantly reinvest members, we have 320,000
in it. Most people think that once you customers. In other words, we
have sold a property you don’t need to recognise that each member is a
spend money on it, but we continue to family of four, and we need to meet
spend on our properties because they the requirements of the entire family.
are our showcases which will bring The husband, wife and children all
customers to us in the future.” have their own requirements on a

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RCI Ventures, January 2009 13
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COVER STORY
QUOTE: WE RECOGNISED EARLY ON THAT WHILE
WE HAVE 80,000 MEMBERS, WE HAVE 320,000
CUSTOMERS. RAMESH RAMANATHAN
holiday and we need to be able to
meet them.”
Those requirements are even
more varied in India, given that
children tend to leave home at a
much older age – usually when
they get married, and even then
sometimes live as an extended
family – so the Indian family
holiday often involves a wide range
of ages.
In addition to the age mix of
members and their families, MHRIL
also recognised that India’s growing
population and economic
prosperity were creating potential
new market segments and quickly
came up with products to match.
In 2006 it launched Zest, a 10-
year timeshare product for short-
breaks aimed at young professionals
aged 25-40. It currently has more
than 2,000 members, and five
resorts, with more to follow.
To meet the needs of even
younger family members, it is due
to launch camps for children in
March this year, which will operate
at locations where it already has
resorts, though not on the actual
resorts themselves.
Ramanathan explained: “The
idea is that we want to cover the
age segments, right up from the
fairly young. When we started out
we saw that timeshare in Europe
and the US was mostly bought by
people who were aged 50-55 and
above. We managed to bring the age
down – our product is mostly sold
to people aged 35-50, and 80 per
cent of our members are aged
between 35-55. Now we want to
take the average age down even
further.”
As well as covering age ranges,
MHRIL also intends to operate
across income segments, with plans
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14 RCI Ventures, January 2009
09:08 Page 6
“on the drawing board” to offer a
product for the budget traveller –
likely to focus on popular tourist
spots – at one end of the financial
spectrum, and a luxury fractional
D Pictured top: Bhainsrorgarh
product – expected to launch in Fort is marketed under Mahindra’s
May 2009 – at the other. Heritage Palace Breaks brand and
As if that wasn’t forward was ranked among the best ‘in the
know’ hotels in the Tatler Travel
thinking enough, the company has Guide 2008.
contracted with Group RCI to offer
a one-stop shop for travel services, D Pictured below: Bhainsrorgarh
Fort in Rajasthan is a fortified 18th
launched health, environment and century outpost of the Mewar
educational social projects near its Kingdom.
resorts through its ‘Cheers’
programme, and is exploring
options for international expansion.
Ramanathan said the company’s
global expansion would be based
on two key factors. First,
FIT FOR A KING
MHRIL’s newest holiday product
enables guests to stay in exclusive
properties where they could be
forgiven for expecting to be treated
like royalty.
Heritage Palace Breaks, part of
the Mahindra Homestays brand,
was launched at World Travel
Market 2008 in London in
November, and gives holidaymakers the opportunity to stay at two magnificent
properties. Chittoor Palace on Cheranelloor Island in Kerala is the former summer
residence of the Maharaja of Cochin, built in the 16th century and maintained to
reflect the history of the era.
Bhainsrorgarh Fort in Rajasthan is a fortified outpost of the kingdom of Mewar,
built in the 18th century on a 200 foot rocky ridge overlooking the Chambal River.
This resort was ranked among the best ‘in the know’ hotels in the Tatler Travel
Guide 2008.
The palaces join more than 100 other properties across India in the Mahindra
Homestays portfolio, which is designed to enable guests to “experience the real
India” according to Ramanathan. Mahindra Homestays properties combine the
comfort of a boutique hotel with the hospitality of staying with friends, offering the
chance to gain an insight into the cultural traditions, history and everyday life of an
Indian family. The product was launched in the UK in July 2008 and is initially targeted
at the British market, but is soon to be sold into French, German, and Italian markets,
as well as further afield.
Ramanathan said: “We identified this as an emerging segment of the holiday
market, and since it’s our stated objective to be a dominant player in the holiday
market, that means being dominant across a variety of markets.
“It makes tremendous business sense because it is a low investment model,
getting us into a new holiday segment and giving us access to new people. We just
needed to set up a website, do the marketing and inspect the homes, all of which we
were confident about.”
For more information visit www.mahindrahomestays.com
workV-Mahindra2-rb-JP:Layout 1 12/1/09
identifying resort locations where
its national owners would be likely
to visit (the company currently has
resorts in Bangkok, Pattaya and
Kuala Lumpur), and secondly, to
find destinations suited to
replication of the Club Mahindra
model – markets identified include
South Africa, the Middle East and
China.
Nanda said the company would
tailor its products to the market
rather than simply offering its
existing model. He added: “We
won’t be simply transplanting the
Club Mahindra model into a
country. We’ll look at the needs of
our customers in that market and
work to develop resorts and services
packages to meet them.”
10:57 Page 7
THE RELATIONSHIP –
MAHINDRA HOLIDAYS
AND GROUP RCI
Mahindra Holidays chose
Group RCI as its exchange
partner from the day it entered
the timeshare market.
Ramesh Ramanathan, MHRIL
managing director, said:
“During our growth journey,
Group RCI has been consistent
in its support and has, indeed,
proved to be our partner in
progress. As we expand and
grow, we are confident that
Group RCI will continue to add
value to our business ventures.”
Jonathan Back, below,
managing director, Group RCI
EMEAI, recently visited India to
meet with Mahindra Holidays
and he said: “We at Group RCI
are proud to have been chosen
by the Mahindra Group and
Mahindra
Holidays as
their exchange
provider.
Mahindra’s
holiday product
is a shining
light in India, where its
respected brand name and
the consistent high quality of
its product, operation and
service have done so much to
build nationwide acceptance
C Pictured top: Tusker Trails resort in Thekkady, as and trust of timeshare.
the name suggests, is a place where guests will be
able to commune with wildlife among chains of
Mahindra is now
hills and spice-scented plantations, in the crisp, expanding overseas and I
cool air of the Western Ghats. know it will enjoy great
C Pictured below: The family focus of Mahindra success in all its ventures,
holidays does not stop it from spoiling guests with and bring credibility to our
touches of Eastern luxury and sumptuous industry in any new market.
surrounds, as seen here in the bedroom of the Club
Mahindra Kangra Valley resort in Dharamshala.
Mahindra is undeniably one of
the finest ambassadors we
have.
“I’m pleased to be able to
Ramanathan said: “We must say that a great mutual trust
exploit any opportunities that come and respect exists between
our way – Club Mahindra as a our two organisations and this
brand would be less relevant than is at the very foundation of our
the concept and product itself working relationship.
outside India. “Mahindra Holidays is our
“However, we pride ourselves on fastest-growing affiliate in the
the fact that we are innovative and region and we service more
bold in our thinking and we’re not than 66,000 of its members,
afraid to think big, and to think making it a most valued
differently.” V associate.”
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RCI Ventures, January 2009 15
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MARKET REPORT
SERBIA:THE ONE
TO WATCH IN EUROPE
In recent months, Serbia’s status as a trade and
investment market has started to resurface.
KATHERINE STEINER-DICKS takes a look at one of
South East Europe’s most intriguing and speculative
property markets to find out if it has the potential to
be a key player in the shared-vacation ownership
market sector.
LONG before the religious and political
unrest in the Balkans during the 1990s,
Serbia was envied within Eastern
Europe as a powerful business and
political player.
It is centrally located in the Balkans
and has transport links, including road,
rail and waterways, to Hungary, Austria,
Montenegro, Macedonia, Bosnia and
Herzegovina, Croatia, Romania,
Bulgaria and Asia Minor. But what is
most telling about this country is the
fact that the European Union is putting
Serbia on the fast track to EU
membership, following favourable
elections earlier this year, with
inclusion likely to occur in 2010. Once
EU membership is a reality, Serbia’s
property investment market will
become even more favourable to
foreign direct investment.
Other factors are also helping Serbia
regain its trade status, including The
World Economic Forum, which
recently brought Serbia into the Global
Competitiveness Report for the first
time ever, ranking it 77th out of 102
countries surveyed. Another positive
economic breakthrough in recent
weeks is the news of US Secretary of
State Colin Powell signing a decree
restoring the normal trade relations
(NTR) status to Serbia-Montenegro as a
sign of support of the state union’s
reforms.
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16 RCI Ventures, January 2009
Page 2
ECONOMIC DRIVERS
And for hotel and resort development
investors, such positive development
means Serbia is the next market in
Eastern Europe to watch since, at this
moment in time, Serbia is an
institutional and commercial investor
market first and an individual
investment market second.
Wealthy investors at present are the
only true active property investors in
Serbia, where cash is king and anyone
hoping to afford a mortgage will have
to put up a 20 per cent deposit and be
tied to an interest rate of eight per cent
over a 25-year term. According to a growing middle class eager to own
report by property investment analysts, property, to shop for the latest
Property Secrets, mortgage lending consumer goods and to live in
accounts for 2.9 per cent of the nation’s modern accommodation.
gross domestic product (GDP). The same trends occurred in other
Much of the land is underdeveloped Central and Eastern European (CEE)
and there is a serious shortage of markets. Not unlike Warsaw’s property
residential housing in Serbia, despite a market in its first growth stages, Serbia’s
severe drop in population growth since growth has curtailed to some degree,
the 1990s. But the ascent of more but if major Serbian cities are to mirror
commercial property being built – Warsaw we will soon see a rise in
office complexes, shopping centres, etc growth in the region of two to three
– is always a sign of what’s to come in a per cent during the course of the next
burgeoning long-term residential and three years. The hottest cities in terms
buy-to-let property market. of potential for hotel and resort
Property prices doubled between developers are Belgrade, Novi Sad and
2001 and 2006, which is a sign that Nis. Notably, Belgrade and Nis both
Serbian property developers, investors have international airports.
and estate agents are keeping a close eye As in other markets within Eastern
on how they can capitalise on a slowly Europe, such as Poland and Romania,
workV-Serbia2-rb-JP:Layout 1 29/12/08 12:08 Page 3

Places such as Novi Sad, pictured, while having all the appeal of
a tourist destination are relatively underdeveloped in terms of
holiday accommodation.

once Serbia joins the EU, the mortgage

market will become more competitive
for the domestic homebuyer. This is not
to say that there are not currently
homebuyers in Serbia, but the road to
home ownership for the Serbs is a
conservative one using savings and
financial help from family members.
It’s not uncommon in markets such as
Serbia for mortgages to be bought
through the family’s combined earnings
and assets and not just those of the
individual buyer.

SERBIA AS A TOURIST MARKET

On the Property Secrets website, the
number of tourists to Serbia is reported
to have risen by a massive 90 per cent
since 2000. The tourism market Club Satelit’s well-appointed interiors and the quality of the furnishings
generated $300 million in revenues in and fittings reflects the high expectations of consumers in this market.

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RCI Ventures, January 2009 17
workV-Serbia2-rb-JP:Layout 1 29/12/08 12:34 Page 4

MARKET REPORT

2005 – a number likely to have been

exceeded in recent years.
The country offers not only a
sophisticated café culture in its bustling
cities, such as Belgrade and Novi Sad,
but also a variety of attractions for spa
and nature lovers.
For developers and investors keen to
get in early, it’s worth knowing that
Serbian hospitality properties are in
need of upgrading to internationally
recognised standards which, potentially,
make this market a most profitable
investment opportunity. With
breathtaking scenery found in its
mountain regions of Zlatibor, Tara and
Kopaonik, all reminiscent of a 1960’s
James Bond film location, developers
can’t be blamed for their enthusiasm in
wanting to create hotels and resorts
never before seen in the region.
Besides the underlying spa culture,
there is a growing popularity for
agritourism providing opportunities for
the hotel developers, as well for the
smaller rental property investor. UK-
based property rental site,
www.holidaylettings.co.uk, has just
three Serbian properties on its online
books so far. However, the high quality
of the properties illustrates the
expectations of the customers and the
standards of the owners.
This website indicates the average
rental rate a Belgrade property owner
could expect to charge ranges from Pictured top: Club Satelit, one of two new Group RCI affiliate resorts in Serbia, is
€321 per week in winter months to an intimate property set to attract an upscale buyer. Centre: The spacious villas
€413 per week in peak season. Rural and landscapes of Kraljevi Konaci. Bottom: Celebrating two new affiliations to
Group RCI are, from left, Group RCI’s Brett Archibald, Jonathan Back, Geoff
properties can potentially generate Ballotti, developers Goran Vuckovic and Srdjan Vasic, Group RCI’s Dimitris
€556 per week year-round. Manikis, developer Ratko Jeremic, and Group RCI’s Vassilis Themelidis.

TWO NEW AFFILIATES IN
SERBIA FOR GROUP RCI
Group RCI has recently welcomed two
new affiliates with high-quality resorts
in the picturesque Zlatibor mountain
region. They are Club Satelit and
Kraljevi Konaci.
Commenting on the new Serbian
affiliations, Jonathan Back, managing
director, Group RCI EMEAI, said: “We
want to invest in Serbia and are pleased
to have two first-class resorts as our first
affiliates in this fabulous new
destination.
“The country is accessed by three
international airports and the variety of
tourism products it offers have already
had exposure to the international
tourism market. This, together with its
close proximity to many highly-
promoted European holiday
destinations, makes us confident Serbia
is set to see a rapid growth in its
inbound and outbound visitor levels
which makes it a good place to be for
timeshare.”
Zlatibor has long been renowned for
its clear mountain air, spas, excellent
skiing, and a myriad of outdoor
pursuits including trekking, cycling and
fishing among lakes, rivers, lush
pastures and pine forests. Add to this a
destination that offers resorts
embodying high standards and you
have a winning combination for
timeshare.
CLUB SATELIT
RCI-affiliated resort, Club Satelit, offers
the intimacy of a smaller development
comprising 12 one-bedroom units and
eight studio apartments, together with a
restaurant, indoor pool and fitness
centre. The apartments are light, airy and
fitted with every home comfort which

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18 RCI Ventures, January 2009
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PROPERTY SECRETS ON SERBIA

Anna Grybel-Kloc, property investment
analyst with consultancy, Property Secrets,
spoke exclusively to RCI Ventures about the
current and future risk and return of
property development in Serbia, and clears
up a few misconceptions on foreign
ownership of Serbian property.
Q: How would you describe the Serbian property investment
market at this point in time?
A: We class the residential property market in Serbia as
speculative and, as yet, lacking the components crucial for
sustained growth, namely, an emerging middle class
buyer, affordable housing finance and the willingness
among Serbs to borrow in order to buy property.
However, a speculative market also means high risk in
return for high reward.
The market is currently more attractive for
institutional investors in commercial properties, like
offices or shopping centres. The yields are higher in
these segments than in more developed CEE markets like
Poland or the Czech Republic.
Q: How does it compare to other CEE property markets in terms
of property prices?
A: Serbia is a fairly undiscovered location, especially for
foreign property investors. Belgrade has the highest
property prices in Serbia, but still low if compared to
Warsaw, Prague or Bucharest. The current price level of
€1,400-1,700/square metre is similar to prices in
Budapest or Sofia.
In Novi Sad or Nis prices vary from €900 to €1,200
per square metre. Similar price levels can be found in
third-tier cities in Bulgaria such as Ruse, or Romania’s
Baia Mare.
The price level in Serbia is not as low as many would
expect. This is partially because of the strong performance
of the market in the past – prices doubled between 2001
and 2006 starting from a very low, base level – and the
country’s the country’s large informal economy.
Q: Is it true that you have to be a Serbian resident to own
property in Serbia?
A: No, currently, non-residents can freely purchase
property in Serbia. The only restriction is that they can’t
buy properties in proximity to military land.
Q: Which factors are making Serbia a more dynamic place for
property investment?
A: Serbia has only just started to develop, having first
shopping malls, offices, and so on, opened only recently.
That means the market is at the beginning and has a lot of
room and potential to develop further. The huge boost that
property markets like Poland or Slovakia experienced after
joining the EU still lies ahead for Serbia.
Q: Which cities and regions are the safer bets for investors
and why?
A: As potentially the best investment location we’d tip
Belgrade, Novi Sad and Nis. They are the most important
economic centres in Serbia with strong and improving
economies and they attract significant foreign
development investment. Their property markets are the
largest and the most developed in the country.
Q: What factors are inhibiting faster growth?
A: The key factor driving any property market is the
availability of credit. And even though it’s hard to forecast
the development of a mortgage market in the current
climate, we believe Serbia has strong potential here.
The key indicator is the mortgage debt to GDP ratio, which
in Serbia is only around three per cent. That’s low by CEE
standards (8.3 per cent in Poland, 9.6 per cent in Slovakia,
and far from the Western Europe average of 50 per cent).
Currently, lending criteria in Serbia and the
requirement that clients have to meet lenders when
applying for a mortgage are very conservative, but we can
be sure that in the medium- to long-term they will be
eased as has happened in other CEE countries.
For more information visit: www.propertysecrets.net

characterises timeshare accommodation.
The names behind this resort are
Canadian national, Gilles Durand,
developer of RCI-affiliated Club Villas
Jazmin in the Caribbean, and Srdjan
Vasic, who also owns Closer Marketing
Club (CMC) based in Belgrade.
Vasic has been a partner in the
company since 1995 and has owned
the business since 2000. Having
worked in the industry for 15 years
he decided to turn his talents to
developing luxury hotels and formed
a partnership with Gilles Durand.
Vasic said: “Club Satelit has an air
of exclusivity that’s right for this area,
which attracts upscale visitors to its
excellent ski slopes and spas. We
plan to extend the property on
neighbouring land and are now
considering a five-star offering.”
Vasic is spearheading timeshare
in the region, which is growing in
popularity with wealthier clientele and
the upper middle classes. That is why
he and his team are carrying sales and
marketing on and off site. CMC has
two sales desks in Belgrade, one in
Sofia in Bulgaria, one in Novi Sad,
Serbia’s second largest city, and one in
the nearby Former Yugoslav Republic
of Macedonia. He recently incorporated
a new sales deck on-resort.
Vasic has worked with Group RCI
for many years. “I
have good relations
with Group RCI as
I’ve worked with the
company selling
inventory in Spain
and the Caribbean –
Srdjan Vasic.
promoting Club Villas
Jazmin,” Vasic explained.
Vasic plans to extend the property
on neighbouring land owned by the
company. He added: “The big question
is – do we commit to a five-star luxury
product? This area of Zlatibor has
much to offer the upscale purchaser,
being renowned for its spa and health
tourism, it is also a fabulous area for

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RCI Ventures, January 2009 19
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MARKET REPORT

skiing and enjoys a great climate. It

is a good year-round location.”

KRALJEVI KONACI
On the central Zlatibor plateau in a
lakeside location sits Kraljevi Konaci
resort or ‘the King’s shelters’ as the name
translates. This Group RCI-affiliated
property is designed to blend with the
line of the surrounding pine forests
and offers exceptionally spacious
accommodation in the form of
110-square metre two-storey villas with
garage and garden. This property was the
dream of Ratko Jeremic. He said: “It was
17 years ago when I first had the vision
for this resort concept and I have been
developing and enhancing it ever since.
I was inspired by my travels, working
on resort construction projects all over
the world, and I wanted to bring the best
of all that I saw back to Serbia, my
homeland, in my own resort.
“The first stage was completed in
1999 and comprised 107 very spacious
villas and on-site restaurant. The second
phase is now underway and will see the
build of a new hotel on the site, more
Pictured top: Kraljevi Konaci is the result of Ratko Jeremic’s vision and passion. His
villas, a spa centre, and a 600-seat €50 million resort will complete in approximately five years. Below: from left with the
conference hall and commercial centre. Group RCI affiliation plaque are Ratko Jeremic, Vassilis Themelidis and Goran Vuckovic.
The project will be completed in about
five years’ time at a cost of €50 million.” returned to Serbia and joined with outside their native country, according to
While most holidays are taken in the Jeremic as a co-founder of the Kraljevi Vuckovic. “The economy in Serbia is
summertime, anyone keen for a unique Konaci Vacation Club. much more stable than it has been
and breathtaking ski or snow-filled Vuckovic said: “We wanted to affiliate previously and we are experiencing
holiday will find Kraljevi Konaci an ideal with Group RCI to provide the exciting strong growth,” he said. “The granting of
choice. Jeremic said: “We have found exchange opportunity to our owners. visas for travel remains an issue for
high demand among Serbians and the This resort is one of the best in Serbia, Serbians, as the country is not yet part of
Balkan States. Serbia’s economy has now having been developed with real passion the European Union. However, Serbians
stabilised and is growing. We have been by Mr Jeremic, it has an excellent find it easy to visit Greece, which is a
operating for several years without an location at a lakeside.” particularly popular destination for them.”
exchange network but affiliating to Vuckovic said he was fortunate to Group RCI’s Vassilis Themelidis
Group RCI is now important for us to meet Ratko Jeremic who has the regional director for South East Europe,
allow our prosperous Serbian owners the construction expertise needed for such a says that the market potential of Serbia as
opportunity to start experiencing project. He added: “The project is a an entirely new market is exciting for the
holidays in other countries. Timeshare is mixed-use model and I was able to company. He added: “Group RCI wants
new to Serbia and it’s very exciting to be contribute my own expertise in selling to invest in this new market because we
able to introduce a new quality product timeshare. believe it is the way forward. We’re
to this market.” “We find timeshare is in high confident that Balkan consumers will
The resort’s general manager, Goran demand among Serbians. Zlatibor is also embrace the fantastic opportunity, not
Vuckovic, has been in the tourism and a popular winter destination, particularly only to enjoy holidays in these first class
timeshare industry for 17 years having for the Balkan holidaymakers. And this is Serbian resorts, but to experience the
marketed and sold resorts in Serbia in the first time Serbia has had any quality world of exciting quality resorts that will
both Belgrade and Novi Sad as well as timeshares available.” be available to them through the Group
outside the country in Skopje, Greece, Serbians are also keen to take RCI affiliation of our new Serbian
and Cyprus. But it was in 2001 when he advantage of timeshare opportunities developers” V

|
20 RCI Ventures, January 2009
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workV-Condo2-rb-JP:Layout 1 23/12/08 11:15 Page 2

CONDO-HOTELS
QUOTE: WE PACKAGED IT UP, PUT OUR BUSINESS MODEL IN PLACE AND
SOLD 92 UNITS, COSTING BETWEEN £99,000 AND £400,000 IN FOUR-AND-A-
HALF WEEKS. MARK BINGHAM

IN IT FOR THE
TERM
LONG
The global credit crunch may have
claimed some casualties in the
‘hotelinvest’ sector, but there are
those who are convinced this
business model will pay dividends
in the long term. SARA MACEFIELD
talks to three companies who have
adapted their condo-hotel operations
to weather the financial storm.

WHEN they emerged on to the UK lodging GuestInvest founder, Johnny Sandelson,

scene a few years ago, condo-hotels were
hailed as the new model for savvy property
investors looking for high-return, added-value
investment opportunities.
As property prices soared, fuelled in part by
easy credit and the buy-to-let boom, the idea
of purchasing your own hotel room and
watching it ramp up even more earnings
proved irresistible to some.
The benefits to investors of condo-hotel
ownership are three-fold – the ability to use
the accommodation for a specific period of
time, capital appreciation of their own hotel
room and a percentage of its earnings from
hotel operation.
A RISE AND FALL
This seemingly win-win situation was quick to
attract investors once the concept was
introduced to Europe and one of the highest
profile exponents of the model was market
newcomer London-based GuestInvest. It
entered the market in 2004 with the distinctive
catchphrase ‘Earn money while others sleep’,
which soon became a common sight across
London, on the city’s buses, taxis and
underground stations.
The company’s developments were in
London where its first two projects,
Guesthouse West and Guesthouse Nest, soon
sold out. These were joined by three others –
The Chiswell Street Hotel, The Jones, and the
chic celebrity haunt Blakes, a magnet for the
rich and famous.
planned to sell rooms in the latter for
£1 million each but, before any sold, the
company fell victim to the banking crisis.
OWNER INVEST SET TO SOAR
It would be logical to think that such a high-
profile failure might pull the rug from under a
concept that had all the hallmarks of being a
runaway success, being similar to developments
in the US and France, where condo-hotels, also
known as apart-hotels, are well established.
However, while GuestInvest may have
disappeared, for now, other names and brands are
not only ready to fill that market space, but
confident that the differences in their business
models will make their proposition a strong and
economically viable one, even
in these tough financial times.
Owner Invest was set up last
year by a group of hotel
entrepreneurs with backgrounds
in the financial and timeshare
industries who identified
condo-hotels as a market ripe
Mark Bingham.
for development.
Managing director Mark Bingham admits
that, having studied the US condo-hotel model
and being inspired by GuestInvest’s UK
operation, he felt it necessary to change some
vital components for his own company. He
explained: “Unlike GuestInvest, we sell the
freehold and not the leasehold of our properties,
so this makes it a safer bet for investors as the
rooms cannot be taken off them. Our product is

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22 RCI Ventures, January 2009
workV-Condo2-rb-JP:Layout 1 23/12/08 11:15 Page 3

Pictured clockwise from top: Owner Invest quickly sold

out 29 of the 34 condo-hotel rooms in its city centre
hotel in Frankfurt. A graphic of Owner Invest’s Sesimbra
Bay Beach Resort on Portugal’s Costa Azul which opens
in 2010. The Bali Kuta Hotel & Residence is Owner
Invest’s four-star property in Bali where a piece of
paradise at this property will cost from £25,000.

|
RCI Ventures, January 2009 23
workV-Condo2-rb-JP:Layout 1 12/1/09 17:06 Page 4
CONDO-HOTELS
QUOTE: LONDON IS ONE OF THE GREAT CAPITALS OF THE WORLD AND FOR A
COMPANY THAT STARTED ON THE SMALL ISLAND OF MADEIRA TO ENTER A
MARKET LIKE LONDON SHOWED WE HAD MATURED AS A BRAND. PETER BOOTH
a hybrid of the GuestInvest concept and
wholly-owned freehold property.”
Owner Invest’s first condo-hotel started
selling in January 2008. The Royal Suites Marbella
was a newly-built apartment complex that had
been left without any buyers in the aftermath of
the Spanish property market collapse.
Bingham said: “We packaged it up, put our
business model in place and sold 92 units,
costing between £99,000 and £400,000, in
four-and-a-half weeks.”
The company then marketed its next
property, a city-centre hotel in Frankfurt where
it is selling rooms for between €93,000 and
€103,000. To date, 29 of the 34 rooms have
been sold and Owner Invest is now turning its
attention to its next property, a resort hotel in
Portugal where rooms will have a price tag of
between €169,000 and €600,000.
Bingham believes the differences between
Owner Invest and GuestInvest will be the key
to its survival. Not only is Bingham’s company
keeping the purchase prices lower, its strategy
is to develop properties in tried and tested
tourist destinations and to target pure investors
who are primarily looking for a vehicle for
self-invested personal pensions or SIPPs.
SIPP purchases do not allow any personal
usage.
“All but two of the Frankfurt hotel rooms
were SIPPs puchases,” he added. “We rarely get
people who buy for lifestyle. If they want a
lifestyle product, our advice is not to buy any
of our products.”
Despite this, Owner Invest does give its
buyers up to 56 days’ personal use at their
properties, though Bingham doesn’t expect all
the days to be taken as it eats into the owner’s
letting income from their room.
The company promises that investors will
receive 50 per cent of the revenue generated by
their room and on its first three properties the
return on investment is predicted to be between
eight and 12 per cent. Bingham pointed out that
where SIPPs are involved, the tax-free element
pushes up the income “phenomenally”.
To counter financial jitters among its
purchasers, Owner Invest has put together
financial packages that buyers can utilise if they
need to borrow funds. Its latest project, the
Sesimbra Bay Beach Resort on Portugal’s Costa
Azul and due to complete in 2009, comes with
a 90 per cent mortgage agreement, meaning
buyers only need 10 per cent deposit.
As a further benefit, on completion the
developer will refund seven per cent of the
|
24 RCI Ventures, January 2009
deposit.
Bingham said: “This effectively
means people are buying for just
three per cent and the developer
pays all the closing costs. Where else
can you get a €320,000 property
on a frontline Portuguese beach and
only have to put down €6,000?”
As a general rule across Owner
Invest’s resorts, buyers can decide
whether to buy the room outright
or borrow what they need and use
the rental income from the hotel
room to pay off the balance.
PESTANA’S LONDON DEBUT
Group Pestana is Portugal’s largest
tourism and leisure group and
Pestana Hotels & Resorts is making
its debut in London with its first
condo-hotel property, the Pestana
Chelsea Bridge Hotel, due to open in
Clockwise from top:The
October 2009. Pestana Chelsea Bridge Hotel
Group Pestana’s board director, Peter is Group Pestana’s first
Booth, admitted that acquiring the site condo-hotel property. The
hotel, located bottom left of
on the south side of the Thames adjacent picture, enjoys a prime London
to Battersea Park had marked a location which is important for
significant milestone for the company. this business model to sustain
high occupancy levels. Rooms
He said: “London is one of the great are exceptionally spacious and
capitals of the world and for a company well appointed. The luxury
that started on the small island of Madeira finish of the hotel comes at a
room rate of between €140
to enter a market like London showed we and €170 per night – a rate
had matured as a brand. that’s sustainable in a resilient
“One of our strategies was to grow city hotel market.
our business and find hotels in major
European capitals. Because the London
site is a new-build
project, we could
start with a blank
canvas and build a
hotel exactly to
our specifications.”
The result is a
218-room four-
star property with
spacious 30-
square-metre
rooms that Booth
claims are larger
than those in most
London hotels.
Having studied
the market, Group
Pestana felt the
project would
lend itself to the
workV-Condo2-rb-JP:Layout 1 12/1/09 17:07 Page 5

SANDALS ON
THE SCENE

condo-hotel model, but only on its own terms. Unlike the Such is the allure of condo-
GuestInvest model, Group Pestana plans to sell only one-third hotels that family-owned
of the hotel’s rooms on 990-year leases. This enables the Caribbean all-inclusive chain
company to maintain its stake in the property – which it will Sandals Resorts is considering
also continue to operate rather than putting the day-to-day its first move into this market.
running of the hotel into the hands of an outside company as The company, which has a
GuestInvest and others have done. string of resorts across the
Booth said: “By selling off 66 rooms, it generates enough Caribbean under four brands -
cash to help us expand on this model, but also maintains our Sandals,
vested interest in the hotel which is also good for the people Beaches, Royal
that invest with us.” Plantation and
In view of the economic downturn and fears of recession, Grand
Booth conceded that it was likely to be more difficult to sell the Pineapple - says
rooms as quickly as originally anticipated. “The timing has been that demand
unfortunate,” he admitted. “We are still getting a high level of from customers
interest, but we will have to see how the market develops.” and its own staff wanting to buy
Having decided to make the Pestana Chelsea Bridge Hotel its into the Sandals product has
first condo-hotel in October last year, the company launched prompted its move.
the rooms in February with a price tag of €320,000. The The company intends to
company is promising buyers they will receive 50 per cent of build a luxury Royal
the net room revenue with a gross six per cent return Plantation resort on a 21-acre
per annum on the overall investment in the first two beachfront site next to one of
years. Owners will also be given 30 days’ usage of its Beaches family resorts on
their room or an option to use half their allocation at Providenciales in the Turks
the group’s other hotel properties around the world, and Caicos Islands.
including in Brazil, Mozambique, Argentina, South Sandals chief executive,
Africa and Portugal. Adam Stewart, pictured,
Booth said the initial response was better than said plans had been drawn
he’d hoped with around 30 potential buyers up for the 100-room
expressing interest and 15 or so planning to buy. But property, which would have
problems surfaced when it came to purchasers three-, four- and five-
getting finance after the halt in mortgage lending. bedroom apartments, along
To date, 10 rooms have been sold and plans are in with a choice of restaurants
hand to market to the group’s 25,000 timeshare and a spa.
owners. “We’re looking at 60 units initially and I think The company intends to
there’s a sales opportunity through existing Pestana sell off most of the
owners and we are following up leads,” said Booth. apartments, keeping back a
The hotel rooms to be sold will take up three floors handful for itself.
in the middle of the 11-floor hotel, but any that are However, Stewart
not sold by the time the property opens will simply be stressed that the best selling
run as normal hotel stock. “It’s a hotel product we’re point would be that Sandals
selling,” he added. “If we have a buyer, that’s good; if would continue to run and
not it stays within the Pestana portfolio and we will manage the property,
still derive the benefits.” bringing its branding and
Room rates at the Chelsea Bridge are set between experience to the
€140 and €170 a night and the company is confident development.
the resilience of the London hotel market will help to Originally, the group had
sustain such rates, despite difficult trading conditions. intended to start work on the
However, Booth admits the group hotel this year, but plans have
is treading carefully with any European been delayed for around 12
expansion plans. He said: “We want to months due to the unstable
see if this concept has wider appeal. economic climate. Stewart
It’s a low-risk strategy for us and we’re said if the project was
well-placed to grow our business in successful, Sandals would
the next few years as opportunites look to add a second
come up.” V Peter Booth. condo-hotel in Jamaica.

|
RCI Ventures, January 2009 25
workV-BizProWRocks2-rb-jp:Layout 1 23/12/08 09:54 Page 2

BUSINESS PROFILE
QUOTE: I KNEW I’D BE TAKING ON BOARD MORE OF THE RISK
BY BEING THE DEVELOPER, BUT THAT ALSO MEANT A GREATER
SHARE OF THE POTENTIAL REWARDS. STEVE CARLE

NEW
COMPANY
NEW
DEAL
After years of
realising
developers’
dreams, three British architects have
decided it’s time to make a few of their
own come true. DINAH HATCH discovers
that the partners of newly-formed
property development company, Blue C
Developments, are thinking big with their
first residential overseas resort on the
island of Cyprus.
|
26 RCI Ventures, January 2009
workV-BizProWRocks2-rb-jp:Layout 1 23/12/08 09:55 Page 3

Clockwise from top: A graphic image of the

façade of Whiterocks, which will be one of the
most upscale residential resorts on Cyprus when
completed in 2012. Some examples of the
cutting edge design of Integrated Developments
Ltd and some of the brand names in their
portfolio, among them Neal’s Yard, Champneys
Health and Spa Resorts, Marks & Spencer and
the Royal Festival Hall.

JUST four years ago Steve an aspirational consumer is

Carle, Mark Lumbis and Sarah
Graves formed Integrated
Developments Ltd (IDL), a
company of award-winning
architects in central London.
Now they’re set to make their
mark in the residential resort
market.
The partners had ambitions,
not only to bring their
trademark cutting-edge,
minimalist design to
commercial buildings, but to
extend their expertise to
complete land development
projects of their own, a goal
they’d all shared while working
in their previous companies.
Once in control of their
own destinies, Carle, Lumbis
and Graves tested the developer
waters with small scale
residential projects, dotted
around the UK. Building on the
success of those early projects,
they decided to branch out
internationally with the
purchase of properties in Malta
and two large development
plots near Bafra, Cyprus, an
area which still offered value
for money in terms of land
prices and labour costs, as well
as good land and property
value appreciation prospects.
Recognising that this scale
of development was a whole
new ball game, the partners
created a new brand and
dedicated company, Blue C
Developments, specifically for
Whiterocks, a luxury residential
resort complex in Cyprus.
Upscale design appealing to
bread and butter for Carle and
his partners, whose IDL clients
include Champneys Health and
Spa Resorts, Marks & Spencer
and the Royal Festival Hall in
London.
Carle said: “In previous roles
I’d spent so much time working
on ground-breaking designs for
others. Clients would come to
me with fantastic land parcels
and ask our practice to design
something wonderful, and I
realised that I’d actually like to
be doing that for myself. I knew
I’d be taking on board more of
the risk by being the developer,
but that also meant a greater
share of the potential rewards.”
WHITEROCKS
When Carle, Lumbis and Grave
saw the 49,000-square-metre
land plot on the east coast of
Cyprus looking out to sea, they
knew it was the location to
realise their vision for
Whiterocks.
The small village of Bafra
will be home to the
£55 million Whiterocks
development of wholly-owned
freehold properties set in a
resort-style complex. It is the
only officially-designated
tourist area in the north part of
the island, and investment in
tourism infrastructure in Bafra
will fund a new marina, coastal
tropical gardens and a golf
course. Blue C Developments
will also be building a
boutique-style shopping mall
adjacent to the luxury

|
RCI Ventures, January 2009 27
workV-BizProWRocks2-rb-jp:Layout 1
BUSINESS PROFILE
QUOTE: WE’RE TALKING TO GROUP RCI ABOUT WHAT THEY THINK PEOPLE
MIGHT BE LOOKING FOR IN A RESIDENTIAL RESORT STYLE DEVELOPMENT
AND WE’LL THEN PROCEED ACCORDINGLY. STEVE CARLE
residential complex.
With an architect’s desire
for design perfection at the
heart of the concept, Carle is
confident the four-phase,
408-unit resort will be the
most luxurious property
development in Cyprus for a
long time.
He said: “We knew we
could go into this market and
create something really
special that was simply not
available and that’s what we
have done.
“Whiterocks will be a
truly five-star development.
The luxurious, high-quality
finish will differentiate our
product from others in this
region. As architects it’s
usually a case of getting the
client to agree to your design
but we are our own clients in
this development so we are
aiming for ultimate luxury.
“We spent two years
designing Whiterocks and we
believe that tells. We’re proud
of everything about it, from
the architecture, styling and
build quality, to the
furnishings and fittings.”
The completed
development will incorporate
more than 20 different
designs, and comprise a mix
of one- and two-bedroom
apartments, duplexes,
penthouses, houses and villas.
Many of the houses and villas
will have long terraces,
bespoke pools and integrated
whirlpools. Carle added: “You
name it and we’ll have it
because we’ve incorporated as
many different types of
accommodation as possible to
attract a whole range of
buyers and budgets.”
The luxury aspect of the
development does not,
however, eclipse another
important feature of the resort
– sustainability. To start with,
as much construction
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28 RCI Ventures, January 2009
9/1/09 14:12 Page 4
material as possible will be
sourced locally.
The incorporation of a
cross-ventilation system will
minimise the need to use
air-conditioning, while smart
shading will reduce the
potential for overheating
within guest areas. All the
resort’s electric lighting will be
energy-saving and grey water
will be recycled for use in the
irrigation of the resort gardens.
PHASED PLAN
The first phase will be
complete by July 2010,
though Blue C will be selling
off plan and showhomes will
be open for viewing by next
spring.
There will be 11 Steve Carle, front left, signing the first European R&E
complexes on four or five contract with Jonathan Back, watched by Mark Lumbis,
levels in phase one, with a managing director of Blue C Developments, back right,
and Geoff Ballotti, president and CEO of Group RCI.
total of 96 two-bed
apartments. Like the rest of
the development, they will be ABOUT STEVE CARLE
sold ready to move in and Steve Carle has been an architect for 19 years. He started out
enjoy, coming with with his own architectural company, Consarc, before joining
everything a home needs, Lewis and Hickey Architects as managing director of its Prague
right down to wine glasses in operation. Lewis and Hickey then appointed Carle as managing
the kitchen and towels in the director of its London offices, where he worked until 2005 when
bathroom. The luxury touch he left to set up Integrated Developments Ltd.
will be present throughout,
from the branded appliances
in the kitchen to the 36-inch
HD plasma TV and designer
furniture in the lounge.
The design underlines the
quality of the resort, with
each apartment having two
balconies and 360-degree
views, while high ceilings
create a feeling of light and
space, complemented by the
open-plan design.
The second and third The completed Whiterocks development will
incorporate more than 20 different
phases will comprise 250 accommodation and architectural styles.
one- to three-bedroom
apartments and penthouses in
elegant linked terraces. A
‘village square’ will be created
in the heart of the resort
where residents can visit
Turkish baths, work out at the
gym, go for a dip in the
workV-BizProWRocks2-rb-jp:Layout 1
All Whiterocks properties will be sold on the basis of
whole ownership with Group RCI’s R&E programme
wrap. Phase one is set for completion in July 2010.
indoor or outdoor pools, or
simply sit in the communal
gardens before lunching at
poolside bars and restaurants.
Family needs are high on the
agenda with playgrounds,
children’s pools, internet cafés
and creches all likely to be
incorporated into the plan.
Carle explained: “The
great thing is that we’re very
flexible and can design and
build what people want.
We’re talking to Group RCI
about what they think people
might be looking for in a
residential resort style
development and we’ll then
proceed accordingly.”
Phase four will see Blue C
concentrating on the more
private accommodation in the
resort, creating two sites of
individual villas with their
own pools. “We’ll still make
sure the residents in these
properties have all the
advantages of the facilities on
site, but we’ll be adding more
privacy and exclusivity to the
deal,” said Carle.
Phase one is due for
completion by July 2010,
with resort completion set for
April 2012. Phases two and
three are programmed to start
on site in April 2010, while
phase four will start in April
2011. All properties will be
freehold sold on the basis of
whole ownership and
apartments start at £80,000,
with the villas and private
houses starting at £230,000.
9/1/09 14:13 Page 5
THE MARKET AND
MARKETING
As the consumer cash
liquidity crisis bites ever
deeper, finding purchasers
will be a challenge. Carle
believes the location of
Whiterocks will be a big plus
in sales. He explained: “All
the signals are strong that
both governments in Cyprus
are now behind reunification
and, if that happens, property
values are likely to rise so it
represents a good investment.
Also, we’re dealing in a
relatively stable Turkish lire,
not euros, so we don’t have
exchange rate issues.”
As the first European
development to sign to Group
RCI’s unique Rental &
Exchange (R&E) programme,
Blue C can pass on to
purchasers the benefits of
flexibile property use –
owners can exchange use
periods for holidays through
Group RCI’s global network of
more than 4,000 affiliated
resorts and optimise rental
potential through Group RCI’s
inventory distribution
network – making it an
attractive proposition to the
savvy buyer.
Carle said: “We will be
targeting holidaymakers who
have a good eye for an
investment. These days there
aren’t many people who buy
properties simply for their
retirement. People want to
take the family out on holiday
there knowing it is generating
a good income to pay the
mortgage the rest of the time,
so they think of it as an
investment.
“Group RCI has 35 years
of experience in the holiday
exchange business and, via
sister company, the Holiday
Cottages Group, access to an
international rental
distribution network
supporting about 30 brands.
Being able to work with an
established and reliable
rental company will help
our purchasers maximise
their investment potential
which greatly strengthens
our sales proposition. The
access our customers will
enjoy through this
programme to thousands of
resorts in great holiday
destinations across the
world is definitely the icing
on the cake in terms of
giving them the best value
for their money.”
Although it has two sales
offices in Cyprus and has had
representation at overseas
property events in London,
Blue C’s marketing strategy is
primarily web-based with
their customer base in a
number of diverse overseas
markets, particularly
Scandinavia, Russia, Israel, the
Middle East. Though the UK
market remains a strong
customer base, the financial
crisis has had an undeniable
impact on it.
THE R&E KEY TO
PROPERTY SALES
Through its new Rental &
Exchange (R&E) Programme,
Group RCI, a long-time
innovator in the leisure real
estate industry, provides
property developers with an
attractive option to deal with
the challenges of selling to a
cautious consumer in today’s
unsettled economic climate.
The programme gives
developers of wholly-owned
leisure real estate the ability to
offer their purchasers the
opportunity to put their unused
weeks into the global rental
network of Group RCI’s sister
company, Holiday Cottages
Group, to generate potential
rental income. Purchasers
must deposit a number of
weeks’ usage rights in their
properties into the RCI
exchange programme in return
for the opportunity to select
holidays from the company’s
network of more than 4,000
affiliated resorts worldwide.
To provide developers with
an added tool to boost initial
sales, the R&E Programme
enables affiliates, like Blue C
Developments, to further
attract purchasers by granting
a points allocation which they
can exchange through the RCI
Points exchange programme
for holidays – even while they
await completion of their own
property.
Jonathan Back, managing
director of Group RCI EMEAI,
said: “We’re delighted to
welcome Whiterocks, the first
luxury five-star resort in the
northern part of the island, as
our first European affiliate to
the Group RCI R&E
Programme. As architects,
Blue C Developments has
brought vision and creativity
to the design of Whiterocks
and we’re proud to work with
them.” V
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RCI Ventures, January 2009 29
workV-CityFracs-rb-JP:Layout 1 23/12/08 10:17 Page 2

FRACTIONAL
QUOTE: THE KEYS TO DEVELOPING A SUCCESSFUL URBAN FRACTIONAL
ARE TO MAKE SURE IT’S IN A CITY THAT PEOPLE WANT TO RETURN TO
REGULARLY. STEVE DERING

Ask anyone in real estate what the most important

feature of any property is and they’ll cite the old UPSCALE

DOWNTOWN
maxim ‘location, location, location’. But as fractional
developers in the world’s greatest cities are proving,
the right location is just one factor in creating an
impressive urban fractional, writes SARAH LEE.

AS THE fractional market takes off in Europe, city-based properties are

becoming more and more popular with developers and owners alike.
Urban fractionals aren’t necessarily going to work in just any old city – it
has to be somewhere with international appeal, a global business hub, attract
visitors, come rain or shine and be the type of place people have an enduring
desire to visit and revisit.
Get it right and an urban fractional can prove a winning formula and
attractive investment, as developers in New York, Paris, Dubai and London
reveal in this tale of four cities.

A SLICE OF THE BIG APPLE

New York’s ever increasing property prices and hotel rack rates prompted
Manhattan-based real estate developers Millennium Partners to consider the
fractional product for New York. The company teamed with DCP International
(DCP), which had developed the first equity residence club – the Deer Valley
Club – in 1992, and opened The Phillips Club in 2000.
DCP created an ownership and pricing structure styled on resort-based
equity residence clubs – otherwise known as private residence clubs – for The
Phillips Club. DCP partner Steve Dering explained: “At resort locations we
allow owners to reserve three holidays in advance and additional time on a
space available basis. There is no limit on use so if some owners use the club
less, others can use it more.
“For The Phillips Club we predicted owners would want more spontaneous
use and would visit more frequently than at resorts, but have shorter stays.
Therefore we introduced just one long-lead time reservation and the balance of
use on a space available basis.”
The average stay at The Phillips Club is 4.5 days versus seven
days at DCP’s resorts, while The Phillips Club’s 592 owners
average eight per apartment.
Pricing for a one-eighth one-bedroom apartment is
$225,000. The Phillips Club is now completely sold out and a
second phase – the Phillips Club II – has sold 111 fractional
shares in the past year.
Steve Dering.
“The main differences we found in developing an urban
equity residence club as opposed to a resort-based one is that New York is
frequented more by couples than families,” said Dering. “Therefore the
majority of residences are one-bedroom apartments, whereas in resorts
three-bedroom residences are most common. The other difference is in the
way we tailored the reservation policy to fit urban visitation patterns.
“The keys to developing a successful urban fractional are to make sure it’s in
a city that people want to return to regularly and to craft your owner per
residence ratio and reservation policies to satisfy your market. We also
structured the residence club programme for Palazzo Tornabuoni, a

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30 RCI Ventures, January 2009
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TOP CITIES RIPE FOR FRACTIONAL

PRODUCTS
Our interviewees felt most cities
in the world would have
something to offer the fractional
market, but top of their lists
were:
San Francisco Washington DC
Chicago Madrid
Bangkok Rio de Janeiro
Rome Florence
Barcelona Prague
workV-CityFracs-rb-JP:Layout 1 23/12/08 10:57 Page 4

FRACTIONAL
QUOTE: I’VE FOUND THAT CUSTOMER SERVICE LEVELS IN PARIS ARE NOT AMONG
THE BEST IN THE WORLD, SO I HAVE TAKEN TIME TO FIND GOOD STAFF AND NOW
HAVE MY OWN MANAGEMENT AND MAINTENANCE TEAMS. WALID HALABI

Right: Parisienne elegance

abounds in the Paris Boulevard
de la Tour Maubourg.

Below right: Paris Rue de Nesle

characterises the appeal of the
Paris Residence Club, designed to
attract empty nesters who want
to enjoy the romance of the city.

15th century palace in Florence, Italy,

and, like The Phillips Club, a significant
part of the market comes from the US.
Since US buyers will spend substantial
money and time on travel for each visit,
they want longer stays. Consequently, we
predict US owners at Palazzo Tornabuoni
visit less frequently but will do so for up
to two weeks, so our reservation policies
allow for longer stays.
“Equity residence clubs are
becoming more attractive because
people are buying only what they need
in a place that they love, which fits
perfectly with today’s ‘green’ focus.
Owners at The Phillips Club have a
sense of belonging – they are greeted
by name by staff and there is a pride in
owning real estate in a great Manhattan
neighbourhood.”
The Phillips Clubs’ owners hail from
Florida, California, New York,
Connecticut and New Jersey, and are
aged 55 plus. Dering added: “Direct
mail has been our marketing Paris Residence Club, with his
workhorse. We have it down to a properties in the city’s 6th and 7th
science in terms of list selection, arrondissements and has since sold
response analysis, adding, deleting, one-twelfth fractionals – two fixed
resting and re-charging a wide variety and two floating weeks a year – to
of lists. But it’s also the presentation empty-nesters and families with a
that has made it work so well.” passion for the city of romance.
He said: “Our owners purchase
A PIED-Á-TERRE high-end luxury residences with the
Two years ago Walid Halabi who ran facilities and amenities of an upscale
Paris-based holiday apartment rentals residence club. They get the comforts
set out to identify other business of home with all the services of a fine
opportunities to not only boost his hotel. People come here to get a real
income, but also allow him and his Paris experience. But if they want a
wife Charla to maintain their lifestyle. change we also have a house in
It was following a fractional Provence and a yacht in the South of
conference that he realised the France they can exchange into.
potential his properties afforded him “Location and quality are
to meet both of these goals. important factors in establishing an
First impressions are critical and
The Phillips Club has made sure it He established Paris-Pied-á-Terre urban fractional, but the service levels
creates the right one. Fractional Ownership, now called the are just as critical.

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32 RCI Ventures, January 2009
workV-CityFracs-rb-JP:Layout 1 23/12/08 10:57
Walid Halabi and
wife Charla.
“One of the major challenges with
developing an upscale product in Paris
is sourcing quality management and
maintenance staff. Our owners expect
a certain level of service. I’ve spent 10
years catering to this clientele and am
blessed with fantastic management
and maintenance teams. This is what
sets Paris Residence Club apart.”
Paris Residence Club’s customers
mostly come from the US, Canada and
Mexico and will visit for a minimum
of a week at a time. “They are baby
boomers,” said Halabi. “They have
worked hard at executive level and
want to enjoy their money.
“A mistake people make is in
selling a fractional just as an ideal
product for families. While this is
mostly true of rural areas, a large
number of my owners are empty
nesters who see it as ‘their’ place,
where they can come for a break
without children and grandchildren.”
According to Halabi there is no
seasonality for the Parisienne
fractional, as people will visit the city
year-round, and though his business
has experienced a slow-down with the
current economic pressures, he is still
receiving regular enquiries.
“People who buy fractionals are
not really affected by the current
conditions. In fact this economic
downturn is drawing more attention
to the fractional market as it is seen as
an attractive alternative to wholly-
owned vacation property,” he said.
LONDON CALLING
Toby Pocock is embarking on an
exciting phase in his career, and in
London’s hospitality market. His
company London Fractions is poised to
enter sales on the first of its five
properties and become the first pure
Page 5
London is a city which attracts
visitors all year round, whatever
the weather.
fractional product available in the city.
Up to now, only Grand Residences
by Marriott’s 47 Park Street has graced
London with fractional accommodation
and this, as Pocock points out, is a very
different package to his offering.
He explained: “We are selling 28-day
shares to 12 investors in each of our
properties, so we will be pooling a
small number of investors, thus making
ownership more personal than if you
were to purchase a share in a hotel.
“I spent 10 years working in whole
ownership but could see that the market
was heading towards fractionals.
Although most fractional products are
in traditional resorts, I thought London
was a place where people would want
to spend more than a few days.”
London Fractions has properties in
upmarket areas of the capital – Mayfair
and St James, Knightsbridge and
Belgravia, Marylebone, Westminster and
the South Bank, as well as Tower Bridge
and the City. The company’s research has
shown that properties in these areas rent
for around £3-5,000 a week.
Pocock said: “This is a substantial
amount of money and people don’t like
staying in hotels anyway, as they like to
entertain friends where they are staying
so a fractional makes a good alternative.”
Being the first project of its kind in
London, Pocock is naturally reticent
about divulging too much about the
company’s sales structure, but the
company plans to sell its fractional
product for anything between £70,000
and £300,000, and owners will be able
to visit the property on fortnightly
rotations each year. There will also be
the potential to exchange within the
company’s group of properties.
So far interest in London Fractions
has been good, with most of it coming
from Asia, the Middle and Far East, and
people aged 40-45. “I thought we’d
have a lot of interest from Americans
but this doesn’t seem to be the case so
far,” said Pocock. “Perhaps this is due to
the US being hit more by the credit
crunch than other parts of the world.
“The weather is a less important
influence on urban
fractionals than
traditional resorts. If
guests visit in April and
the weather is bad, it
doesn’t matter as much
as there’s plenty to do in
London. But then our Toby Pocock.
fractional product is aimed more at the
business market than holidaymakers and
this has been reflected somewhat in the
fact that much of our interest has come
from executives, aged 40-45. Around 50
per cent of enquires have come from
people working in banking.”
As with most fractional operations,
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RCI Ventures, January 2009 33
workV-CityFracs-rb-JP:Layout 1 23/12/08
FRACTIONAL
QUOTE: AS DEVELOPERS OF MIXED-USE RESORTS, WE NEED A LOT OF
SPACE AND YOU RARELY GET THAT IN A CITY. DUBAI IS THE EXCEPTION
TO THE RULE BECAUSE IT’S STILL GROWING. KEVIN WASH
Accommodations at
Fairmont Heritage Place
private residence club will
range from two-bedroom
apartments to five-bedroom
villas like the one in this
design image.
London Fractions will provide a
concierge service but it will also offer
owners membership to London clubs.
Pocock explained: “We look to package
entertainment opportunities with our
accommodation, so that our owners
will have all the comforts and
conveniences of home here in London.”
LUXURY AT THE PALM
Dubai has become a byword for
visionary developments and lavish
properties, and IFA Resorts and Hotels’
(IFA) latest project is no exception.
The company is set to open a luxury
private residence club in 2010 as part of
its Kingdom of Sheba mixed-use resort
on the Palm Jumeirah. Fairmont Heritage
Place, Kingdom of Sheba, will comprise
46 accommodations – ranging from
two-bedroom apartments to five-
bedroom homes with swimming pools.
It is situated on a site including 350
private residences, a 150-room Fairmont
Hotel, and a 100-unit shared vacation
ownership club. IFA joined forces with
Fairmont Hotels and Resorts in
developing the club, so owners will be
able to exchange for stays at other
Fairmont resorts and world class hotels
such as The Savoy, London.
Deputy vice president, vacation
ownership, Kevin Wash explained that
Dubai’s first private residence club was
created with discerning clientele in
mind. He said: “We’re offering owners
the space required from a second home
product plus all the services of a
boutique five-star hotel, plus total
flexibility with a reciprocal use
programme so they can stay at any
Fairmont or Raffles hotel worldwide or
alternative Fairmont Heritage Places.
“We have had a lot of interest from
GCC nationals, people from India,
Pakistan and China.”
Entry level properties at the PRC start
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34 RCI Ventures, January 2009
11:06 Page 6
from $400,000 for a four-week
ownership, however IFA is selling just 40
weeks per property to allow owners to
visit whenever they wish. So far IFA has
sold 85 per cent of released inventory –
35 per cent of the total available.
Despite such high levels of interest in
a resort that hasn’t yet opened, IFA has
no plans for another urban PRC. Wash
explained: “We have another PRC,
Zimbali, set to open 40 kilometres north
of Durban, in South Africa. And although
we can see the benefit of urban PRCs
they wouldn’t work with our business
model.
“As developers of mixed-use resorts,
we need a lot of space and you rarely get
that in a city. Dubai is the exception to
the rule because it’s still growing.”
However, for Wash, identifying a city
and developing your resort are just the
first steps to a successful urban fractional.
“You need the sales and marketing
expertise to make the product work,” he
said. “Equally important is to provide the
luxuries of a boutique five-star hotel –
concierge, and quality interiors, as well
as individual services such as giving
owners space to display their own
keepsakes and mementoes.”
Wash agrees that the fractional market
is seeing more challenging times in the
face of the global economic downturn
but he says there are many individuals
who are unaffected, and there will always
be a market for luxury items.
SPOTLIGHT ON CITIES
Group RCI has also identified the
potential in the urban fractional market.
Vice president, business development,
Nick Turner said: “The reasons why
people buy a fractional point to the fact
they’re a great product for cities. They
want to buy in desirable destinations
with year-round appeal and attractions
such as culture, shopping, or in the case
of Dubai, all this plus great beaches.
“Most fractionals purchasers are cash
rich and time poor. They have a high net
worth but it is these people who are
becoming a little more cautious with
their spending.
“In the past people who may only
have used a second home five weeks of
the year could at least see capital growth
in their investment, but the opportunities
for such growth are shrinking along with
property markets in these countries.
“This is making the urban fractional
an increasingly attractive proposition and
we’re expecting more high-end real
estate companies, serviced hotels and
apartments to enter the fractional market
in cities worldwide.”
As an indication of the speed of
development of the urban fractional
sector, Group RCI has established a
dedicated team to work with European
developers to grow their fractional,
destination, or private residence clubs. V
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MEMBER EVENTS

HOST
WITH
THE
MOST
So your members
have bought their
week, exchange
often, pay their
maintenance fees
and offer
favourable
feedback about
your resort. Job
done? Think again,
writes SARAH LEE,
as she explores
how member
events can boost
the events amount to just five C Hannu Mäntyharju, left.
your business. FUN FOR per cent of the net sales.” Owners enjoy an event at
FINNISH HCR events usually
Saariselkä Holiday Club.

HOSTING events for the MEMBERS comprise a weekend stay for

enjoyment of their members
may not top the list of
priorities for resorts dealing
with lots of everyday
activities, but a number of
developers have found that
member events can be a fun,
informative and social
platform for boosting sales
and ensuring customer
loyalty.
Traditionally resorts have
held sales and marketing
events aimed at introducing
potential new members to
their products or getting
members to buy more weeks
and points.
As Hannu Mäntyharju
deputy CEO of Group RCI
affiliate, Holiday Club
Resorts (HCR), explains, this
can be a profitable exercise.
Staff at one of the company’s
recent events achieved a 57
per cent closing rate.
“Our sales figures are
very good from our events,”
says Mäntyharju. “We hold
about 30 a year and sell
more RCI Points to our
owners, as well as gaining
new sales from owners’
friends. Marketing costs for
owners at one of the
company’s 25 resorts in
Finland, Sweden, Russia and
Spain. At a recent event about
200 members attended a
weekend at Holiday Club
Saariselkä – most of them
meeting in Helsinki for a
17-hour coach trip to the
Lapland resort.
Mäntyharju said: “Our
owners really enjoyed this. It
gave them a chance to meet
with friends, talk about their
travel experiences, and to
make plans for the weekend.”
During the weekend HCR
put on day trips to Lake Inari,
the Russian border, the town
of Sami, and a Lappish
museum, as well as a nature
walk and dancing with famous
singers and bands in the
evenings. A sales presentation
of up to two hours and talks
on how owners could make
the most of HCR’s products
were also held.
Mäntyharju said: “During
these talks we’re able to show
owners how to make better
use of our products. They can
also discuss any issues with us
or representatives from Group
RCI, which results in greater
satisfaction with their
purchase.”
Group RCI regional
director, Riitta Apiola, who
attends many of HCR’s events,
said: “This is an opportunity
to meet our members as well.
We inform them about new
things within Group RCI and
help them make better use of
their membership. We also
send their feedback to Group
RCI’s member services.”

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RCI Ventures, January 2009 35
workV-MembEvents2-rb-JP:Layout 1
MEMBER EVENTS
PARTY
WITH
POLARIS
Member events don’t
always have to involve sales
and marketing activities to
be successful.
Spanish holiday home
developer, Polaris World,
recently held a series of
events in the UK purely to
boost the ‘feel good’ factor
among its owners.
One Polaris owner,
Louise Verde, was very
impressed by the Friends of
Polaris event she attended
at Birmingham’s Hyatt
Hotel. She said: “I bought
my Polaris property four
years ago and though
pleased with it, I wasn’t
planning to buy another,
so I was surprised to be
invited to the event, as well
as being told we could take
friends along.”
The night was one of
eight Polaris World hosted
across the UK and included
Spanish food cooked by
chefs flown in from
Murcia, wine local to that
region, a flamenco group
and other performers
entertaining the audience.
Verde said: “On arrival
we were taken to a meet
and greet area and given
champagne and canapés,
while we listened to
Spanish music.
“They then showed us a
short video on Polaris
World resorts, which was
very aspirational and made
us feel proud that we’d
purchased one of their
properties.
“We expected a sales
element to the evening, but
they didn’t try to sell us
anything. It was more about
meeting other owners and
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36 RCI Ventures, January 2009
29/12/08 11:16 Page 4
C Rita Rowe, above, values
the ‘feel-good’ factor of
Polaris World owner events
such as the Friends of
Polaris Event pictured here.
finding out who your
neighbours were. When we
left we were each given an
information pack, complete
with DVD, and an orange
tree to act as a reminder of
our home in the sun.
“After the party my
husband and I couldn’t stop
talking about how special
they made us feel and when
we got home, we watched
the DVD three times. We’ve
told all our friends and
family what a great time we owners for purchasing a World resorts are based,
had and what a good Polaris World property and hence flying in the chef and
company Polaris World is. as a chance for them to performers. Where owners
We have another property meet other owners. may have felt disconnected
in Murcia with another “It was also a chance for from Polaris World because
developer, and although it owners to meet with Polaris of its Spanish base and the
is a bigger property than World staff and pose any cultural differences in
our Polaris World one, we questions they had, in the working practices between
feel so much more positive knowledge their issues Spain and the UK, the
about Polaris World as a would be addressed, if events strengthened
company.” not there and then, the relationships and
Rita Rowe managing following day. When you opened up channels of
director of Mason Williams purchase at a Polaris World communication between
PR agency, which organised resort it can be difficult to the company and owners.
the parties, said no sales meet people so the idea was “It’s difficult to measure
people were present at the to bring owners together to the value of the ‘feel good’
events. create instant friends. factor, but the positive
She explained: “The “We also wanted to word of mouth from these
parties were organised make it a celebration of events is worth untold
purely as a ‘thank you’ to Murcia, where the Polaris millions.”
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MEMBER EVENTS

MEMBERSHIP
VALUE AT
KILCONQUHAR
Increasingly, timeshare
resorts are investing
significantly in strengthening
relationships with their
members through events.
At Kilconquhar Estate and
Country Club in Scotland, a
number of events are held
throughout the year but the
most popular is the annual
dinner and dance.
The event is held over a
weekend just before
Christmas and members pay
to stay at the resort. Most stay
for two or three nights and
participate in a golf
championship and cooking
competitions before the
main dinner and dance. WAYS TO A WINNING EVENT
Around 250 people attend Have a running order and ‘dress rehearsals’ so everyone
each year and the resort knows what’s expected of them.
charges £100 per person for If it’s going to be a sales opportunity, make sure staff are
the weekend stay, including trained and experienced enough to handle tough questions.
the dinner and dance. Make it interesting – perhaps choose a theme.
As the property is Make it ticket only to avoid gatecrashers.
affiliated to Group RCI, If you have ‘giveaways’, employ a mechanism to ensure
representatives of the people can’t just take them.
exchange company also
Be prepared for people to arrive early, and keep them
attend the weekend to deal
entertained so they don’t feel unattended.
with any queries members
C Jim Vance believes there Leave guests feeling happy about the event and they will
have. Group RCI affiliate are many benefits of hosting
members events such as become your ambassadors.
services manager, Marj
the dinner at Kilconquhar Get your staff onboard so everyone understands the benefit
Anderson, said: “These
pictured above. of the event to the company and make sure they have fun.
events offer a fabulous
chance to meet the resort Ensure the information you offer is correct. If you can’t
members to find out what black tie, but most men dress answer a question there and then, get the member a
their needs are and to show in kilts, while the resort lays response as quickly as possible afterwards.
them how our system works. on a five-course meal
That personal attention followed by a Ceilaigh – a turn, ended up buying a “I think members
makes all the difference to Scottish dance, and disco. The timeshare. However, that’s appreciate that we’re trying
them. resort committee members not the purpose of the to offer them more than just
“Kilconquhar has a big can attend so they can meet event. Although it’s a social their annual holiday. Around
development plan underway with owners in an informal event, it has become quite 250 people attend the dinner
and these events also offer a setting, while a member of profitable for us – we made and dance, while 100 attend
chance to manage members’ staff sits at each table. just under £30,000 last our summer barbeque –
expectations and inform Kilconquhar developer year and we have no none of these events entail
them of how the changes are Jim Vance said: “Sometimes marketing costs, as it is so any heavy promotion but
shaping up and how they members will bring their popular people book for members are left feeling that
will affect them.” friends to the dinner and the following year before they get value for their
The dinner and dance is dance and they have, in they leave. membership.” V

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RCI Ventures, January 2009 37
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FINAL CALL
QUOTE: THE REAL WINNERS IN THESE TIMES WILL BE THOSE
DEVELOPERS THAT HAVE THE LIQUIDITY TO ACQUIRE NEWLY-
COMPLETED OR PART-DEVELOPED PROJECTS. RON HOWELL

With everyone feeling the credit crunch bite, RCI Ventures invited
RON HOWELL, sales director with HMC Funding, specialists in consumer
financing for the fractional and timeshare markets, to give his view on
how the shared-vacation ownership industry might fare.

MONEY, MONEY, MONEY

‘‘
EVERYONE in the hospitality industry is
speculating as to how the international
banking crisis and recession will impact the leisure
real estate industry – and particularly the timeshare,
fractional and whole ownership markets – over the
next few years.
I believe that the impact to individual business
during the next two years will largely depend on
where you operate.
Listening to the US president elect talking about
change and defining moments, there is hope for the
timeshare and fractional markets. I feel sure that
we’ll see even more money pumped into the
banking system to kick start lending and underpin
the insurance markets with guarantees, to ensure
the recession is as short as possible for the US.
However, change and that defining moment are
already affecting the US timeshare industry.
Timeshare and fractional sales are classed as address their core 1 tier ratio of funds. This is the
property and any loans are categorised as balance of cash that the banks hold against their
mortgages under the US Real Estate Property loans, mortgages and business loans, meaning
Settlement Act (RESPA). As a result most timeshare there’s still a reasonable supply of third party
developers use Special Purpose Vehicle (SPV) as a funding, though costs have risen as the supply of ABOUT HMC
means of customer financing and to raise funds, funds has diminished. FUNDING
often for ‘pulse customers’ – if they’ve got a pulse, In Europe there are many development projects HMC Funding was founded in
sell to them. that have been abandoned in the current crisis. The 2003 and since that time has
Well, the defining moment is that this method of real winners in these times will be those developers become a leading provider
financing has been terminated and chances of its that have the liquidity to acquire newly-completed or of all types of personal
return are looking slim. part-developed projects. Currently the banks are financing, specialising in
The change we will see is that banks will only holding such projects with no effective solution and I consumer financing in the
want customers with an AAA credit rating. This shift feel sure they would look favourably on a proposition leisure property markets
has already resulted in mass layoffs in the from a timeshare or fractional developer offering to of both fractional and
timeshare industry in places such as Florida, take them off their hands. And with a properly timeshare ownership,
California, Las Vegas and New England. priced product, both fractional and timeshare including cruise products.
In some ways the European timeshare developer products remain a good proposition on an Before joining HMC
is in a much better position to really weather the unsecured loan finance programme. Funding, Ron Howell was a
financial storm and they might even be able to I will close with the thought that in every past senior executive with the
identify opportunities. recession there have been many opportunities for First National Bank.
In Europe many countries have part nationalised those in a position to exploit the deals that are For more information on
their banks, offered financial support in the form of undoubtedly out there. As the old adage goes – HMC Funding, please visit
guarantees, or banks themselves have found www.hmc-funding.co.uk or

’’
timing is everything – particularly in
sovereign state funds from the Middle East to these days of recession. call +44 (0) 1934 751 850

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38 RCI Ventures, January 2009
 “Through the years, Hilton and RCI have enjoyed a great relationship. When we dream big and present ‘what if’ ideas, RCI
always steps up to help us bring our Owners’ vacation experiences to the next level. As a result, our travel advantages
remain unique, flexible and ever-evolving. Our successful collaborations with RCI are based on years of trust, and a shared
commitment to bring dynamic ideas to life. We celebrate RCI’s 35th Anniversary and look forward to the innovations ahead!”

Kim Robert Kreiger

Senior Vice President and Chief Club Officer, Hilton Grand Vacations
RCI Affiliate since 1993

With 35 years of experience, more than 4,000 affiliated resorts worldwide and over 3.7 million members,
we continue to be the global leader in vacation exchange. We are committed to bringing the highest level of
reliability, customer service and innovation to every developer relationship so that you can achieve your goals in
shared ownership. Because after all… your success is our success.

For more information, please contact: Amanda White on +44 (0)1536 314 651.

RCI and related marks are registered trademarks and/or service marks in the United States and internationally. All rights reserved.
©2009 RCI, LLC. All rights reserved.

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