Timeshare vs hotels

New legislation has seen a number of timeshare developments get off the starting block this year. But what does this mean for existing hotel operators? Sarah Campbell looks at the upcoming resort projects and how this could impact hotel profits in new ‘timeshare friendly' destinations.

Since announcing a water-tight legal framework for the sales and operation of timeshare resorts in March, Dubai's timeshare market has come forward in leaps and bounds as new operators now enter the market buoyed with optimism and confidence.

The regulation, launched on March 12 at the Vacation Ownership Investment Conference (VOIC), hosted by Interval International in Dubai, is enforced by the Dubai Real Estate Regulatory Authority (RERA), and covers timeshare schemes offered, marketed or located in the emirate of Dubai.

It is a move welcomed by those involved in the industry, and one that looks to be duplicated in other leading tourism markets, including Abu Dhabi.

"The new regulations have been drafted to provide consumer protection while allowing the industry to grow and flourish. The regulations represent a merger of the practices from other regions and Dubai's existing practices and laws. In many ways they reflect the vision of Dubai's Government in building for the future using the best available to achieve that growth.

Because of that, a marketplace has been created which should hold a very bright future for the shared ownership industry," says David Clifton, managing director for Europe, Middle East and Africa at Interval International.

According to Group RCI managing director Middle East Nick Turner a number of developers and hotel management companies have been waiting for timeshare to be recognised by the Dubai authorities before committing any research or development capital into this area.

"Group RCI has now engaged with a number of large regional and international developers to support future timeshare developments, from feasibility studies through to assisting a developer finalise their timeshare product and prepare to take to market in Europe and the Middle East," Turner says.

Developers too have also welcomed the new regulations.

"The legislation will open the gates and lay a solid framework for a successful timeshare industry. RERA's cautious approach will ultimately lead to greater confidence in the timeshare market both in terms of attracting legitimate business investment as well as individuals looking to holiday in the UAE and invest in the property market at the same time," says Chris Jackson, general manager, Emerald Vacation Group.

Resort developments

Since the RERA regulations came into effect there has been a barrage of new timeshare developers and resort operators looking at the market, with numerous new developments being launched.

Emerald Vacation Group currently has two properties under construction, due for completion in 2009; Emerald Court situated in the heart of Dubai (Al Barsha) and Turtle Cove located in the Northern Huvadhu Atoll of the Maldives.

"As we are a Dubai-owned and based company, it is no surprise that our first venture would be in Dubai. Emerald Court is the company's first vacation ownership property and was systematically chosen for its excellent location. The property is within walking distance of the Mall of the Emirates and the new Dubai Metro, among many other attractions, making it easy for people to access tourism and business destinations in the city," says Jackson.

Marriott Vacation Club International (MVCI) was also quick off the block, announcing its long awaited resort development at Dubai Festival City in April.

In a joint venture with Al Futtaim Group, the company expects to open a 320-unit MVCI resort by 2011 in Dubai Festival City. The resort will be MVCI's first venture in the Middle East, and the company's largest resort outside North America.

The proposed 320 two-bedroom and three-bedroom unit resort will be located in Dubai Festival City's elegantly chic, bustling waterfront urban community. The timeshare resort will be constructed in four phases along the Dubai Creek.

"We are in the very early stages of design at this point," points out Edward Kinney, vice president, corporate affairs and brand awareness, MVCI and The Ritz Carlton Club.

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