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Sun 17 Feb 2008 04:00 AM

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Group RCI: time for some action

The time has come for action on Dubai's timeshare laws, industry experts say, with developers and hoteliers queuing up for timeshare developments and fractional ownership products.

The time has come for action on Dubai's timeshare laws, industry experts say, with developers and hoteliers queuing up for timeshare developments and fractional ownership products.

And with the dark clouds of recession looming on the horizon, the timing couldn't be better to introduce "recession proof" hospitality products, according to RCI Middle East managing director Nick Turner.

Speaking to Hotelier Investor at the Tourism Development Projects and Investment Market last month Turner said his company had "several highly respected developers and hoteliers who are looking to launch projects in the region in the first quarter".

"It's important that all the appropriate legislation is in place before these developers start to sell," he said.

"We had the luxury of time in 2006 and 2007, but now there are real tangible projects that are coming out of the ground in tourism destinations like The Palm, Dubai Marina and Dubailand, where we believe it is necessary now for the government to publish the legislation, and obviously to provide licenses to developers."

With the possibility of a US-lead global recession on the horizon, timeshare and fractional ownership products had a proven performance during previous economic downturns, Turner added.

"It's recession proof: if people hand over their cheque today and there is a recession tomorrow they have pretty much guaranteed they will come to Dubai regardless of what happens in terms of conflicts or economic issues," he explained.

"We think there are going to be tough times in the next five years, the industry is worth about US $10 billion in timeshare, and US $2 billion in fractionals, and it has seen uninterrupted growth for the last decade through conflicts, unrest, and global incidents."

Timeshare and fractional ownership could also generate cash flow during construction and soft-opening periods, Turner added.

"We believe in this part of the world, with the right location a hotel could go on sale 18 months before it opens its doors if the property has a strong location and a strong brand behind it, like a Hilton," he said.

"You can understand why hoteliers are so keen on it, because it generates cash flow today and stimulates occupancy for the next 10 to 20 years."

RCI has been one of a number of companies spearheading a working group into the proposed legislation on behalf of the Dubai government.

Turner said the resulting document "not only protects the consumer but also the developer, and ultimately the brand and destination of Dubai to ensure that what is sold and marketed is delivered, and the products are approved and backed by the Dubai government".

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