APRIL 2010 | www.opp.org.uk
WORDS | Alex Evans
Lessons from Timeshare | 57
Tame the elephant
Some in the fractional industry are realising that by embracing the positive aspects of timeshare, and educating consumers about its benefi ts, they can sell more fractions
The elephant in the room at the Fractional Summit in February was timeshare, and
for some this merely emphasised the immaturity of an industry still trying to establish itself in Europe. “It was a little disappointing to still hear delegates and speakers agonising over how they can either diff erentiate or totally disassociate the fractional product from timeshare,” said Paul Gardner-Bougaard, chief executive of FSOTA. “In its last survey conducted by Nottingham University’s Business School, published last year, the European timeshare industry was
generating some €1.6 billion a year in revenues, had 1.3 million families owning timeshare in some 1,300 resorts (of which 500,000 lived in the UK) and a customer satisfaction rating of over 82%. “It should also not be forgotten
that some of the biggest names in the hospitality industry in Europe - such as Hilton, Marriott, Sol Melia and Pestana - are involved in the timeshare industry, whilst worldwide you need to add names such as Disney and Starwood.” Also representing the Resort
Development Organisation (RDO),
which is largely made up of timeshare companies, Gardner-Bougaard is keen to focus on the positive lessons from timeshare as he feels the RDO and EU regulation have eff ectively addressed the legacy of mis-selling in the 80s and 90s. “The big advantage the fractional
industry has compared with the timeshare industry is that because RDO is providing the Secretariat for FSOTA, the new trade association is aware of the mistakes made in the early years of the timeshare industry and can and will benefi t from that past experience,” he adds. “The most important objective for the fractional industry in 2010 is to speak to its European market with a unifi ed voice and with an agreed message.”
Sing from the same sheet
But the fractional industry is still struggling with that agreed message, and the media is still confused by the numerous forms of shared ownership
referred to under the fractional umbrella. Yet timeshare was, and still is, successful because it’s a simple concept and model that has obvious appeal. “From the developer’s perspective, timeshare was a great model in the 70s as a way to commercialise lots of inventory after the crash,” recalls Nick Turner, head of new business Europe at The Registry Collection. “It was a good low cost model that enjoyed 10 years of success before mis-selling and pressurised sales, particularly in the Canaries, gave it a bad name – too many promises based on fantasy.” The leisure real estate industry now
fi nds itself in a similar market, with a lot of inventory coming on stream, and fractional has it all to play for, says Turner. “The lessons to be learned from timeshare are for developers to ensure it has a robust legal structure and to exercise close control over the sales and marketing messages and
The two big issues with timeshare are the lack of resale and rising maintenance fees, problems that apply just as much to fractional. The solution to both is to tap into the short-term fractional market..
Lisa Migani, FNTC
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