Monday, May 15, 2006


Middle East Tourism - The New Timeshare Real Estate Maker

New Horizons in Shared Ownership, a symposium held April 28-29, at the Burj Al Arab in Dubai, offered startling statistics on the profile, demographics and implications for mixed-use real estate in the timeshare and self-catered market. Conducted by RCI Middle East, part of RCI Global Vacation Network, and specialized industry consultant, Ragatz Associates, the Symposium portrayed the opinions of a sample of nationals from Saudi Arabia, Kuwait, the United Arab Emirates, Iran and Egypt.

Complemented by fieldwork in face-to-face interviews by Pan Arab Research Centre (PARC) across 1,000 high-earning nationals in Dubai, Abu Dhabi, Fujairah, Ras Al Kaimah, Oman, Qatar, Egypt, Lebanon, Jordan, MacKay and Madinah, results were analyzed and evaluated by NorthCourse Advisory Services.

RCI wanted to advise developers before the design process begins on issues pertaining to likely market sources, types and size of preferred accommodations, range of amenities and acceptable pricing ranges. In combination with the original data, syndicated and secondary research, Vivienne Noyes-Thomas, managing director of RCI Middle East, states: "The main purpose of the research is to quantify the potential pan-Arab market for luxury timeshare, fractional ownership and other types of shared ownership in leisure developments in the region. There are numerous superb projects in the planning stages, but now we can qualify what the consumer is really looking for and what this product can deliver in increased returns for developers and operators."

The following results were publicly announced at the Symposium:

The entire sample travels regularly

Destinations chosen for leisure travel are selected for choice as a "family solution" rather than activity or adventure travel.

Shopping is the principal activity.

Food and dining are high on the list, with dining preferable in the vacation home and prepared by a Halal certified purveyor.

40% of Saudi Arabians take household staff with them on trips; 46% of UAE travelers take their parents.

Length of stay is two-three months three times per year.

Travel is definitely a "group" experience.

Dubai and UAE are most popular destinations for timeshare purchase at this time.

The Middle Eastern market can support USD$540 million in timeshare sales while the fractional market is a preference for Dubai, Sharm El Sheikh and Makkah

There's a new trend of religious timeshare in the Islamic centers of Makkah and Madinah as these destinations are popular for Muslim pilgrims.

Fractional ownership embraces exclusive villas, yachts and luxury apartments.

There is a regional preference for "staying close to home", i.e., within "the kingdom".

Shared ownership is compatible with the Muslim concept of "Sukok" (a property document or deed which is transferable and entirely conforms with the Islamic laws of Saudi Arabia and the Gulf). Vivienne Noyes-Thomas, managing director for RCI Middle East, states: "Sukok gives Muslims complete confidence in the knowledge that what they're buying into is safe and acceptable. The new Le Meridien Towers, an RCI affiliate, and the Zamzam Towers projects are positioning their marketing around this concept."

Parallel with the demographic and psychographic profiles illustrated in the Symposium, regulations are being developed to address investor and owner concerns. Dubai's Department of Economic Development (DED) is expected to announce detailed regulations in the near future. RCI has been instrumental in establishing a Regulatory Working Group to provide input and commentary on the draft laws from the perspective of timeshare industry experts. Included among the Group's work is a compilation of "best practices" from the American Resort Development Association (ARDA), Organisation for Timeshare in Europe (OTE) and the Timeshare Industry of South Africa (TISA).

Outside of the UAE, Egypt and Lebanon also have regulations that govern how shared ownership is structured and there are regulations in place in Kuwait and Saudi Arabia governing sales practices. RCI predicts once the UAE Law is enacted, it will be adopted as a minimum standard through the GCC. Implementing regulations and a sound Code of Ethics will eliminate some of the negative experiences associated with the industry outside the Gulf.

Dubai International Airport handles over 20 million passengers annually. This number is expected to increase to 50 million + upon completion of the new terminal. The climate, atmosphere and great shopping are all attractive to visitors from within the Middle East and internationally. To date, with the Gulf region, construction exceeds USD$1 trillion according to MEED reports. Within Saudi Arabia, the value of new projects has doubled to more than USD$200 billion in the last 12 months.
Stephen Holmes, Vice Chairman of Cendant Corporation talking with Awadh Al Ketbhi, Director of Conventions at Dubai's Department of Tourism and Commerce Marketing.

More than 30,000 owners of timeshares are from this region with the majority of these owners from Egypt. Out of the 30,000 timeshare owners, over 20% of Gulf Arabs own property outside the region, with popular destinations including Marbella, Orlando and London.

Kuwaitis based IFA Hotels and Resorts are developing projects in Dubai, including a site on the prestigious The Palm Jumeirah and a condo-hotel project managed by Movenpick that offers an opportunity to buy a hotel suite with personal use and future rental income offers another alternative. A large resort is planned in Festival City and other projects are being developed in Dubailand with mixed-use developments in Oman and Qatar.

Around the world, the shared ownership business has recently enjoyed the endorsement by major brands, and global luxury chains such as Hilton, Sol Melia, Marriott, Ritz Carlton, Sheraton and Four Seasons. These brands have embraced the timeshare opportunity which, until recently, had been driven by individual resort developers. This global trend-embracing properties in the USA, Mexico, Egypt and the Caribbean across the world to the Far East-assures continued momentum.

This Symposium is viewed as having accomplished twin goals: assisting market entry for developers by sharing studies and supporting legislation, which will minimize current obstacles while addressing the current lack of consumer information.

Experts believe that Dubai possess most of the key drivers to make shared ownership and the self-catering holiday industry a guaranteed triumph. Noyes-Thomas concludes: "Excellent infrastructure, sophisticated tourist attractions and quality property developments are great foundations for success."

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