By Safura Rahimi

The Middle East market is set to sell over $1 billion (Dh3.67bn) annually in vacation exchange products by 2010, according to estimates by Group RCI, the world’s largest vacation exchange and rental business. The group, which has played a major role in working with the Dubai Government to set up new regulation frameworks for the timeshare industry, says that legislation has been the catalyst for growth in the region’s vacation exchange market.

Group RCI’s managing director for the Middle East, Nick Turner, sat down with Emirates Business to discuss timeshare plans for Dubai, the challenges facing introduction of this new industry, and what took the firm so long to tap into the emirate’s booming tourism market.

What are some of the plans Group RCI has in store for Dubai, and how much are you planning to invest here?
I can’t provide financials but we have three core objectives in the region. Number one is to help governments establish frameworks for legislation, which we have already done with the Dubai Government. We’re also actively supporting Oman and we expect the rest of the emirates will follow Dubai’s lead with the timeshare legislation.

Number two, we’re working with the majority of large regional developers and hotel brands, discussing opportunities to incorporate shared ownership into their mixed-use projects, and giving them the tools and advisory services to actually start integrating in vacation ownership – which is also known as timeshare – in fractionals, and in buy-to-use-and-let real estate (having a furnished residential offering that is owned by somebody overseas and rented through a central rental pool). Number three is supporting the customer. When timeshare vacation ownership customers stay in these parts we have a good range of products available from three-star to five-star. This is a new market so it is going to take upto four years to actually see some of these new projects appear in Dubai but our responsibility does not end when the project finishes construction, that is when we look after the customer experience.

Dubai has been a major hub for tourism and holidays in the region – what took RCI so long to tap into this market, and why now?
We moved our regional head office for the Mena region from Cairo to Dubai in 2003. We took a strategic decision – we knew the majority of investment was coming into the UAE. However, the catalyst for growth has been legislation. A lot of hoteliers and developers have been interested in shared ownership during 2006 and 2007, but the majority of them wanted to see the legal requirements – how to build, how to sell, how to market. And I think you will see a very quick transformation now in the geography of the region and timeshare.

Nakheel and Emaar are looking to include timeshare into their portfolios; can you tell us more about that, as well as which other developers have come forward?
Strategically it is difficult to give a definitive answer as to which developers are looking at this. But certainly if you look at the major developers – in projects such as Dubailand, where they are setting up an LLC purely for vacation ownership, and projects that Nakheel are developing that are tourism-related – you can see shared ownership would fit very comfortably into their product offering.

The majority of major developers in the Gulf are looking at, considering, or have already started moving down and offering products for timeshare vacation ownership and fractionals. IFA is a great example, where they have already started sale with their fractional proposition on the Palm Jumeirah.

What per cent of the Dubai property market would this comprise in the next year?
We hear talk of several hundred thousand residential units being built in Dubai. I would certainly say timeshare and vacation ownership could support several thousand units in a mature market. When Dubai is driving 15 million inbound tourists a year, realistically 10-15 per cent of that inbound tourist population could be staying in some form of apartment, villa, rental or timeshare. This is a big number.

What is the potential value of the Dubai timeshare property market in five years or so?
We’re looking at a $1 billion plus market potential in annual sales when this market matures in five years onwards. We have carried out some research in the big-five Middle Eastern household markets – Saudi Arabia, Kuwait, UAE, Egypt and Iran. We asked, would you be interested in buying timeshare (a vacation purchase), or a fraction, which is asset-linked? The number one destination for both, reassuringly, was Dubai. One in four respondents suggested Dubai (for timeshare), followed by Makkah, which is quite interesting from a religious travel perspective. And then there were some traditional locations in timeshare like Sharm El Sheikh. Fractionals, because they are asset-linked, showed a slight change, with more of a desire to own in places such as Abu Dhabi.

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