How best to acquire vacation ownership has for a long time been a bone of contention.
Over the past decade or two, various models have been developed by property developers to sell vacation and leisure products in a growing market. The focus was on innovative pricing structures and hard-sell tactics, which not always served the best interests of the consumer. Timeshare salespeople earned huge commissions and had no or very little annuity responsibilities to the client. Some unscrupulous sales agents made unrealistic promises, which hurt an industry which in essence offers great vacation opportunities.
The meltdown of the industry was as a result of the above - obviously compounded by the global economic situation. As in many other industries, this situation created a new dispensation and opportunities. The growth and emergence of exciting new products such as fractional ownership of aspirational assets and experience-based vacation ownership are presenting attractive buying options for the consumer. Another aspect adding value for buyers is the globalisation of offerings. Online communications are now readily available, establishing information platforms not previously available to the consumer.
Various market surveys indicate a clear shift to experience-based vacations – living the story, not just looking at the photos. Creating ‘vacation brands’ is a move towards brands offering excellent locations, luxury facilities, sound value propositions, high-level supporting hospitality service levels, and above all - aspirational experiences. Bland brands are of no interest to new-generation consumers. Some of the multinational role-players are offering excellent products, underpinned by efficient administration backbones. Mixed-use developments are becoming the norm in the hotel industry. Companies such as Interval International provide credible global vacation exchange options in association with the developers.
The economic crisis is fuelling the evolution of more and better options. The sales processes are also undergoing a shake-up. The promise-maker and the promise-keeper should be integrated and speak as one; on-site presentations have become the norm, where consumers can have a thorough understanding of what they are buying into.
Some discerning consumers desire more intimate and unique vacation experiences, which opens the door for smaller vacation providers to find a special niche. These destinations are usually not able to offer economy-of-scale vacation ownership benefits without losing their identity in mergers or corporate agreements. Affiliation with credible global exchange service providers is difficult to achieve, member services are limited, value-added advantages not competitive, with a lack of industry training, non-comprehensive communication of vacation ownership news and access to industry soundboards difficult to sustain.
To some extent South Africa is not different from the rest of the world in this respect, but as an emerging market we do offer exciting green field opportunities. The eyes of the world are slowly focusing on South Africa as the gateway to Africa and the 2010 World Cup is adding additional incentive for developers as well as consumers to ‘get into’ the country.
The Zorgvliet Group started to research vacation ownership in August 2007, the objective being to develop a business based on multi-destination niche products under one umbrella. At that stage the Group had already developed a number of properties – five-star game and safari offerings, various inland leisure resorts and a unique wine and vineyard vacation concept - and established a sound hospitality backbone. The research brought to the fore key success factors and consumer hot buttons. We got very excited when we saw that our strategy of developing experience-based offerings is the essence of many successful Private Residence Clubs. We were not selling dreams that still have to be constructed, and can convey to consumers that we have faith in our product strategy - having first developed and then selling gives us an additional edge in the market.
Development of the various properties started in 2002 with rebuilding of the 1692 Zorgvliet Estate in the Banhoek Valley outside Stellenbosch. Surrounded by mountains and rich in South African history, the platform was set to create something very special. Vineyards were planted, a state of the art cellar has been constructed, an old manorhouse dating from 1692 restored as an authentic Banhoek Valley restaurant, the Zorgvliet Boutique Hotel constructed and a range of leisure facilities developed. The Zorgvliet brand evolved around the promise of ‘special experiences for special people’, and Zorgvliet wines are regarded as some of the best in South Africa. Vineyard holidays were established where guests can get involved in the total chain of viticulture activities and wine-making. Plus - members of the Zorgvliet Private Residence Club (ZPRC) get 24 bottles of award- winning Zorgvliet wine per year with a personalised wine label!
Developing Ka’Ingo Private Game Reserve in the malaria-free bushveld as a part of the ZPRC has taken shared vacation ownership to a new level. Three five-star safari camps in this privately owned big five reserve created various accommodation offerings for ZPRC members - from Dinkweng’s three-bedroom self-catering lodges and Ka’Ingo’s main camp luxury rooms with Ka’Ingo restaurant and extended leisure area to the River Camp overlooking the Mokolo River. Traversing a 16 000 hectare nature reserve where elephant, lion, leopard, cheetah, white rhino, buffalo and antelope roam flat savannah grasslands bordering the Mokolo River, rolling hills and breathtaking gorges, Ka’Ingo Private Game Reserve is the epitome of wild life conservation. Members of the ZPRC can participate in the various conservation projects if they wish or just learn more about the activities from the professional game rangers. Daily game drives, rock art excursions and other activities all support this unique experience vacation destination. Zorgvliet Portfolio was further extended to include inland resorts such as the Riviera on Vaal Hotel and Country Club outside Johannesburg and Protea King George Hotel on the Southern Cape Garden Route.
The ZPRC club structure was subsequently developed incorporating all the elements of a multi-destination, niche experience-based private residence club. In order to address the need for total flexibility the usage is on a floating booking system with minimum usage restrictions. The model pivots on hospitality agreements with the operating entities at the various destinations. By not selling more than 50% of the time, members are ensured of adequate inventory availability. ZPRC was affiliated to Interval International, securing global exchange opportunities through Interval’s unique programmes. ZPRC members can benefit from the Request First or Deposit First options, Getaway offers where members can buy additional global vacations from R2500 per week and various special offerings only available to Interval members. The company is market-driven and has developed vacation options including perpetual ownership and concessionary usage products secured by a registered rental deed from R72 000 per week per year. The ZPRC brand is being acknowledged internationally as a unique model for smaller experience-driven vacation developers.
Since the international introduction of the ZPRC we have received many requests from parties interested in pursuing alliances as well as the related investment opportunities. Parties showing interest are from Bulgaria, the USA, UK, Germany and Mozambique. ZPRC is structured to accommodate similar products and developments; in addition, potential investors are invited to participate in the equity base of the company and new developments.
Interest in South African properties and investment opportunities is constantly growing, and the Zorgvliet Group is well positioned to capitalise on this. The company is family-owned with low gearing, and well positioned to optimise on the 2010 World Cup focus. The ZPRC is currently driving a project on the back of the World Cup event aimed at ongoing relationships with the soccer tourists, offering vacation ownership with guaranteed accommodation over the event.
Contact Mac van der Merwe at summercourt@mweb.co.za.
Owners Perspective Magazine Confirms Global Distribution Deal For British Airways Airport Lounges
Luxury fractional ownership and timeshare magazine significantly extends affluent reach by securing a distribution deal for BA airport lounges worldwide. Owners Perspective Magazine which focuses on all aspects of vacation property ownership and luxury travel has now added more than 100 British Airways airport lounges to its global distribution campaign enabling it to be read by large numbers of affluent first class and business class passengers. With so many magazine titles available around the world, we are delighted that British Airways have selected our consumer publication for customers in their lounges across the globe which will help us to educate even more people on the benefits of shared ownership products and all the luxuries associated with the more modern product types. Says Paul Mattimoe, CEO, Perspective International Ltd. Owners Perspective Magazine offers an independent look at resort real estate, fractional property ownership, high end timeshares, private residence clubs, boutique hotels and luxury travel services, providing print and online reviews, buying guides, advice, hints and tips. Available by individual print subscription (as well as free of charge online), and via leading UK Tesco & Sainsbury's supermarkets, selected Macdonald Hotels & Resorts and Virgin Atlantic, American Airlines, Emirates Airlines and British Airways airport lounges around the world. For more information visit http://www.ownersperspective.com For details on advertising and editorial opportunities visit http://www.perspectiverates.com
Zorgvliet Private Residence Club recently entertained UK and local journalists at Ka'Ingo Private Reserve in the Waterberg. Here British travel writer and photographer Ron Toft gets to experience what few people ever will the weight of a lion's paw. Ka'Ingo General Manager Nick Callichy, left, is replacing the darted lion's transmitter collar. This type of conservation-related activity is just one of the many really special experiences that the ZPRC offers its members.
CEO of Zorgvliet Group calls for creation of sustainable tourism from 2010 rather than short-sighted profit grabbing.
Human Settlements Minister Tokyo Sekwale has appealed to South Africans to help leverage 2010 for sustainable tourism growth in the future the so-called Barcelona Effect. Zorgvliet CEO Mac van der Merwe feels very strongly that the 2010 Fifa World Cup should not be treated as a 30-day cash cow which happened in Athens over the 2004 Olympics, with exorbitant prices which effectively killed the goose that laid the golden egg. Rather, he calls for a cutting off non-value-adding costs and middle men in order to offer great value and experiences which will build Brand SA for years to come.
Football fans and media from over the world will flock to South Africa in less than a year's time to experience one of the paramount sporting events ever to be hosted in Africa. The greatest challenge for all South Africans is creating a lasting positive legacy from the event. The balance between experiences and prices will be of paramount importance in terms of lasting perceptions of value.
Even at this stage it is obvious that there will not be enough accommodation available in South Africa over the 2010 Football World Cup period. As a result, prices will increase to (in some cases) outrageously high levels. Pressure is mounting for the suppliers of accommodation to keep prices down - but one of the biggest problems in the pricing chain is the middle men who milk the situation without adding comparative value. Converting soccer fans to Brand SA ambassadors will be a function of not only realistic accommodation prices, but exposure to South African holiday experiences. Fewer parties adding commission (which increases the price to the consumer), broadening the experiences of visitors and offering attractive inducements to revisit South Africa on a regular basis are all elements of a sustainable tourism legacy.
Zorgvliet Private Residence Club (ZPRC) is a subsidiary of the Zorgvliet Portfolio and is promoting an integrated approach towards the 2010 World Cup. ZPRC is a vacation ownership company offering a range of pristine resorts in desirable and key locations, and through an aggressive media campaign in the UK and Ireland is creating awareness of the special experiences, value propositions and opportunities for lasting vacation options. Making use of the Groups in-house travel agencies in the UK shortens the chain and number of entities which could add to the final cost of accommodation and offerings. ZPRC is making attractive and unique shared vacation options available in resorts ranging from game reserves to inland resorts and wine farms - all mixed-use operations with strong hospitality support.
The ZPRC campaign in the UK and Ireland is aimed at optimising the 2010 window of opportunity by selling shared ownership vacations for an extended period at aggressive prices supported by a wide range of authentic South African experiences. Members can book for the owned usage periods at the different destinations during the World Cup, thus benefiting from the unique vacation investment during this period and beyond. For example, ZPRC shared vacation products are available from R72 000 per week per year for a 12-year concessionary option at the Ka'Ingo private game reserve main lodge in the Waterberg. Buying vacation ownership for a concession period or as a fraction in perpetuity makes a lot of sense, especially if the arbitrage position is taken into account - where you buy at ZPRC and can exchange to a higher 'priced' unit through their alliance with Interval International (e.g. buying in SA (Ka'Ingo) for R72 000 and exchanging for a week at a destination where the cost is three times that). South Africa offers an extremely attractive value proposition. Vacations bought in the ZPRC can be exchanged at more than 2000 global resorts affiliated to Interval International.
Our belief is that reasonable pricing must be maintained by cutting non-value-adding costs, broadening experiences offered to the visitors, and creating relationships that will ensure that visitors perceive South Africa as a top-of-mind destination.
Rebrand for European Timeshare Organization Source: Opp.org.uk After 11 years in existence, industry trade-body the Organisation for Timeshare in Europe (OTE)
After 11 years in existence, industry trade-body the Organisation for Timeshare in Europe (OTE) has changed its name to the Resort Development Organisation (RDO), which it says is reflective of “developments in the vacation ownership industry” that have brought about new forms of ownership.
Citing the emergence of floating weeks, points-based holiday systems, fractional ownership, private residence and destination clubs, RDO said that it has also established a fractional committee to examine how the non-profit organization can deliver value to its members, while launching a consumer portal for its members to list on called gotimeshare.org.
“Under RDO, the free complaints resolution service and dispute resolution scheme will be opened up to more people,” said its chairman, Richard McIntosh. “The level of complaints for timeshare is at a very low level and is decreasing year on year, which compares starkly with other holiday options, such as holiday clubs, or discount travel clubs, which are not governed by specific legislation and do not benefit from trade body representation.”
To ensure this continues, RDO is undertaking a market survey of fractional resorts and residence clubs in Europe which its legislative council will then look at how to see how they fit within the EU’s Timeshare Directive which, it believes, the majority will need to comply with.
McIntosh added: “I believe that RDO truly reflects the extensive range of holiday options now available in the vacation ownership market. By widening the scope of the organisation’s membership, we are representing the industry as a whole rather than just focusing on timeshare.
The RDO is a trade body dedicated to fair-trading in the European vacation ownership industry, whilst promoting and fostering industry growth. It serves its 110+ membership through public relations, legislative lobbying, research and member and consumer relations management.
Interest in fractional remains, with a trend towards smaller bites of the cake
Interest in fractional remains, with a trend towards smaller bites of the cake
Dirk Wilson of fractionalownership.co.za says they have been evaluating consumer behaviour and Internet browsing patterns across all six websites in The Fractional Network that provide exposure for fractional ownership properties, i.e. fractionalownership.co.za, The Property Magazine: PropertyGenie.co.za, Realestateweb.co.za, SundayTimesProperty.co.za and iafrica.com. A few trends were discovered.
It was found that general interest in ‘fractions’ is on the increase. “Month on month we are seeing higher numbers of unique visitors (separate individuals) entering our fractional ownership pages across all websites in The Fractional Network, which is now averaging 7000 - 9000 unique visitors per month. Encouraging news is that this number is continually rising as the products are exposed to more people. The number of visitors for the UK, USA and Canada is on the rise, we are finding that they are really looking at many resorts as the number of separate pages viewed during each person’s visit to our websites is also increasing to about 5 pages per visit.
Wilson says that it can be assumed that consumers are genuinely interested in the fractional model and are shopping around to compare the three L’s – which are Location, Leisure amenities and Luxury. In terms of price, he says that now more than ever before, fractional investors are seeking as many value-added benefits as they can, at the best possible price. “Fractional investors are willing to pay less for the privilege of owning smaller blocks of time; subsequently, fractional promoters are releasing products that offer smaller (more flexible) usage periods in luxury fractional residences. Investors now have the option of purchasing 2 weeks as opposed to 4 weeks, naturally at a lower price per share. More promoters are offering 7, 14, 21 and 28 days’ usage per annum. Down the line fractional owners will be able to upgrade by purchasing more time in the same residence or resort, or in another resort offered by another promoter.
“It appears that the general consumer perception of a fractional ownership purchase is one of a direct real estate investment with lifestyle benefits such as usage, exchange and formal resale (or exit) agreements. Most consumers are also seeking substantial rental returns on unused time.
Wilson says that although consumer interest is increasing, sales conversions are down, which he attributes to a number of factors, including fractional promoters withdrawing or advertising less, general uncertainty about investing in real estate due to economic pressures, lack of cash or access to specialised lending, as well as confusion between shared vacation ownership purchase options (timeshare, fractional, condos, private residence, membership, destination and points clubs)
He says the landscape for fractional promoters is set to change through their adoption of a shared ownership body, as in the US market with ARDA (the American Resorts Development Association).and Europe with the RDO (Resort Development Organization) The newly formed Vacation Ownership Association of South Africa (VOASA) now encompasses the various vacation ownership products (such as timeshare, fractional ownership and private residence clubs) under one umbrella organisation. “We think that consumers will now be more well informed as to the different shared ownership products available to them, and how they vary from one another. VOASA will take a major role in assisting and supporting the public here. This is timely, since another trend is that more and more resorts are offering timeshare, private residences, fractional, condos and whole ownership products, all on one site and managed by one hospitality operator.”
Contact Dirk Wilson on email dirk@fractionalownership.co.za; visit www.fractionalownership.co.za
