Vacational ownership opening many Dubai doors
RESORT Condominiums International (RCI) Middle East’s managing director Nick Turner believes the time is right for timeshare.
So too does David Clifton, Interval International’s managing director for EMEA and Asia, the driver of the Vacation Ownership Investment Conference (VOIC) held last month in Dubai.
Dubailand Vacations have introduce timeshare developments within Dubailand, Al Futtaim Group and Marriott International have said that they will establish Marriott Vacation Club at the Dubai Festival City - the first Marriott Vacation Club resort in the Middle East - and the largest outside North America - and Starwood vacation club, Hyatt vacation club and Westgate resorts are among major players who have shown growing interest.
As chairman and CEO of Arabian Falcon Holidays, a Dubai based vacation ownership service provider says, “Vacation ownership will open the doors to a whole new class of buyers who want to holiday in Dubai and want a piece of the property market, but don't want to stay here all year. Furthermore the introduction of regulations will enable this to come to life which is been approved and soon to be released by Dubai government.”
Jason Tremblay, president, CEO and co-founder of Sell My Timeshare NOW, a global leader in connecting timeshare buyers, sellers, and renters says, “Dubai has aggressively committed to becoming a global destination for luxury vacations and tourism, yet has embraced timeshare real estate in a cautious and deliberate manner.
“Dubai is in the enviable position of being able to observe the smart moves and the errors made by other countries in regulating timeshare sales and timeshare re-sales and avoid mistakes others have made in the past,” he continued.
“People who want to buy timeshare or who are already timeshare owners should keep their eye on timeshare sales in Dubai…it could easily become one of the world’s top timeshare vacation destinations in the near future.”
Turner explains what it can offer property developers and investors. Research conducted by RCI has indicated that residents within the Middle East will spend an estimated $1.2 billion each year on shared ownership properties by 2020, with top markets including Saudi Arabia, Kuwait, Iran, Egypt and the UAE. One in three Middle East households said Dubai would be their first choice to purchase timeshare.
“The benefit of the timeshare model is clear; it will enhance the high occupancy rates in Dubai and increase the average length of stay from the current three days to seven night duration,” he said.
RCI were working with developers across most of the UAE. Their research also shows that Gulf Arabs are keen to buy into larger units of ownership, called “fractionals”. Typically these focus on upscale villas and luxury apartments bought in multiples of months rather than weeks.
Conventional timeshare is the tip of the iceberg with many derivatives available to help keep the leisure real estate market buoyant, with equally attractive business being generated for short term vacation rentals, condo hotels and rental and exchange programmes.
Both shared ownership and rental programmes offer a great incentive to developers. The worldwide timeshare and fractional market is estimated to be worth $13 billion per year in sales and continues to enjoy healthy growth in a backdrop of global economic slowdown.
Dubai based Ivory Grand, the property enterprise owned by Mohammed Ali Abdullah Al Shafar and Humaid Al Suwaidi Real Estate, has recently agreed terms with Group RCI to affiliate their new timeshare project in Al Barsha.
With the sharp increase in construction costs and corresponding rise in the price of land, developers had been looking for innovative ways to encourage investors and stimulate new sales. Construction prices are predicted to go up by 15 to 20 per cent this year, time share provides a highly profitable option to a developer’s project. In some cases developers can expect up to 300 per cent premium on the sale prices per foot versus traditional real estate.
“As new regulations for the industry are implemented the timing couldn’t be better for developers to capitalise on the opportunities. The new law requires developers or real estate companies looking to enter the market to apply for a time share license directly from the Real Estate Regulatory Authority (RERA). At that stage they will need to supply detailed plans of the project, company profile, background and also pay a bond prior to marketing their developments,” Turner said.
Dubai RERA department will distribute licensing and it is expected that a self regulating working group including Group RCI will provide guidance and statistical data and consultation.
“As long as there is careful monitoring of sales and marketing practices in the emirates and tight controls of licenses issued by RERA then we feel the timeshare model will have a huge positive economic impact and support Dubai’s strategic plan to accommodate 15 million tourists by 2015.