DemanD outstripping

supply

A N A F H M i d d l e e A s t e c o N o M i c R e p o R t

t H e vA c At i o N o w N e R s H i p i N d u s t R y i s e s t i M At e d t o g R o w 3 0 % i N 2 0 1 4

b u t s u p p ly i s N o t c At c H i N g u p.R e g u l At i o N i s t H e k e y

The number of Timeshare properTies in The uae has noT been able To caTch up wiTh The growTh indemand

•ThedemandfortimesharesintheUAEhasbeenoutstrippingsupply,promptingvacationownershipplayerstolookforother

destinationstomeetdemand.

•Thetimeshareindustryisestimatedtohavegrownby15-20%in2013anditisexpectedthatyear2014willsurpassthatrate,

withgrowthslatedat30%year-on-year.

•Thegrowthisspurredbyglobaleconomicrecovery,ingeneralandrobusteconomicgrowthintheUAEinparticularbuoyed

byastrongtourismandhospitalitysectorandapropertysectorthatisbacktotheboomcycle.

•However,whiledemandhasbeengrowingyear-on-yearinhighdouble-digitratesthenumberoftimesharepropertiesinthe

UAEhasnotbeenabletocatchupwiththisgrowth.

•Oneofthereasonssupplyhasnotbeenabletocatchbecausedevelopersandothermulti-nationalhospitalitycompanies

arestillwaitingforthefinalisationofthedraftregulationforthetimesharesector.

•Dubai’sRealEstateRegulatoryAgency(RERA)hasalreadyformulatedbyIntervalInternational,aprominentworldwide

providerofvacationservicesandanoperatingbusinessofIntervalLeisureGroup(IILG),andRCI,thelargestofthetimeshare

exchangeagencies.BothcompaniesarepartnersofArabianFalconHolidays.

•Uponthepassingofthelaw,RERAwillregulatethetimesharebusinessinDubaithroughitsspecificTimeshareDivision.

•Inthemeantime,RERAhasbeensupportingthetimesharesectorbyprovidingtrainingsandaccreditationtobrokers.The

GovernmentofDubaiLandDepartmenthasalsobeenorganisingtrainingcoursesforrealestatebrokersworkinginthe

Dubai’stimesharethroughacoupleofprofessionalcourses.

•Withtheapprovalandtheenactmentofthetimesharelaw,therewillbeclarityontheprocedures,whichwillapplyto

timeshares,andthiswillgreatlyimpactthesectorandtheeconomyoftheUAEasawhole.

•DubaiissettobethefastestgrowingtimesharemarketintheworldandthatthetimesharesectorwillgiveDubaieconomya

Dh14billionboostin2020thankstothesignificantincreaseinthenumberoftourists,realestatepricesandhotelroomrates

intheemirateoverthenextdecade.

•InDecember2013,HHSheikhMohammedbinRashidAlMaktoum,Vice-PresidentandPrimeMinisteroftheUAE,andRuler

ofDubai,issuedDecreeNo.41of2013,concerningtheregulationoftheholidayhomesmarketinDubai,saidtobethefirst

stepinregularisingtheemirate’sholidayhomesmarket.

HigHligHts

THE GROWTH STORY

DUBAI LEADING THE WAY

DEMAND OUTSTRIPPING SUPPLY

CHALLENGES FACING VACATION OWNERSHIP MARKET

PERCEPTION

REGULATION

ABOUT TIME SHARE

ABOUT ARABIAN FALCON HOLIDAYS

ABOUT ROYAL CLUB DUBAI

ABOUT INTERVAL INTERNATIONAL

CONTENTS

30%expected growth in the

timeshare sector

2014

15-20%growth in the timeshare sector in

2013

The demand for timeshares

in the UAE has been

outstripping supply

AED14billion

Economic boost of the

timeshare sector to Dubai

in 2020

Source: American Resort Development Association

AFH RESEARCH

supply ⊲DEmAnD

dubai is seT To be The fasTesT growing Timeshare markeT in Theworld

AFH RESEARCH

tHe groWtH storyThetimeshareindustryissettoreceive

amassiveboostin2014withasustained

recoveryintheglobaleconomyanda

resultantriseinbothhotelroomratesand

propertypricesinmajortourism

destinations.

Vacationownership,ortimeshare,

industryisestimatedtohavegrown

between15and20percentin2013

globally,anditisexpectedthatyear2014

willsurpassthatgrowthrate.

Globally,aftergrowingformorethan

threedecades,vacationownership

industrysufferedasetbackin2009owing

totheglobaleconomicslowdown.Inthat

yearalone,combinedglobalsalesof

vacationownership,timeshareand

fractionalownershipslumpedbymore

thanaquarter(27percent),withasset

pricessufferingatthehandsofthecredit

crisisthathadgrippedtheworld.

DevelopedcountriessuchastheUS

andEuropeaccountforthelargest

marketsforvacationownershipinthe

world.DevelopingcountriesintheMiddle

EastandAsiaPacificregionarealso

gainingpopularity,althoughthepaceof

developmentremainsslow.

Withintheregion,thereareahandfulof

destinationleadersinthevacation

ownershipindustry,namelyMeccain

SaudiArabiawherevacationownershipis

limitedtoreligioustimeshare;Egypt,which

isaclearleaderintermsofthelargest

baseoftimeshareprojectsandowners;

andDubai,whichisanascentbutrapidly

developingvacationownershipmarket.

Therearealsoacoupleofresortsin

Lebanon,butthemarketthereremains

rathersmall.

Thetimeshareconceptmarksoneof

thehighestgrowingratesinthetourist

sector.However,itspenetrationwithinthe

MiddleEastregionremainslimited.

Butthisislikelytochangesoon.

DuBai leaDing tHe WayWithpropertypricesinDubaiclockingthefastestgrowthratein

theworldlastyear,manyaspiringpropertyownersintheemirate

arebeingpricedoutofthesecondhomeorvacationhomes

market.ForsuchpeopleandmillionsotherswhovisitDubaiona

regularbasisandstayinoneofthehundredsofhotelsaround

town,aninvestmentintimesharemakesperfectfinancialsense.

Dubaiisthereforenowontheforefrontandissettobethe

fastestgrowingtimesharemarketintheworld.Thetimeshare

sectorwillgiveDubaieconomyaDh14billionboostin2020thanks

tothesignificantincreaseinthenumberoftourists,realestate

pricesandhotelroomratesintheemirateoverthenextdecade.

Dubaiisoneofthetopcountriesintheworldthatreceive

frequentinternationalvisitors-newandreturningones–both

forbusinessorleisure,exceedingthoseregisteredbymany

touristdestinationsglobally.AndthismakesDubaianidealplace

toinvestinthetimesharesector.

AccordingtoareportfrompropertybrokerKnightFrankin

December2013,Dubai’srisinghousepricesaretheworld’s

fastest;surpassingpricerisesinMainlandChina,HongKongand

Taiwan.

AsurveyheldbyYahooMaktoobResearchalsosaidthatDubai

hasbecomethemostpopularshoppingdestinationinWorld

beatingmegacitieslikeParis,London,NewYork,Beijingetc.

OverthelastdecadeDubaihasestablisheditselfasacityof

shoppingmalls,luxuriouslifestyledestinationandlandof

opportunitiesforretailersfromallovertheworld.Dubaihastruly

becomethenumberoneglobaltourismdestination.Dubaihotel

andhotelapartmentguestshavereached10.5millionin2013,

whileresidencenightswereup6.3percentatmorethan41

million.TheofficialexpectationssuggestedthatDubaiwill

receive20millionvisitorsby2020.

Nevertheless,thisnumberiscurrentlyunderreconsideration,

afterDubaiwontherighttoorganisetheWorldExpo2020

exhibition,whichisexpectedtoreceiveadditional25million

visitors.

WithonlyahandfulofqualitytimeshareresortoptionsinDubai

currently,thesectorissettowitnessarapidgrowthinyearsto

come,bolsteredbytheorganicgrowththatthetourismsector

willsee.

In2009,Dubaiwasnotsparedfromtheglobaleconomic

recessionanditwasinfactamongtheworstperformingreal

estatemarketsintheworld,withpropertypricesdecliningby

almost50percentfromtheirpeaksinthe

previousyear.

ButwhileDubai’srealestatemarkethasseenaswingfrom

beingoneoftheworld’sworstperformingmarketstobeingthe

world’sbestperformingmarketinfouryears,timeshareasa

marketremainsrecession-proof.Thisalsomeansthatitdoesn’t

seewildswingsontheupsideordownside–itprovides

much-neededstabilitytothemarketintimesofcrisiswhile

providingholidaymakerswithlessexpensivestaysduringupturns

aswellasdownturns.

The demand for Timeshare is fuelled by The booming properTy, Tourismand hospiTaliTy secTors in The counTry’as well as The reTurn in invesTorsconfidence

The demand for Timeshare is fuelled byThe booming properTy, Tourism and hospiTaliTy secTors in The counTry as’well as The reTurn in invesTorsconfidence

The demand for Timeshare is fuelled by The booming properTy, Tourism and hospiTaliTy secTors in The counTry as well as ThereTurn in invesTors’ confidence

ThedemandfortimesharesintheUAE

hasbeenoutstrippingsupply,prompting

vacationownershipplayerstolookfor

otherdestinationstomeetdemand.

Thetimeshareindustryisestimatedto

havegrownby15-20%in2013anditis

expectedthatyear2014willsurpassthat

rate,withgrowthslatedat30%year-on-

year.

Thegrowthisspurredbyglobal

economicrecovery,ingeneralandrobust

economicgrowthintheUAEinparticular

buoyedbyastrongtourismandhospitality

sectorandapropertysectorthatisback

totheboomcycle.

However,whiledemandhasbeen

growingyear-on-yearinhighdouble-digit

ratesthenumberoftimeshareproperties

intheUAEhasnotbeenabletocatchup

withthisgrowth.

Thedemandfortimeshareisfuelledby

theboomingpropertyandtourismand

hospitalitysectorsinthecountryaswell

asthereturnininvestorconfidence.In

addition,thereisastronganticipationofa

significantincreaseinthenumberof

tourists,realestatepricesandhotelroom

ratesintheUAEoverthenextdecade.

Oneofthereasonssupplyhasnotbeen

abletocatchbecausedevelopersand

othermulti-nationalhospitalitycompanies

arestillwaitingforthefinalisationofthe

draftregulationforthetimesharesector.

Dubai’sRealEstateRegulatoryAgency

(RERA)hasalreadyformulatedbyInterval

International,aprominentworldwide

providerofvacationservicesandan

operatingbusinessofIntervalLeisure

Group(IILG),andRCI,thelargestofthe

timeshareexchangeagencies.Both

companiesarepartnersofArabianFalcon

Holidays.

IntervalInternational,ArabianFalcon

HolidaysandRoyalClubDubairecently

announcedamulti-yearextensionofthe

affiliationagreementforRoyalClubat

PalmJumeirah.RoyalClubatPalm

Jumeirahwasthefirsttimeshareresortin

Dubaiandhasbeensuccessfully

marketedbyArabianFalconHolidays

since2004.LocatedonDubai’slandmark

PalmitwaslaterjoinedbyRoyalClubat

TheBonningtonTower,anotherInterval

affiliatedresort.

Uponthepassingofthelaw,RERAwill

regulatethetimesharebusinessinDubai

throughitsspecificTimeshareDivision.A

publiclyavailabletimeshareregisterhas

alsobeenproposed.

Amongothers,thetimesharelawwill

seearegistrationofdeveloperswith

RERApriortoanysales;afilingofsales

contractsanddisclosurestatementswith

RERAbeforeadvertisingorsalescan

commence,whichincludespecific

informationrelatingtothetimeshare

developmentsuchthenatureofthe

developmentandallrelatedexpenses

andannualchargesforthefirstyear;a10

daycooling-offperiodforpurchasersto

changetheirmindsinrespectofthe

purchase,withdepositsinescrow.

Intheinterestsoftransparency,owners

willbeentitledtoanitemisedbudgetfor

theirtimeshare,includingrevenueand

expenses.

Wherethedeveloperamendstothe

natureofthetimesharedevelopment,

purchaserswouldhavetherightto

canceltheircontractsincertain

circumstances.Andaswithothersalesof

realestatedevelopmentsunder

constructioninDubai,theremustalsobe

anescrowaccountinplaceintowhichall

purchasers’fundsmustbeplaced

pendingcompletionofconstructionofa

property-onlyuponsuitableassurance

fromthedeveloperinrelationto

completionofthetimesharewouldthese

fundsbereleased.

Inthemeantime,RERAhasbeen

supportingthetimesharesectorby

providingtrainingsandaccreditationto

brokers.TheGovernmentofDubaiLand

Department(LD)hasbeenorganising

trainingcoursesforrealestatebrokers

workingintheDubai’stimesharethrough

acoupleofprofessionalcourses.The

programmeisbeingconductedbythe

DubaiRealEstateInstitute(DREI),the

educationalarmofLDincooperationwith

therealestatelicensingdepartmentof

RERA.

TheUAEhasbeenverysupportiveof

thetimesharesector.ArabianFalcon

Holidayshavehadanumberofdialogue

withgovernmentagenciesandhave

beenassuredthatthegovernment

understandsthatthetimesharepresents

anewopportunityforinvestorsand

frequenttouristsinDubaiandthewhole

UAEanditwillalsoboosttherealestate

andtourismsectors,alongwithother

relatedsectors.

Withtheapprovalandtheenactment

ofthetimesharelaw,therewillbeclarity

ontheprocedureswhichwillapplyto

timeshares,andthiswillgreatlyimpact

thesectorandtheeconomyoftheUAE

asawhole.

AFH RESEARCH

DemanD outstripping supply

DEcrEE no. 41 of 2013The decree issued by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, concerning the regulation of the holiday homes market in the emirate of Dubai

December 2013When Decree No.1 was issued, said to be the first step in regularising Dubai’s holiday homes market

The uae in general and dubai in parTicular has Taken acTive aregional leadin acTively formulaTing regu-

The uae in general and dubai in parTicular has Taken a regional lead in acTively formulaTing regulaTion for Theholiday homes markeT

Evenasthevacationownershipmarket

inDubaiisgrowingrapidlyandhasthe

potentialofdevelopingatamuchfaster

clip,thereremainissuesthatareaffecting

itsgrowthnotjustintheemirate,but

CHallenges FaCing VaCationoWnersHip marKet

Globally,owingtoahandfulofconartists

thatabusedthelackofregulatoryoversight

overvacationownershipindustry,the

sectorreceivedalotofbadpress,

tarnishingitsimage.Therearetimeshare

companiesthathavebeenaccusedof

scammingtheircustomers.Oneexampleis

theIncentiveLeisureGroup,aUK-

registeredfirmthathassincebeen

liquidated,leavingitsinvestorschasingthe

legalroutetoreclaimtheirmoney.

Inaddition,theindustry’sreputation

hasbeenscarredbythecomparisonof

thetimesharesalesmantotheusedcar

salesmanintheWest.Asectionof

vacationownershipfirmshavebeen

accusedofhard-sellingtheirproducts,in

effectputtingalotofsalespressureon

theprospectivebuyerto‘buytoday’

perCeptionduringasalespitchorpresentation.

Inaddition,customershavealso

complainedofleavingatimesharetour

(industryjargonforasalespitch)

completelyexhaustedbythebarrageof

salespeopletheyhadtodealwith

beforetheyfinallyexitedthe‘tour’.Ata

timewhentheindustrywasstillnascent

intheWest,suchunethicalsalestactics

wereemployedbyasectionofthe

timeshareindustry,whichhasdone

long-termdamagetotheindustry’s

prospects.

Evenastheregion’stimesharesector

hasevolvedunderalargelyethical

umbrella,small-timecowboyskeep

sproutingnowandthenevenas

authoritiesstampthemoutthrough

activeregulationsandoversight.

TheUAEingeneralandDubaiinparticularhastakenaregional

leadinactivelyformulatingregulationfortheholidayhomesmarket.In

December2013,HHSheikhMohammedbinRashidAlMaktoum,

Vice-PresidentandPrimeMinisteroftheUAE,andRulerofDubai,

issuedDecreeNo.41of2013,concerningtheregulationoftheholiday

homesmarketintheemirateofDubai.

Withtheobjectiveofcontributingtothegrowthofthetourism

industrybybroadeningtherangeofaccommodationsavailableto

visitors,thedecreedictatesthatDubai’sDepartmentofTourismand

CommerceMarketing(DTCM)willberesponsibleforthegrantingof

licensestothosepartieswhointendtorentoutafurnished

residentialpropertyonadaily,weeklyormonthlybasis.

Twonewclassificationstandardswillbeaddedtotheexisting

regulationHotelClassificationframework,withholidayhomesratedaseither

StandardorDeluxe.Analystsmaintainthattheregulationofthe

rentingofpropertiesasholidayhomeswillhaveaconsiderable

positiveimpactontwoofDubai’skeyindustries–tourismandreal

estate.

Industrywatchersbelievethisisafirststepinregularisingthe

emirate’sholidayhomesmarketinanticipationofthemassiveinflux

ofvisitorsexpectedby2020.

However,regulatoryoversightoutsideDubairemainsweak,and

needstobe

bolsteredbyregionalaccordstolendconfidencetoregionaland

internationalholidaymakers.

AFH RESEARCH

DAily, wEEkly or monthly bAsisThe frequency on which furnished residential property can be rented out under the supervision of Dubai’s Department of Tourism and Commerce Marketing

standard or DeluxeThe 2 new classification standards will be added to the existing Hotel Classification framework, with holiday homes rated as either

acrossthewholeregion.Infact,someof

theproblemsthatthetimeshareindustry

facesareglobalinnature,notleastof

themtheperceptionproblemthatmars

itspotential.

Male / 29yrs oldSingle / Filipino

arabian falcon holidays (afh) is The largesT independenT Timeshare sales and markeTing company in The middleeasT

Vacationownership,ortimeshareasitispopularlycalled,

comprisesamajorsegmentofthehospitalityindustry.Asof

mid-2013,therewereabout5,500timeshareresortsspread

across108countries,demonstratingthesignificantfootprintof

theindustry.Globally,sharedvacationownershipgenerated

morethan1.1millionjobsin2010andadirectturnoverofmore

than$45billion,whichexpandstonearly$114billionwhen

aBout timesHare

aBout araBian FalCon HoliDays

aBout royal CluB DuBai

aBout interVal international

Disclaimer: This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. arabian Falcon

Holidays (aFH) does not guarantee or warrant the accuracy, reliability, completeness or currency of the information in this publication nor its usefulness in achieving any purpose.

readers are responsible for assessing the relevance and accuracy of the content of this publication. aFH will not be liable for any loss, damage, cost or expense incurred or arising

by reason of any person using or relying on information in this publication.

AFH RESEARCH

ArabianFalconHolidays(AFH),thelargest

independenttimesharesalesandmarketing

companyintheMiddleEast,wasfoundedin

1999whenthepotentialoftheUAE,Dubai

inparticular,asamarketforvacation

ownershipwasrecognised.

ArabianFalconisapremiereinternational

serviceprovidertothetimeshareindustryin

theMiddleEastandhasbeendelivering

excellentclientservicesandprovidingthe

bestvacationproductsintheGCC

marketsince2003.

AFHhastimesharepropertiesinRoyal

TheRoyalClubDubaiisaluxurybrandofvacationownership

resortsbasedinDubai,UnitedArabEmirates.TheRoyalClub’s

resortsareownedbytwosistercompanies,CaryatidProperties

LtdandDermarrPropertiesLtd.DermarrRealEstateBrokersLLC,

acompanybasedinDubaiistheauthorisedrepresentativeforall

oftheseresortsandanyfutureresortscreatedundertheRoyal

IntervalInternationalisaworldrenownedexchangecompany

withover2,500resortsworldwide,wehaveappointedInterval

Internationalaswefeelthatthereresortsareofasimilarquality

indirectandinducedimpactsincluded.

Theresearchreportsaidfactorssuchasanincreasing

numberofworkingadultsandwomen,earlyretirement,growing

demandforleisureandrecreation,increasingurbanpopulation

andrelativelybettereconomicconditionsareresponsiblefor

enhancedtraveland,therefore,demandofvacationownership

products.

ClubBonningtonHotel,Jumeirah

LakesTower,Dubai;RoyalClubatThePalm,

PalmJumeirah,Dubai;SerenityinLes

JardinsdeZyriab,Marrakech,Morocco;

PalaceoftheGoldenHorses,KualaLumpur,

Malaysia;andGoldenPalmTree,Sepang,

Malaysia.

Thecompanyislicensedtomarketand

selltimeshareintheUAEandhasdeposited

therequiredAED1millionbankguarantee

withtheDepartmentofEconomic

Development,Dubai.ArabianFalcon

HolidaysisanactivememberofDubai

Clubbrand.In2010wealsoopenedasatelliteofficeinVictoria

Island,Lagos,NigeriacalledDermarrPropertiesNigeriaLtd.At

theRoyalClubwebelieveindeliveringthebest,thereforewe

appointonlyofDubai,andforpioneeringthemarketingand

sellingofthecity’sfirstthebestcompaniestolookafteryouand

yourinvestment.

toours,alloffering5starstandards,sothatyoutheclientcan

enjoythem.www.intervalworld.com

ChamberOfCommerceandIndustry,

MembershipNo.53170.

AttheVacationOwnershipInvestment

Conference(VOIC2007),ArabianFalcon

Holidayswashonouredtoreceivethe

IntervalInternationalPioneer’sExcellence

Award,whichwaspresentedtoCEO,Al

MohannadSharafuddinbyInterval

InternationalChairmanandCEO,Mr.Craig

M.Nash.Theawardwasgiven“forvisionary

foresightandrecognitionofthetimeshare

potentialtimeshareresort.

www.arabianfalcon.com

Contact detailsMohannad Sharafuddin

Chairman & CEO Arabian Falcon Holidays

+971 (4) 324 4775 mohannad@arabianfalcon.com

Lucy VicenteAccount Manager

New Perspective Media+971 (4) 236 7033

lucy@newperspectivemedia.com