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| Sanjay Gupta |
Gaps continue to exist in the Indian timeshare space with a handful of companies disseminating misleading information during their sales pitch. While promising the sky, these companies use this tool to entice the customers to buy into their product. However, with branded players entering the market Indian timeshare industry seems to be gradually heading in the right direction. Sanjay Gupta, chairman of Gandhinagar, Gujarat-based company Neesa Leisure Ltd, speaks about the timeshare industry in India, hurdles facing the industry and his growth plans in the coming years. Excerpts…
Could you give us an overview of the timeshare business scenario comparing the current fiscal (YTD) with the previous year?
The industry in India has been growing anywhere between 18-20% year-on-year over the last 5 to 7 years. It is found that Indians are holidaying like never before and lapping up the timeshare concept big way and the numbers are gradually increasing. Our understanding is that the mindset towards holidaying has changed considerably.
Through timeshare, Indians are looking at a lot of new holiday experiences, and are no longer restricted to holidaying at popular destinations. In fact, secluded destinations rank high on the radar of timeshare customers. So a lot of new destinations have opened up and developers are looking at completely unknown locations where they wish to open timeshare properties.
What was the impact of global economic downturn on timeshare – both in terms of memberships as well as business?
Being a resilient product, vacation ownership or timeshare resorts witnessed a steady growth during the global slowdown and with market recovering slowly the industry is back to its heydays.
What in your analysis is the market size of the timeshare industry in India vis-à-vis the developed markets?
The domestic timeshare market is estimated at Rs 500 to 600 crore — still in the infancy stage compared with the US-led world market of $14 billion. However, with the kind of growth we are seeing, the numbers should improve significantly in the coming years.
Has the industry managed to completely change the negative perception of timeshare industry in India?
Many people perceive that timeshare invariably invokes a negative image. It is only in the last 7 to 8 years that the perception towards vacation ownership has transformed – thanks to interest taken by branded hotel companies. Today, vacation product delivers on its promises — creating memorable vacation experiences that is sure to last for a lifetime. Most importantly, the brand hotel companies have developed an important connection between their own brand and the vacation ownership product, which seems to have built confidence among timeshare members.
As far as Cambay Family Holiday Club (CFHC) is concerned, the association with RCI itself speaks volumes of our serious intentions of growing this market. Besides, RCI has come up with set standards in terms of product offerings. Living up to those standards simply mean that the product offerings conform to international standards. This has been demonstrated from the fact that RCI recently conferred a ‘silver crown’ for our Kollam property - Cambay Palm Lagoon and a ‘gold crown’ for the Kukas property - Cambay Spa & Resorts.
What, in your opinion, are the gaps that still exist and need to be addressed?
Gaps exist in terms of misleading information passed on by companies during their sales pitch. Usually during the sales process, companies promise low cost or free of charge hotel rooms, weekend vacation deals or prizes. And of course, some of these are legitimate. However, trouble generally begins when timeshare companies promise to offer freebies such as cars, or sometimes a luxurious vacation. Such promises are just one of the various means and modes adopted by timeshare companies to entice the customers. Unfortunately such promises are never meant to be kept.
Ambiguous sales pitch by timeshare companies only adds to the agony of the buyers. Also, members land in trouble when they transfer / sell timeshare ownership without studying the ‘fine print’ in detail. So the need of the hour is to bring out overall transparency, thorough understanding of the product bought & how well to utilise and get the best from it
What measures are being adopted by your company to plug the gaps?
Some of the self-initiated mechanisms we have introduced to ensure fair play and boost the confidence level amongst the members include:
- Potential members are strongly recommended to study the ‘fine print’, in detail before signing the document.
- Mystery Audit is conducted on regular basis to ensure and report the service levels.
- CFHC seeks media intervention as well. For instance, media is called upon to experience our properties on first-hand basis, time and again. The unbiased reviews rolled out by the media helps prospective members in decision making.
- RCI has also set standards and procedures to test timeshare sellers’ product offerings. Meeting those standards means the seller is genuine and has legitimate offerings.
How is the target market reacting to these measures?
As per the recent survey, 85% of CFHC members have expressed satisfaction for our services. Moreover, media intervention is working on the positive side for CFHC, as it has helped in building confidence among the members. Plus, Cambay has over 10 properties spread across the length and breadth of the country, so the look and feel factor is always present, unlike other companies which don’t have properties of their own, but still sell timeshare memberships. Such memberships may often not be real.
What are the driving factors for people to buy into the timeshare concept?
Primarily, it offers inflation-free holidays. Secondly, timeshare benefit can be leveraged for 25 years. That apart, there is this newly introduced point system that aids members buy as much or as little points with the RCI / CFHC and accordingly fix their holiday stay. The more points you accumulate, the more enjoyable your vacations will be.
What is the profile of people really buying?
It is widely seen that young executives falling in the age-group of 27 to 40 and newly wed couple are lapping up the membership in a big way. The corporate sector is warming up to the idea of timeshare membership as well.
What are the various benefits derived by the timeshare customer as against traditional ways of holidaying?
Inflation free holidays is a major plus point for timeshare customers. Notwithstanding the soaring prices of holiday destinations which happens every year, the customer has to shell out cash only once, when s/he makes the purchase. In other words, the timeshare customer remains insulated from the volatile nature of the market. Moreover, with the introduction of point system, holidays can be extended. And in fact points can be bought / transferred / shared as well.
In monetary terms how much do they save holidaying through the timeshare concept vis-à-vis the traditional approach?
As a timeshare week owner, your annual maintenance fee equals one week's worth of vacation. If you manage your points effectively you can often get a number of weeks' vacation for one maintenance fee. Besides, the money you shell out ideally is used up within first 5 years of the membership, which means for the remaining 20 years you enjoy free vacations by paying a miniscule maintenance fees.
Of the overall customer base what is the percentage of members actually availing and or getting to avail of timeshare holidays?
Domestic travel forms around 65% of the timeshare vacations sought. As per latest reports at least 1.5 lakh Indian families who own timeshare moved across the country in a year (or six lakh people, if each family has four members). There are 45 players in the vacation ownership industry and it is found that Indians have developed a taste for holidaying like never before and are showing keen interest in the timeshare concept.
Has there been a change in the product offering and pricing? Please provide necessary details?
Keeping in mind the changing customer behaviour, needs and demand, we have introduced an upgraded version of timeshare in the form of RCI points program, i.e. a flexible holiday option program. Indian families are demanding greater value for the money they spend on vacations. Point programs will offer all members around the world, a complete flexibility, in terms of designing their personal holiday package as per their individual needs at the time.
The RCI Points membership assures ultimate vacation elasticity, variety and complete utilisation of the timeshare ownership. The traditional ‘week’ is upgraded into points, which can be ‘spent’ similar to the way cash works. Points can be accumulated and redeemed for an exchange vacation. Unused points can be carried forward to the next year and additional points can be borrowed from next year’s allocation. These points can even be used to buy air tickets, car hire, theme park tickets and more through various Points Partners associated with RCI.
Could you name some of the prominent locations within Indian and across the globe for timeshare?
In the United States the timeshare industry has historically focused on three main areas, Florida, California, and South Carolina. In India, timeshare resorts can be found in Agra, Ahmedabad, Auli, Bangalore, Bhimtal, Binsar, Coorg, Coonoor, Darjeeling, Kollam, Jaipur, Udaipur etc.
How often do the members take a holiday? What is the average length of stay like?
It happens once in a year. And the average length of stay is four days.
Could you provide us details about the various markets that the company has presence in India and overseas.
Cambay Hotels & Resorts has 10 properties across the length and breadth of the country - Gandhinagar, Jaipur, Udaipur, Ahmedabad, Kollam, Goa and Bengaluru. We do not have properties overseas.
How many properties and the total number of guestrooms that are allocated for the timeshare concept?
About 30% of our properties are exclusively for the timeshare concept.
What are the company's growth plans like for this fiscal and the next?
We already have 10 properties across the country and our currently focus is on the Dahej SEZ, where NLL is the official hospitality partner and is setting up full-fledged three-star hotel with other recreational facilities. At Neemrana, a yet another three- star hotel is coming up on National highway-8. Other plans include hotels in Lucknow and Raipur with an investment of Rs 100 crore. Going forward the company intends establish presence in tier I and tier II markets as well.
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