Scope for timeshare industry to flourish

  • Business
  • Monday, 03 Nov 2003

Property Talk: A weekly column by S.C. Cheah

THE timeshare industry in Malaysia is getting more competitive these days as timeshare companies woo new members with discounts and free stays at their resorts when they attend their presentations. 

It is becoming quite common to find timeshare companies setting up booths at travel fairs and at shopping centres.  

Despite rising membership fees, people are still signing up to join these vacation clubs where they need only pay a one-off membership fee plus an annual maintenance charge and they can look forward to free stays at hotels, holiday apartments and resorts both locally and abroad. 

However, it may be time for these timeshare developers and operators to consolidate their position and take a hard look at where the industry is heading. Are they providing good service to their members or are they mere short-term players? 

Legend Worldwide Holiday has 52 timeshare apartments at the Legend Mall in Kuala Lumpur. It is linked to a major shopping mall.

According to a timeshare expert Franco Yong, the former head of Tanco Resort Bhd's Vacation Superclub, many timeshare properties are in a “sad state of affairs” as developers have not invested enough money to refurbish their resorts for several years. 

He said many timeshare developers in the country took a very short-term view of the business and used timeshare as a solution to their property woes. 

“Not many of them take the business seriously enough as a core business,” he said, adding that a corporation with enough foresight and commitment might merge some of the players to create a positive impact for the industry to grow further. 

“Foreigners who are serious and know the potential of the domestic industry would appear in a few years. Foreigners with credible brands would bring expertise, commitment, and quality products to the industry. When that happens, the timeshare potential can really lift off,” he said. 

Yong said it would be a shame for a foreign timeshare developer to spearhead this, as there were enough local developers who could take the lead. 

“The only thing is that these (local) developers need to know that this business is here to stay and that there is plenty of money to be made for a very long time,” he said. 

He said there was plenty of room for more new players but they must be innovative, experienced and view the business in the long term.  

The timeshare industry had been created as a result of adverse economic conditions, he added. 

Hence, with the current difficult hotel and resort business, it is an opportunity for the Malaysian timeshare industry to flourish, if done right and managed well. 

However, that “desired level is far below satisfaction”, he added. 

He feels that a timeshare product must be sold based on its own merits, meaning that the accommodation units were well planned, equipped and managed. 

“What is missing in Malaysia is quality planned, built and operated resorts meant for timeshares. The product must be of such high quality to justify the price,” he said. 

Leisure Holidays Bhd chief operating officer Chan Heng Wah, who took over the helm from Emmeline Yong (who led the Leisure Holiday Club for many years) this year, has been refurbishing the timeshare units in stages.  

“We're going to spend about RM3mil (on refurbishment and fittings) this year. Over the last few years we did not pay so much attention on this as we were pushing sales. Now we want to impress and provide better services to our members,” he said. 

He regrets that a timeshare company had recently been over-selling as this might give the industry a bad name. Leisure Holidays has about 15,000 members. 

Like some of the more established players that have increased their membership fees over the years, Leisure Holidays members are seeing an appreciation in the value of their membership both in terms of fees and quality of their units. 

(Leisure Holidays Bhd's timeshare memberships are known as Leisure Holiday Club and ConnectionPoints.) 

For example, the Leisure Holiday Club's fee was only RM5,500 when it started off in 1987. It rose to RM21,000 in July 1997.  

When it switched to ConnectionPoints in April 2000, the price was RM70 per point for purchase of 125 to 249 points, and RM60 per point for 250 points and more. This has risen to RM100 and RM90 per point, respectively, by April this year. 

Legend Worldwide Holidays director (sales and marketing) Steve Woon said there was a trend for people to go for holidays with their families.  

“There is a lot of potential for the industry to grow if it is marketed right. We've members who have bought more than one membership with us,” he said, adding that the company had been closing about 200 sales a month early this year.  

Its membership fees (up to Aug 27, 2003) ranged from RM13,800 for a Silver 2 Plan to RM28,800 for a Gold Plan vacation membership. 

It is understood that a major public-listed company with several prime hotels and resorts may also enter the industry.  

There are also several emerging trends: timeshare companies buying overseas properties or have “tie-up” arrangements with resorts/hotels abroad and doing their own internal exchanges instead of relying on affiliations with international exchange networks like Resort Condominiums International or Interval International.  

Some timeshare companies also allow some of their premier overseas resorts to be used by members of rival timeshare companies for rental at special rates. 

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