Message of the Month

March 2016

This month I’d like to share an update with you that has constructive and long-term linkages with the hospitality and tourism industry. The National Tourism Policy has been drafted and is likely to be implemented this year. This landmark policy gives overall thrust to the development of tourism in the country. And is largely in line with the recent proposals that have been made by timeshare industry representatives and key stakeholders, looking at increasing awareness and driving additional traffic within the country.

India presents a geography with vast interiors, giving timeshare a wide canvas – especially at popular tourist locations. The timeshare industry has sought incentives linked with investments in popular locations that are driving a fair share of the traffic. In addition to propelling growth, timeshare can result in employment generation and the creation of small entrepreneurial opportunities within local communities. The ripple effect here is about three times the direct investment, according to a recent survey.

By adopting best practices from world leaders and deploying workable models within the country, timeshare also falls within the definition of “Make-in-India” – which can be a great source of inspiration and encouragement.

An industry that is growing surely and steadily

The timeshare industry is currently at an early stage of development and growth. The CAGR in the past several years has been 15-18% and is expected to display sustained growth in the near future. What is encouraging here is the shift or widening of demographic profiles. The age group which was confined to 35 years now includes profiles below and above our target group listings. It includes younger target prospects on the one hand and senior citizens on the other, who make up a sizeable portion of the demographic cluster.

Today’s consumer has a higher propensity to spend on planned vacations and there is a growing demand for holidays that offer the family unique holiday experiences - in newer, largely undiscovered tourist locations in the country.

What industry stakeholders need to do

• At the grassroots level it is useful to increase awareness of the product, its offerings, and the benefits delivered to the customer over the long and sustained period of membership.
• There is also the underlying need to provide reassurance to customers when it comes to key factors such as credibility, transparency and consumer confidence. There is a whole lot more to be done in this area.
• We also need to do some course correction with customers who buy timeshare and slowly distance themselves from the product as the years roll by – this is largely a result of limited product knowledge and a blinkered view of the fee structure that’s part of the timeshare business model.
• Over the next decade we also need to increase penetration and ensure a steady growth for the industry. A good way to do this is increase members and member participation within the AIRDA fold. This will underline the importance of regulated timeshare – with a clear focus on customer interests.

The industry-building role played by AIRDA

• AIRDA’s lead role in regulated timeshare has long term benefits for the industry. AIRDA provides a strong lobby platform on important policy issues with the government and other stakeholders – as a growing body of highly professional members this platform also provides a strong united voice for the industry.
• AIRDA also endorses project support that requires documentary support for approvals – especially when it comes to funding and raising capital. AIRDA-backed endorsements are also of considerable importance to smaller players.

The concept of leisure holidays is increasingly becoming an annual event and almost falls into the category of “essential” things to do in the year. Under the AIRDA umbrella, I firmly believe we have a great product that is fast evolving with the needs of our customers. And being a lifestyle product, I also see growth linked to changes in lifestyle and rising disposable incomes.

The future looks good for timeshare in India

B. S. Rathor
Advisor & Member - Executive Committee