VIEWS AND INTERVIEWS
Talking to Radhika Shastry, Managing Director - RCI India (Part II)
Radhika Shastry is Managing Director at RCI India, a subsidiary of Wyndham Worldwide Corporation, and the global leader in vacation exchange with over 4000 affiliated resorts in approximately 100 countries. She is responsible for leading RCI’s business in this region and is based in the Bangalore office.
During her 19-year tenure with RCI, Radhika has developed many new products and led numerous initiatives to help grow the business in India. Her strength in building long-term relationships combined with her knowledge and understanding of the industry has not only aided the development of Timeshare in India but has also made RCI synonymous with the term in this part of the world.
This is the second in the series of interviews with Radhika. We talk to her from the vantage point of a key stakeholder in the industry, and an observer looking at current and future scenarios.
Q: What are the unique advantages of developing properties in India?
A: As always, the labour component is a major cost saver, when you compare with developing properties in the West – and that can stack up as a key advantage. We also have a plethora of tourist destinations that are still untapped in terms of development, and these are locations where land costs are relatively low. Another factor that weighs in here is a growing population that is young - with bright prospects of upward mobility. This adds to the demand for emerging vacation categories and enables the development of different products for different mindset segments.
Q: What are the unique challenges the industry needs to overcome?
- At popular locations, we have high property acquisition costs with poor norms on floor-space-index. As a response, developers have explored properties in lesser known locations, eventually making the property affordable. Good examples of this are Coorg and Munnar in South India.
- There currently is no formal regulatory framework or environment in place.
However, AIRDA functioning as a self-regulatory body has introduced a strict code of ethics which includes a 10-day cooling off period extended to new timeshare customers. At another level, AIRDA also lobbies with the government on behalf of the industry on issues that could do with some assistance on policy matters and operations.
- While labor costs are visibly low, there is a short supply of trained people in resort employment markets. Developers have overcome this problem by organizing in-house training programs to give their people the right exposure and insights into jobs, responsibilities and customer service.
Q: What advice would you give a developer embarking on his first project?
- I would advise people to seek out new destinations. The huge popularity of Goa, and its international appeal has indeed made it a sought-after vacation destination. Goa becomes the first choice for many entering the resort business in India but there are many other beautiful locations where the land more affordable. We have a 4,500 mile-long coastline, property nests within the mountains bordering the country’s northern and eastern states, and dense jungles and exotic wildlife in central India. All waiting to be explored.
- I would also advise new developers to nurture and motivate sales and marketing teams to grow the industry in a constructive manner. Developers who have successfully scaled up operations here have done so by developing their own sales & marketing infrastructure. Similarly, my advice to a newcomer would be to invest in internal training and orientation, rather than outsource this service. In addition to traditional methods of timeshare selling, promotion can also be done as home-sits, through general sales agents who penetrate smaller towns within the country.
- I would also advise newcomers to reach out to those who know best. Especially international entrants for instance, who could hear negative interpretations about doing business in India. I would like to assure them that good governance can indeed be practiced while setting up or running operations in this country. Reaching out to industry bodies such as AIRDA or a company such as RCI, which has established itself as a leader in this space in the last 18 years, for local advice and guidance, would be prudent.
As I mentioned in the first segment of this interview, the timeshare industry in India is currently in a vibrant mode with around 350,000 timeshare owning families and a total industry turnover of US$ 150 million. The original fixed-week product has morphed over time, adapting to market demand and consumer needs. Today, floating weeks and points-based products are vital segments in the timeshare mix.
Rising consumer affluence and the tremendous demand for experiential holidays, combined with greater accessibility due to the development in tourism infrastructure and advent of low-cost carriers is driving the timeshare industry, which is the fastest growing component of the tourism segment in India and growing at about 16% per annum.