Explaining timeshare
Harold Derrah, CEO of Anantara Vacation Club, explains the concept of time-share ownership and its growing popularity in China. Anantara was launched in Dec 2010 and currently has 3,500 owner-members, including about 500 Chinese citizens and expatriates living in China.
Q: Timeshare is still relatively new in the China market - what is the potential?
We've been selling to mainland clients for 18 months and they have become our No 1 clients in the last four months. Overwhelmingly. Our product quality is much higher than was previously available to buy in China. We have high hopes for our Sanya product, recently launched. Sanya will keep growing and growing among our resorts in Sanya, Thailand and Bali.
We put all the properties in a trust that protects the consumer, so they know they have their right to use the property for the next 27 years. If we went bankrupt, for example, they would still have use of the property. We call it being bankrupt-proof.
Q: What sort of clients are you looking for in the China market? The people most likely to buy in?
We made strategic alliances with different banks to do joint marketing activities, for example, with China Merchants Bank. So we deal with private banking clients and sell them a vacation in Thailand, for example, at a significant discount. As part of the deal, they go on a tour and see if they like our timeshare resort. If we convert 15 percent of our tours, I'll be happy.
We sell a high-end product, typically a two-bedroom, two-bathroom property with a full kitchen, generally 120 square meters, but up to 250 sq m. It's not a hotel room. Some are pool villas. They are in highly desirable locations, such as on a beach.
We're selling to a target market, so we are looking for family-oriented consumers. Many of our apartments have private pools.
It's for the person who wants to create family memories and continue that through their lifetime and through their kids' lifetimes.
Q: Can we explain the basic concept to interested readers?
We sell a points program. They buy a certain number of points. The Chinese rank as our highest average-price buyer, at around 50,000 points. They buy this in one lump, but they get this reestablished in their account every year. So if they only use 30,000 points one year, 20,000 get carried over and the following year they have 70,000.
(Note: 50,000 points is about "a week's equivalent in a pool villa each year, mid-season, for 27 years". This would cost around $25,000, paid in a one-off lump sum.)
They don't have to use the same resort each year, or they can split up their vacation over different resorts in different countries within the same year. For example, they can spend four days in Koh Samui and another four in Bali. This is quite different from other timeshare operations.
We've built a club system for maximum flexibility, much more flexible than the old system, and it's all protected in a trust.
From the Chinese perspective, our two most desirable locations are in Phuket and Bali.
