Timeshare, or shared ownership, is expected to become much more popular in Dubai as newly built areas of the city attract thousands of new visitors and property owners seek to maximise profits from their investments. The prerequisites for profitable timeshare development - high room rates and significant numbers of leisure travellers - have been increasingly evident in the city since the development of residential areas such as Downtown Burj Khalifa, Palm Jumeirah and Dubai Marina.
"These prerequisites have been in place for a number of years," says Jeff Tisdall, the managing director for the MENA region at RCI, a timeshare vacation exchange network. "But the Dubai market recently has been strengthened very significantly from a hospitality perspective. If you think about Burj Khalifa and the surrounding downtown area, Palm Jumeirah, Marina Walk, and The Walk in the Jumeirah Beach area.
"Those were all areas that were either construction zones or master plans three or four years ago, and today those are areas that are online and they're attracting thousands of visitors in their own right. They've added significantly to the value of the hospitality product." The state of the property market in the emirate would also encourage the adoption of the shared-ownership model, he adds. "With the cooling off of the property market, there's now a very strong motivation in place, and we expect to see an acceleration of shared ownership development.
"Up until and including most of 2008, the whole ownership residential market enjoyed a period of phenomenal success. The temptation was very much to stick to proven concepts, and there wasn't much motivation to innovate and integrate new products and new concepts into hospitality business models and into mixed-use developments." International hotel operators agree that Dubai is an attractive market for establishing timeshare resorts.
Hilton Grand Vacations is in discussions about a project in Dubai, which it expects to launch within the next year. Richard McIntosh, Hilton Grand Vacations' managing director for Europe, the Middle East and Africa, also believes the right conditions are emerging for the timeshare industry. "Now that the market has slowed, going forward I believe it will now in time become a more sensible market, with much fewer speculative purchasers looking for a fast return, and the shared-ownership market can get started, because it is not a real estate purchase - it's a lifestyle purchase, and not one that should be sold as an investment."
Shared-ownership projects in Dubai that were delayed and are expected to be completed over the next year include the Nassima Tower on Sheikh Zayed Road and the Ivory Grand in Al Barsha. "We have certainly seen projects that haven't come online as quickly as we originally thought they might," Mr Tisdall says. With little development of the shared-ownership market in the Gulf region, RCI believes Abu Dhabi is also likely to have potential in the sector.
"As the hospitality and the leisure segment continues to grow in Abu Dhabi, then Abu Dhabi will become increasingly attractive from a timeshare and vacation-ownership perspective," Mr Tisdall says. Mr McIntosh sees potential for timeshare in Abu Dhabi in the future, but he adds that Hilton Grand Vacations has not yet entered serious discussions about projects in the capital. "We believe developments like Yas Island and Lulu Island will offer interesting opportunities for vacation ownership developments," he says.
The timeshare concept also has potential in Qatar and Oman, and even in Mecca, Mr Tisdall says. "Religious timeshare resorts also have great potential," he says. "The concept has received positive responses among Muslim communities, many of whom have a common interest in travelling to Mecca." @Email:rbundhun@thenational.ae
