Financial Daily from THE HINDU group of publications
Thursday, Jan 22, 2004
Variety - Resorts & Amusement Parks
Clifftop Club at Auli in Uttaranchal, an RCI affiliate
HOORAY Hooray it's a holi holiday ... " Nowadays, the hoorays are louder, and holidays are more precious. There is much more to look forward to than Granny, and in distant shores, too. And as the time-share industry would tell you, it comes for a fraction of the price if you patronise it rather than not.
The industry is growing, globally (6 per cent) and in India (around 25 per cent), and has proven that it is really resilient to shake-ups, says Radhika Shastry, General Manager (India Operations), RCI India Pvt Ltd. Fatalism and optimism combine to keep this resilience going. Whether it's September 11 or SARS, people recognise life's uncertain, and want to make the best of it as long as they can. And having invested in a time-share, they will travel as they want to use the money they spent. And hotels across the world, including in India, are increasingly allocating a portion of their rooms to the vacation ownership exchange business because it acts as a cushion in hard times.
RCI claims to be the world leader in vacation ownership exchange, controlling over 85 per cent of the market. The other market player is Interval International. Of 3,700 resorts in 100 countries, RCI has 55 resorts affiliated to it in the Indian region, such as Club Mahindra, the Sterling and Royal groups. Two Le Meridien hotel properties and one belonging to the Orchid Ecotel group have affiliated themselves to RCI. According to Shastry, globally, all the major hotel chains including the Marriott, Hyatt and Hilton associate themselves with the industry.
The choice of destinations and exchange facility offered by this industry, which spurs international travel, make it grow. "A typical hotel is too business-like, too crisp. People now want value-addition, exposure and education from their holiday, and time-share resorts provide all this. It's aspirational," she says.
Says Steve Borgia, President & CEO, Sterling Resorts Ltd, which he describes as RCI's "blue-eyed boy" and one of its largest affiliates, "Holidaying is migrating from the concept of shelter to experience. Earlier, holidays and tourism were not linked." The tourism industry, as is borne out by Sterling Holiday, is looking at new destinations in smaller `prospects' closer to cities or towns to fulfil this thirst for experience. The time-share company is mulling opening up several destinations which will cater to a range of interests and combine some of those - nature, ethnic, historical and religious, to name a few.
Sterling recently opened a resort in Mahabalipuram in Tamil Nadu. Everybody's seen the sights in Mahabalipuram, but by moonlight? In a bullock-cart, sans beggars, sans the pressure of guides, in 15 minutes of total peace? This, he explains, is the value-addition the industry is bringing to the travel business. In Sterling's Swamimalai resort, one of the six abodes of Lord Murugan, the atmosphere tries to mimic a traditional lifestyle - as it's a pilgrim centre, the resort is vegetarian, those who work there are clad in dhotis, there's a sprinkling of deer and peacocks; yoga sessions, meditation, vada-making lessons, foot massages are some of the attractions. At $100 a day, foreigners flock there, says Borgia.
The company is also looking at Chettinad as a potential destination. Borgia says there are other places with great potential which are being ignored. Hampi in Karnataka, with its wealth of the Vijayanagara empire's ruins, Pulicat and Yelagiri, for instance. RCI's Shastry, in fact, credits the time-share industry with opening up some destinations, such as Munnar and Kumarakom in Kerala. Sterling uses RCI as a bait to lure potential members.
Says Vijay Srinivasan, Head (Marketing) of Club Mahindra, "We have been automatically enrolling members with RCI for the first five years as part of the membership entitlement." Roughly 15-20 per cent of Club Mahindra's 20,000 members opt to exchange their vacations to resorts through the RCI network both within India and abroad. Club Mahindra too benefits as its properties in the network receive an equivalent visit by inbound tourists from across the world.
RCI had surveyed 500 of its heavy-user member-families across the country last year. Destinations such as Orlando and Las Vegas emerged as the all-time favourites with Australia and South Africa fast catching up on the Indian vacationer's list of destinations. Shastry says Spain is a hot favourite too. Sixty-eight per cent of the respondents took one or two holidays every year. The middle-income group continued to take quick short breaks throughout the year in South-East Asian countries.
The study revealed there were takers for vacation ownership among CEOs of multinational companies, large local corporates and business entrepreneurs, which is a big shift from what was viewed as a holiday product only for the middle-income group. This new class prefers exotic destinations away from the hectic urban routines.
Within India, in the summer, the hill-stations are top draw; in the winter, it's the beaches. Twenty-six per cent of those surveyed indicated interest in hill stations primarily in Himachal Pradesh and Garhwal, while 19 per cent said they would like to visit Udhagamandalam, Kodaikanal, Munnar and Coorg. Twenty-one per cent expressed interest in the beaches of Goa and Puri. The hilly regions of North India continue to attract tourists from the South during winter because of the snow, Ms Shastry said. Auli, in Uttaranchal, is emerging as a ski resort in its own right.
The trend in domestic tourism is clearly growing, says Club Mahindra's Srinivasan. Families who have opted to committing themselves to a lifetime of holidays are getting more people to holiday and themselves holidaying more.
Srinivasan says most travel and tourism bodies focus on marketing to foreign business and leisure travellers or on outbound marketing efforts, but that the volumes do not justify the efforts and resources, which can well be spent elsewhere. For instance, while inbound tourists number approximately 2.5 million, with only half of that number expected to be leisure travellers, outbound tourists from India are estimated anywhere between six and seven million. In contrast, the domestic holiday business is estimated to generate nearly 30 million holidayers each year. "This is clearly an area that needs more focus and direction from all concerned!" he says.
Among foreigners, mostly Europeans and South Africans, Goa and Kerala continue to be the most popular choices. `Wellness' resorts with Ayurvedic massages on offer are a big lure, with even places in Rajasthan boasting of these facilities. This was another distinct revelation of the RCI survey. Twelve per cent expressed an interest in health resorts. RCI has affiliated a wellness resort near Kolkata, Vedic Village, to fulfil this need.
The international holiday travellers spent 40 per cent more than their Indian counterparts. Incidentally, Shastri says China is in vogue as a holiday destination. RCI has affiliated 21 resorts there, some of which are still being developed. Normally, RCI does not affiliate resorts which are incomplete but is doing so in this case to give the business a push, she says.
According to the survey, 37 per cent said they would like to go on a holiday in wildlife sanctuaries. RCI has a resort affiliated to it in Corbett for wildlife enthusiasts. It sees its members going to South Africa and East Africa for this kind of experience, says Shastry.
Ajit Bhawan, Jodhpur, one of RCI's heritage properties
Rajasthan was voted as the destination of choice in the survey. RCI now has two heritage resorts there under its belt (Ajit Bhawan Palace in Jodhpur and Fort Chanwa at Luni, about 45 minutes from Jodhpur city), and is looking for more such over the next two years. Kerala is a focus area, too, with Kannur and Kozhikode being RCI's interests. So are Sri Lanka and Nepal. Incidentally, RCI promotes the Indian monsoon as a tourist attraction in West Asia, which has the happy effect of filling resorts and hotels in what is usually a lean period.
RCI is also innovating with industry practices. Internationally, a time-share unit is a week in only one place but in India, members like to split it between two, and that is being allowed. Further, some affiliate hotels/resorts have begun to offer RCI points, which can be credited to a user's account for exchange at global destinations later.
The All-India Resort Developers Association's move to introduce a 10-day cooling-off period and refund a buyer who reconsiders his/her purchase of a time-share has also lent credibility to the time-share business, Shastry says, adding that `buyer's remorse' is very high in this sector.
Owning a time-share is more economical - with accommodation in local and foreign holiday spots coming for a "pittance", there is more money to spend on shopping and other things, says Shastry. Seventy per cent of the members rated shopping as the favourite holiday activity. Sightseeing, swimming and trekking were the other ones. Forty-nine per cent of the vacation owners are in the 36-50 years age group and 26 per cent in the 51-60 age group.
The survey revealed that nearly 81 per cent vacation owners spent a considerable amount of time planning their holidays as early as three months in advance. Shastry says resorts for Dussehra this year and those in Goa for Christmas next year are already booked. Got the time to take a holiday?
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