Obviously Pestana Vacation Club is doing something right. They’ve been in the business 25 years, building success upon success and accumulating thousands of satisfied owners during that time.

And although they’ve been in business for a long time, from the timeshare company’s outset in 1985 they’ve kept the same philosophy of creating fully integrated mixed-use hotel-timeshare resorts in Portugal and haven’t deviated from that – and it’s worked quite well for them. “It gives the consumers a peace of mind in knowing that they are being taken care of by the management of a professional hotel company while they enjoying the services and facilities of beautiful 5-star hotels,” Booth says.

Peter Booth

So as Pestana Vacation Club celebrates its silver anniversary, Perspective Magazine International Edition editor Matt McDaniel decided to interview Peter Booth, group managing director of Pestana Vacation Club, to talk about how the club started and what makes it so successful to this day.

What’s unique about your company?
What’s interesting with us is that we’ve been around a long time, so we’ve seen the good and the bad about this business. It helps if you’ve had that track record in the business and it’s helped us also the fact that in the beginning we came up with a philosophy of integrating our vacation clubs into our hotel properties and we stuck with that because it’s worked for us for the past 25 years. It’s helped us that we set out on the right course initially. I started the business back in 1985, so we have consistency in our management team: myself, our financial director, our operations director – these people have all been with us for 20 years or more, so we have a strong, consistent team of people that has been with us for a long time.

The other thing we really work hard on is our service approach – that’s what I would think sets us apart from many other resort operators in this business. When people come back to our resorts year after year, they receive higher levels of service than if they were staying with us for the first time. Because they’re a VIP client for us, they’re a loyal client. We have a file on each of our 26,000 owners, and before they arrive we go back and we look into what their needs and special requirements are. For instance, one time one of our guests left a comment saying he found the bed pillows a bit too soft. So the next year when he comes back, we’ve got to make sure that he doesn’t have to ask for firmer pillows again; they’re automatically there. We track each one of our 26,000 owners very closely, and we work on being able to fulfill and meet their needs. I think that’s why 50% of our owners come back and stay with us each year – which is quite high in this business.

You started Pestana’s vacation ownership division – tell me how you got started in the industry.
I was living and working in South Africa, where I was born and educated. Dionísio Pestana, the present chairman of the Pestana Group, and I both studied economics at university in South Africa where we met and became friends. We stayed in contact after university. Dionísio, who had gone back to Madeira in 1976 to work at the hotel that his father had on the island, invited me to come and join him in 1983. He and I discussed timesharing as a possibility. At the time Southern Suns Hotels, which was a large hotel chain in South Africa, was converting some of their hotels across to timesharing and we looked at that and thought that it was something we could build on the island of Madeira. We did our research and saw that Madeira had a lot of repeat guests and a good all-year-round season with no real high and low periods. Madeira was characterized by mainly 4- and 5-star hotels appealing to slightly more elderly profile of customer who tended to be in their 50s or semi-retired so they tended to have more leisure time than young couples with children. We felt those all added up to making a very good timeshare market and that’s what gave us the confidence to go ahead. We started off with 50 units as part of the 5-star hotel, which at the time was a Sheraton.

And that was the first timeshare in Madeira?
Nobody was doing timeshare in Madeira at that stage. In Portugal it was only ourselves and one other developer on the mainland at that time. But we were the pioneers of the mixed-use hotel-timeshare concept in Europe in those early years.

In contrast to the U.S., where the market essentially started with distressed hotel properties.

It’s been interesting, because at that stage in 1985, Pestana the group just had this one hotel and people forget that in those years – ’84, ’85 – interest rates in Portugal were like 26%, 27%. So timesharing in those years gave us the ability to be able to be less dependent on the banks and expand our operation, our hotel business, and makes some great acquisitions at a time when the cost of money was prohibitive.

So the timeshare division helped fuel Pestana Group’s overall growth?
Absolutely. In a period of 25 years we’ve gone from the one hotel to 88 today. The timesharing has fueled and been the catalyst for a lot of our growth.

Do you construct all your properties as mixed use?
We launched Madeira Beach Club in 1985 and haven’t deviated from that concept, we feel it makes sense for both ourselves and for our customers. We normally sell on a 30-year right to use – Madeira Beach Club is a good example; it’s now got a 25-year track record, we’ve got another five years to run on its lease and then we’ll refurbish it and re-market and sell it in three to four years’ time. We also give an option of a 15-year on some resorts.

The Pestana Promenade in Madeira, Portugal

But having said that, in Brazil we do have a vacation club that is a points-based club.

Because there we had a different concept – it’s more hotel accommodation that people are buying into because we didn’t build any purpose-built accommodation, we took an allotment of rooms from the 10 hotels we have in South America and we put that into a points club. We identified a different need for the Brazil market and developed a product that has been very successful there. To date we have 6,500 owners in Brazil, and we are doing more and more exchanges between Portugal and Brazil.

Tell me more about customer service at Pestana.
I’ve always believed wholeheartedly that if we were going to be around for the long term, it all depended on us giving a level of service that really exceeded the expectations of our owners. We honestly believe that our timeshare owners have to be treated as our VIP guests – because they are loyal customers, they come back and visit us each year. When they come back, they know what to expect from our service levels. We keep track of all our owners’ particular needs and requirements.

We have never been taken to court over a dispute with an owner. We’ve always been able to successfully manage the rare serious customer issue. And at the end of the day, if somebody wants out we’d rather give them their money back and bring in someone new who’s going to be an active Pestana owner and use the product, and recommend it to their friends and family.

What are the challenges for the business?
There’s the resale issue. We have our own resale program – we feel that we should take on that responsibility as a developer that’s been selling for the past 25 years. There are going to be people who for one reason or another need to sell their week. In our case, when you think of our age profile, many of our owners in 1985 maybe averaged 55 years of age. That person’s 80 years old today! We need to understand that maybe their needs have changed.

About 10% of the sales we do are resales, even if it’s less lucrative for us than selling our developer inventory. About 10 or 15 years ago, that wasn’t so much of a factor. But I’m comfortable with having our own resales department and that we do a fair amount of volume with it. At some point, we may need to look at increasing the number of resales we do as a company.

What is proving quite tough is to bring new talent into our business. That’s something we really have to work on because what tends to happen is the same people move from resort to resort, so as an industry we need to find ways to attract new talent because so much of our success depends on recruiting the right caliber of people and getting them trained to do the job.

Where else do you expect to open resorts in the future?
We’ve concentrated we’re we’ve got hotels, which tends to be resort locations. That would be Madeira, the Algarve and South America. Those are the three main destinations where we’ve really concentrated and I don’t think that’s likely to change in the foreseeable future.

What about South Africa?
We have a resort near Krueger Park and we have three resorts in Mozambique, but for the moment we haven’t entertained the timesharing option there – I’m not sure whether that might change in the future, but for the moment, they work very well as hotel properties.

You don’t add phases to your existing resorts?
No, because land here in Madeira is very limited and it’s very restricted. In Madeira it’s difficult to do that. We’re at our sixth resort Madeira, and the interesting thing about that is that in five years’ time we get back the original resort, Madeira Beach Club, with 150 units, when the lease expires. So we will go back and start selling that for the second time. The beauty of that is that you can go back to your old database – at Madeira Beach Club we have about 7,000 owners – so we’ll send a letter to them and market it to them to see whether they would feel inclined towards extending their lease, either for another 15 or 30 years. That’s quite a nice position. So hopefully that we’ll take some of our existing owners and with a very low marketing cost be able to get them to extend their lease with us.

You’ve seen a lot over the years obviously. What are your thoughts on the upcoming Timeshare Directive?
It has its good side and its less-good side. The good side is that it does make it more difficult for people with less-ethical interests to come into this business and it’s going to make it much more difficult for these holiday pack clubs to be able to operate. The less-fortunate side is it’s very hard for a new player to come into this business because the laws make it very difficult – to come in with the cost of getting into this business today by trying to build an owner base from scratch is very difficult. So there’s good and not so good. It would be healthy if we had new entrants coming into this business, but I can see that that’s not easy. Unless you’re a hotel group, because you need to have access to some fairly cost-efficient lead-generation programs. If we didn’t have our owner base to fall back on with our sales, it would be very difficult to justify the costs that you have to pay for bringing in first-time buyers and getting them to join up.

Peter, thank you for taking the time to speak with me. Before we finish up, is there anything else you like to say?

If you’ve been in the business a while and have taken care of your owner base as we have, it’s a great business, and it’s great to see these owners that come back year after year and write in the comment sheet how much they’ve enjoyed it and that they’ve had a great time. It gives me great satisfaction that after all this time owners have had 25 years of great vacations with Pestana.

Perspective Magazine Editor Matt McDaniel recently chatted with Darren Ettridge, Interval International’s vice president, resort sales and service for Europe, the Middle East and Africa. The one-time co-workers talked about how Ettridge got into the timeshare industry, what’s happening at his company, the Timeshare Directive and his favourite football club (and you’ll likely not guess which it is).

Perspective Magazine: How did you get started in the industry?
Darren Ettridge: In 1997, I started working for First National Bank in unsecured consumer lending as manager of what was at the time the holiday ownership department. Our role was to persuade existing timeshare developers and marketers to use our consumer financing for their timeshare purchasers. And so through my involvement at the bank, I started to understand more about the world of timeshare.

And you joined Interval International in 2000. How did the transition go?
It was a natural progression – you’re working with many of the same developer clients and marketing companies. It’s obviously a different part of the business, but the mechanics from a sales standpoint are very similar. And because I had existing relationships, it was an easier switch in that sense.

Tell me a bit about your position at Interval.
As you know, at Interval we serve two constituencies: our developer clients and our consumer members. The majority of our members have come through the means of either purchasing timeshare, fractional or private residence-type ownerships at one of our member resorts. A fundamental aspect of my role in Resort Sales and Service is to work with existing clients and their marketers to assist them in growing their businesses and ensure they’re very satisfied with the services we provide to them on a business-to-business level – products, training and technical support – which enable them to have all the facilities they need to enrol members with Interval. Another big part of what my team does with existing clients is listening to them as to how they perceive the market and provide them with our advice and assistance on key aspects of their vacation ownership offering.

Secondly, and as importantly, we are always looking out for new affiliates entering the industry and helping them to understand the many complex facets of our business. Prospective clients may be good marketers, for example, but not necessarily be familiar with the legal or finance aspects of vacation ownership. Or they may need help with product design or structuring their operations. It could even be someone with a green-field site who’s thinking of doing timeshare. We work with them all the way through to when they start sales and marketing, giving them comprehensive assistance. We often give them guidance and sometimes we connect them with experts with whom we have relationships. Either way, it’s exciting to be a part of the process that leads to their eventual success.

So are you enjoying your career?
Absolutely. I work with great people and Interval’s a very loyal company to be associated with. You worked for Interval; you know there’s a real family yet highly professional environment. You always want our CEO Craig Nash in the room with any client because he is so passionate about the industry – and that rubs off on you.

There have been some big changes at Interval. I believe the company is now traded on the U.S. stock exchange?
Yes, Interval Leisure Group, the parent of Interval International, is a public company that is traded on the NASDAQ under the symbol IILG. We became a stand-alone public company for the first time in our almost 35- year history in August 2008.

Tell me about some of Interval’s new clients, products and programs.
From my Resort Sales point of view, I’ve had great satisfaction in being a part of our growth in new markets for us, in particular Central Europe, southern Africa and the Middle East. In Hungary we have a really great relationship with Denes Pieke and his Holiday Club Hungary team, who kickstarted our whole move into that market with their support and advice. Southern Africa had historically presented us with a challenge until we teamed up with Southern Sun and they affiliated their network of resorts with us.

Since then we’ve gone from strength to strength and today we have a great springboard for continued expansion. In Dubai we’ve seen some highly successful affiliations and built some really worthwhile partnerships there. If you’d have asked me to look into the future a few years ago, I’d have been very brave to have predicted our success in these areas!

On the member side, in addition to offering new holiday experiences by continually growing our resort network, we’ve introduced a number of programs and products to enhance the membership proposition. For example, last May we launched ShortStay Exchange, a program that allows our Interval Gold members to holiday in shorter increments rather than the previously required seven-night exchange stay, regardless of whether they transact in weeks or points.

This provides a great deal of freedom and flexibility – and when members choose to take their holiday time in two- to six-night stays, it increases the perceived value of their vacation ownership purchase. It also means members may visit resorts that they haven’t previously, since they don’t have to commit to an entire week.

We’ve also enhanced our digital platform with the addition of resort ratings, a planning tool accessible at IntervalWorld.com. Members now have the opportunity to share their ratings and learn how other members have evaluated resorts. While it’s not new in the world of consumer websites, it is relatively new in the exchange environment, and enhances the member experience. I know that we will continue to look from the members’ standpoint, as we always have, at how we can best use new technology to assist them in better understanding how to maximize their vacation opportunities.

Switching gears a bit, what are your thoughts on the Timeshare Directive?
When I first joined the industry, the UK Timeshare Regulations had just been introduced, which implemented the 1994 European Timeshare Directive. A cooling off period and restrictions on deposits came into effect – and certain timeshare operators thought that it would be the end of the timeshare industry.

However, legislation has in many ways reinforced the positive side of the industry over the years, particularly in the area of selling practices. New provisions will be enacted in the near future with implementation of the Timeshare Directive of 14 January 2009.

These new provisions will require timeshare traders to provide enhanced disclosure information for consumers, which we believe will contribute toward increasing the confidence that consumers have in the product.

We support the changes that have gone through to date. They make for a better consumer-protective environment, which should be beneficial for everyone involved. At the end of the day, the vast majority of vacation ownership businesses that exist in the EMEA region today are legitimate companies that offer great products and customer service, and respect their members.

The Timeshare Directive will eradicate those individuals who can’t work within this legislative framework. For this reason, I’m very supportive of it. I am particularly pleased to see that holiday packs or longterm holiday products are now regulated.

What do you see for theindustry’s future?
I am genuinely optimistic about this industry. Recession or not, for the most part, people want quality, they want consistency, and they want to enjoy holiday time with their families and friends.

Many experts are saying that it’s going to take a bit of time until the financial world gets back on its feet, which may control the speed of the growth. But I am still a full believer in the many benefits of vacation ownership.

Is there anything else you’d like to mention?
I support West Ham United Football Club – always have done, always will do. Even though it might lose me great credibility wherever I go, I’m very proud to be a West Ham supporter.

An Interview with Denis Ebrill, executive vice president of Sol Meliá Vacation Club, about the company’s parent company, marketing in the United States, and what’s next for SMVC.

You’ve been at the helm of Sol Meliá Vacation Club (SMVC) for a year now. What has that experience been like?
Let me put that question into perspective. I started in this position on September 1, 2008. A week later it was announced that Fannie Mae and Freddie Mac would be nationalized. Two weeks later Lehman Brothers filed for bankruptcy on the same day that Bank of America bought Merrill Lynch. Before the end of that month AIG was bailed out by the Federal Reserve to prevent it from collapsing, all of which wreaked havoc on one of the key indicators for the vacation club industry – the consumer confidence index.

On a more personal level, I received a tremendous welcome from the Sol Meliá team and have enjoyed great support for our vacation club business from the parent company’s leadership. There were nuances to the nature of the business model that I had to learn along the way. But all in all, the structure and approach to the business was very similar to that with which I was familiar from prior experience. Probably the toughest aspect of the past year was having to cut back our operating costs, which meant losing some great employees. We went through some difficult decisions that resulted in some lay-offs within our organization. That is not only tough on those who are laid off, but also on those who remain, especially in a relatively small, closely knit team like ours. We had, and continue to have, a great team of professionals.

Hopefully as we climb out of the current economic slowdown we will be able to re-integrate back into our
team some of those that we were unable to keep.

How does SMVC benefit from being a part of such a large, well-known and long-lasting European hospitality company like Sol Meliá?
Our vacation club business at Sol Meliá benefits significantly not only from the brand awareness, but even more so from the credibility and trust that are associated with our company. It is a huge advantage in the
European and Latin American markets where the brand awareness is high, and those are essentially the continents in which we do most of our business. One of our goals as we grow into the future will be to increase the awareness of our brands in the United States and Canada, which continues to be where the
majority of our SMVC members reside.

On the operating level, our vacation clubs are fully integrated with our hotels and resorts, and share a common campus in every one of our current locations. One hundred percent of our SMVC resorts are mixed use, which allows us to consistently provide the full-service resort experience to our members regardless of
where they choose to stay within our network. While there are other hotel companies that also focus on the mixed-use model, they typically have a blend of standalone timeshare resorts and mixed-use hotel/vacation club resorts within their systems.

How does SMVC strengthen Sol Meliá’s global hospitality offering?
There are clear advantages to both the vacation club and hotel in the nature of the mixed-use structure that we have adopted. There are two examples that come immediately to mind as to how SMVC contributes to the success of Sol Meliá as a whole.

One, in tough times like those we are currently experiencing, the vacation club business as part of its in-house marketing initiatives can continue to provide personalized services through the concierge, guest service and activities staff while at the same time provide an opportunity for hotel guests to learn more about our vacation club products and facilities. These are the types of services that often end up suffering when hotel RevPAR [revenue per available room] starts to decline.

Two, the nature of the vacation club business is such that we strive to maintain a consistent flow of prospective buyers through our sales facilities. This means running lead generation programs that enhance hotel occupancy while providing tour flow to the sales and marketing teams. Even if the pricing of these hotel vacation packages is heavily discounted, it helps create more activity and atmosphere at the resorts and generates incremental spending at the hotels’ revenue-producing facilities. As you know, the vacation club business is highly intensive in the area of sales and marketing. We have great talent in our team and everything that they work on inevitably has a positive halo effect on the image of the brand and overall brand awareness, which clearly benefits the company as a whole.

What are SMVC’s strengths in weathering the economic situation affecting everyone in the industry right now?
Our strengths come from within Sol Meliá as a whole. The company has done business in international destinations for decades and as a result is accustomed to dealing with and responding to the economic volatility that comes with the territory. Sol Meliá is a solid, well-respected company with the know-how to confront the current challenges and a strong balance sheet to back that up. The hotel and vacation club teams work closely together to take advantage of synergies and to support each other’s initiatives whenever
possible.

As an example, we have worked with some of the traditional hotel suppliers to develop marketing programs that benefit the vacation club and at the same time increase hotel occupancy. We have been able to help specific hotels increase their market share by providing marketing support and by sponsoring events and activities that help build trust and credibility with the hotel guests, thereby supporting vacation club sales efforts.

SMVC is purely an international product. How does that make you different from other companies with U.S. based products and what they are experiencing right now?
We deal with most of the same issues as our competitors with U.S.-based resorts. In addition, however, we face a number of novel challenges as a result of the venues where we do business. These include, among others, a variety of different sets of labor legislation that has significant relevance to our operating costs, currency exchange volatility, different legislative jurisdictions and regulations relative to the vacation club industry, and an array of political and geographical considerations that can impact the public’s perception of the destination. Overall, our U.S.-based colleagues enjoy a higher degree of political and economic stability and for the most part have U.S. employees selling to U.S. customers. We have to develop multi-skilled teams that can handle a variety of cultures and languages. So finding the appropriate talent and ensuring that
the quality of the sales process is consistent with the brand image and the values of the company is a primary objective. We believe we have some of the best, most versatile teams in the business who have demonstrated their proven ability to produce effectively in multiple cultures and languages.

What are your goals for SMVC?
To establish realistic and achievable objectives, focusing on what is profitable and works within the framework of our company’s beliefs and values. We are committed to achieving a balance between the success of our vacation club business and ensuring a positive guest experience. We will not sacrifice
hotel-guest satisfaction to generate a vacation club sale. If this means lower volume and/or slower growth, then so be it. We will adjust our business to that model. That said, we will continue to grow and expand in key destinations and focus on the satisfaction of our existing members through quality facilities and quality service. We want to keep our members within our network, are acutely aware of the value of a positive referral from an existing member, and are hugely encouraged by the volume of new sales we see generated by existing members through upgrades or additional purchases. There is no greater indication of members’ satisfaction than to see them buy more of our product.

What are your most successful locations now and what’s ahead for SMVC by way of new product and development in the next five years?
Our newest resort is the Gran Meliá Palacio de Isora in the southern part of Tenerife in the Canary Islands, Spain. We believe it is the most stunning vacation club product in Europe today. We have been in sales for
approximately nine months and are excited to see the level of acceptance and interest our hotel guests have in this product and the rapid growth we have been able to achieve in sales. We have similarly spectacular resorts in Punta Cana in the Dominican Republic with The Reserve at Paradisus Palma Real and just outside of San Juan at the Gran Meliá Puerto Rico, both of which are performing well despite the current economic environment.

We also have a new project under development in the Playa del Carmen area of the Riviera Maya near Cancun, in Mexico, that will be a great addition to our network of resorts, and to the existing ME Cancun and Gran Meliá Cancun resorts in the region. We will continue to look to grow in markets where our existing members tell us they want to be. We will plan carefully for intelligent growth opportunities, taking advantage wherever possible of existing resort facilities and the possibility of distressed asset acquisition if it fits our long-term growth plan.

How do you think the industry will change in the next five years and how will SMVC be affected by that?
The change is already well underway. We see a narrower choice of marketing programs simply because of the need to ensure profitability. I think it will be a long time before we see the type of receivables securitization
opportunities that we saw in the past. That factor alone forces us to rethink our approach to the business and restructure our teams so that we can achieve profitability on operations alone without having to be heavily dependent on financing income to do so. At SMVC we will not chase sales and marketing programs just for the sake of increased sales volume. We have already streamlined or eliminated a number of our
operations with a higher degree of profitability in mind. It hurts and it takes a change in mindset, but we have an obligation to our parent company and to our shareholders to ensure the profitability of our ongoing
operations – and that is what we intend to do.

An interview with Roy Peires, chairman and founder of Club La Costa Resorts and Hotels, a company that is among the leading lights of timeshare in Europe and one that is, by its innovative and progressive approach, defining the standard and shaping the way in which its more than 50,000 members enjoy their holidays.

1. When did you enter the timeshare industry and what led you to do so?

From the age of 19, I got involved in the hospitality industry, in restaurants, and I might have stayed to build a business in that sector but for what I considered to be an even more interesting opportunity that came along. In 1984 I entered the timeshare industry in London and Spain. It began with access to a few units on the Costa del Sol, and as I sold these successfully I began adding more units and over time acquiring more resorts. And soon after this time I started purchasing a landbank on which to build new developments. This was done steadily and gradually to ensure growth was efficiently managed, but also to ensure financial stability and confidence and soon it was clear that Club La Costa was being appreciated by a growing number of satisfied clients.

2. Has your business strategy remained the same over the years or have you adapted it to changing holiday trends?

Today the company has 22 fully owned and managed resorts, with some 2,000 accommodation units in Spain, Tenerife, Austria, Turkey and the UK. This would never have been achieved without modifying our business strategy over time. Our business model has frequently changed to meet the ever changing marketplace. A defining trait of Club La Costa is its ability to respond quickly to trends and also to anticipate them. This is evident in the way that we have developed better resorts and different products, moving from fixed weeks to floating weeks to multi-destination points based clubs – and even our own yacht club. We are fortunate that, as a private company, we can react rapidly when appropriate and this flexibility keeps us competitive both as a business and in what we offer our owners and marketing prospects.

3. What pivotal moment or moments during the history of Club La Costa contributed in a major way to making the company what it is today?

In 1991 the UK economy was suffering, interest rates had gone through the roof and Club La Costa was forced to find new markets. This opened our eyes to the untapped timeshare markets throughout Europe including the domestic market in Spain, plus those of France, Germany and Eastern Europe. When legislation came in the mid 1990s (such as banning deposits), we reacted positively by launching our three-year trial membership which was, and still is a very attractive and popular option allowing new members to ‘test-drive’ our product. It generates large numbers of new members to our off-site sales centres many of whom like what they experience so they upgrade to full membership on their first or subsequent holidays. This two-step sales approach now prevails through all Club La Costa’s on and off-site sales operations with excellent commercial sales results.

4. What made you so passionate about the timeshare business at the start and what about it continues to drive you?

It was immediately apparent to me that timeshare is a fantastic product and an exciting one with so many possibilities. My enthusiasm has been evident in the way we have been able to diversify and reflect the changing holiday needs of our growing membership, driven by the desire to give our owners a holiday experience that not only lives up to expectations but exceeds them. It continues to excite me because Club La Costa always has something new to say. Standing still is not an option for us – like most successful companies, there is always the need for innovation. Of course, this also makes for good sales and upgrade possibilities too.

5. What are the tangible changes in the holiday experience for Club La Costa members?

We constantly look to increase the levels of luxury, amenities and service that we offer. Developing our own resorts has allowed us to include such things as private Jacuzzis on apartment balconies and quality branded white goods as standard, and we are especially proud to have developed a signature interior design based on our Costa del Sol California Beach resort that sees the use of modern, high quality materials and furnishings. And we continue to look at ways of raising standards. It is important to create excitement within each new project and even more so with the public’s access to and awareness of a vast array of holidays and holiday products via the media and internet. So we are meticulous to ensure we effectively communicate with our members, in order that they can see just what we are doing ourselves and how, via ’cross-utilisation-agreements’, we are also handpicking partner resorts that fit the Club La Costa model and increase the choice available to them. Also our continually evolving websites (member and corporate), and regular e-mail bulletins and printed materials play an essential role in this.

6. In recent years, Club La Costa has been characterised by rapid growth, adding new resorts and a yacht club, what other projects are in the pipeline that you can tell us about?

For a long time, it has been our objective to create a pan-European product to be enjoyed by families of all nationalities – adding new resorts and offering new and varied holiday experiences from short breaks in the British countryside to our luxurious sailing adventures aboard our expertly crewed catamarans. Now we are adding more destinations in the Eastern Mediterranean to cater for all our members including our growing Russian market. We are seeking further opportunities in many new countries with resorts planned for example in Russia, the Dominican Republic and the United States – as central Florida is still a top 10 destination for our core British market. In Europe we already have several new resorts at various stages of development at our Costa del Sol site, in Tenerife and in Turkey. Right now we have started construction in Spain of an exciting new spa and leisure resort, with the first 84 deluxe residences soon to be launched, as well as a new standalone resort, Rancho Santa Fe.

7. What prompted Club La Costa to move into the freehold property market?

It became apparent that some members, having ‘grown’ in their holiday expectations with us, desired to own a holiday home outright – but without the hassle of maintaining it year-round or leaving it empty most of the time. These members love and trust Club La Costa and for us it was a great way to satisfy our own marketing needs via a rentals programme. Developing resort homes this way allows us to ensure CLC standards of build and design apply, and spurred on by our early successes we have gone on to expand this programme and we are currently seeking new resort locations. Owners benefit from excellent leaseback guarantees and a ‘peace-of-mind’ investment.

8. In what way do you think you and your company excel above the competition?

We continue to sell because we are ready and willing to embrace change and seek out new opportunities. I know I need to expand and vary the holiday experiences for Club La Costa members around the world and at the most popular holiday locations. In doing so, we plan and succeed in staying one step ahead.

I believe that the timeshare industry is changing so that only the dominant major hotel companies and strongest independents – with great products and truly effective sales and marketing – will survive. Club La Costa will be among them. In the long term these changes are creating an improved industry with an ever improving perception of timeshare, and this can only result in more satisfied customers.

We see the big winners in the hospitality industry are those merging hotels and timeshare into one seamless operation; hence our plans for more hotel units to be developed at our multi-resort site near Marbella, as mentioned earlier, and also at our UK country resorts and elsewhere.

9. Having become an industry leader, is there still an ultimate goal that you work towards?

Yes. Not only do we want to establish a global network of timeshare resorts that will satisfy the hunger for quality holidays for our member families, but ultimately we want to serve them through our own reservation system; which, of course, we already do to a significant extent. In the future, all their holiday aspirations and needs will be satisfied within Club La Costa, it is what we are working towards. We know this is what our members want; it means they can rely on getting a true Club La Costa experience wherever they choose to go.

10. Finally, what are the most important factors in the successful development of your business?

Without doubt, the expertise and commitment of Club La Costa staff is, and always will be, a vital part of the company’s success. I believe we have some of the best people in the business working for us and the ethos and work attitude of the staff, from top management through to our cleaners and gardeners, is excellent.

One of my biggest challenges is finding more good people of the right calibre to work with us at all levels and in all locations. One thing is for certain, dedicated high achievers, will always do well in this industry. They can also be sure of a place with us and an exciting career. Of course, like the company itself, they need to be open to change and not stuck in a rut. Sales and marketing, like every other aspect of the company, is dynamic, adapting to market conditions. There is a lot of despondency being voiced in the holiday market, with airline collapses and the effects of the credit crunch hitting the headlines, but we are lucky, our members have shown they love holidays with their commitment to purchase with us not just once but again and again. They view their hard earned holidays as a priority and necessity, not a luxury.

An interview with David Clifton, managing director Europe, Middle East, Africa and Australasia for Interval International on his extensive worldwide experience in vacation ownership.

Tell us about some of the roles you’ve had in the vacation ownership industry and the challenges that you’ve faced in your career.

I’m very grateful to have had the opportunity to work in all aspects of the shared ownership industry for almost 30 years. I enjoyed being a developer and marketer during my days as Managing General Partner of Welk Park North (a joint venture between Welk Resort Group and Kemper Development) and Executive Director with Hilton Grand Vacations. And, I’ve thoroughly enjoyed working on the exchange side of the business for the past 12 years.

Having the chance to live outside of the U.S. since 1995 has been an incredible experience. While it took me a bit of time to recognize that the way I was used to doing business in the U.S. was not necessarily the best way to get things done abroad, I’ve learned to think out of the proverbial box to come up with creative solutions that fit each specific market. I’ve also had to learn as much as possible about all of the cultures throughout Europe, Middle East, Africa, Asia, and Australasia. I’ve found that while there are vast differences in each market, most people are fundamentally similar. Along the way, I have been blessed to discover so many new things and to meet so many incredible people.

What’s the best thing about living abroad?

Meeting people from different countries, learning about their customs and culture, and assisting them in their successful entry into our dynamic industry. It’s very rewarding to educate newcomers about what our business is and what it is not, and to help them become successful. It’s also gratifying to deal with the many seasoned professionals in each market who have been in the business for years, know the industry inside out, and are willing to share their understanding of local and regional cultures.

Dubai has been at the epicentre of the travel and tourism industry for the last five years. You’ve been in the unique position to have experienced the boom, the correction, and now its re-emergence. What’s it been like on the spot?

It’s been quite a ride … I believe I first visited Dubai in 2003 and moved there in March 2005. I was drawn to it by a number of things, including His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s vision for the Emirate’s future, the warmth of its people, quality of its resorts, great weather and beaches, incredible restaurants, substantial airlift, and high quality of life – all of which made for tremendous potential for shared ownership.

When I moved into my apartment across the street from the future location of the Burj Dubai (being promoted as the world’s tallest building upon its completion), I vowed on the first day of every month (or as close to it as possible given my travel schedule) that I would set up my tripod and photograph this building as it was being built. It’s been magical to watch history being made as it went from a pile of sand to a structure that is now over 160 stories tall.

During this same period, I’ve also watched Palm Island, and so many other world-class projects, take shape as the speculative real estate market soared to stratospheric heights before the global meltdown that took place last year. Dubai’s real estate market, like many others, has experienced a material pullback since it peaked in the second quarter of 2008. The days of investors queuing up for hours, if not days, to buy properties off-plan with little regard for price, are over.

Today, a far more rational and sustainable thought process is the norm in this market. Real estate prices are now much more affordable, which is great news for the shared ownership industry. In fact, Dermarr Real Estate just purchased 30 completed units in the Bonnington Jumeirah Lake Towers with an option for
20 more. Dermarr and Arabian Falcon Holidays (its marketing company) have been very successful timeshare developers and marketers in the region and are long time Interval clients.

The government is very focused on getting more end-users to purchase real estate in the Emirate and many officials with whom I’ve spoken recently recognise how important the shared ownership sector could be in meeting their ambitious tourism objectives. With most of the speculators out of the market, many developers are now looking seriously at our sector as a solution for the current oversupply of inventory, just as others have done before them in other markets around the world. In my opinion, the real estate correction in Dubai was necessary and it will be good in the mid- to longer-term for both the Emirate and for our industry. After all, Dubai continues to have not only all the attributes of a very appealing shared ownership destination that I referred to earlier, but it is strategically located in proximity to hundreds of millions of middle-class consumers who are prime customers for our vacation ownership products.

What are some of the key ingredients for success in vacation ownership today?

No doubt, they are qualified lead generation that is cost effective, being able to provide attractive consumer financing, and getting your overhead in line with your sales volume. In this economic climate, consumers continue to want quality resorts located in highly desirable destinations, but some are looking for more affordable purchase options than in the past. A number of developers are now creating shorter-term products that will satisfy this segment of the market. More than ever before, sales and marketing must be targeted in areas where qualified families live and/or where they vacation. Maximum results are achieved by
those developers with cost-effective lead generation and the ability to offer a strong value proposition and a consumer financing programme for the client.

I also believe the foundation for sustainable growth in the shared ownership industry starts with well-balanced legislation that benefits all the stakeholders (consumer, developer, and government). This is the primary reason why Interval plays a leadership role in global regulatory matters in most major shared ownership markets.

How has the industry changed since you began your career?

Shared ownership was quite a new concept when I got into the business. Most people had little real knowledge about what timesharing was back then. The majority of programmes being offered were quite simple: a fixed unit for a fixed week. The physical product was also very different. Most developments were conversions and there were few purpose-built quality shared ownership resorts in existence.

Developers in the late 1970s and early 1980s were all independents with a great entrepreneurial spirit, but with little, if any, historical industry knowledge to fall back on. Today, most hospitality companies are in the business and a number of independent developers have created their own brands as well.

The consumer too has changed. Satellite television and the Internet have helped fuel the appetite to travel the world and learn about different cultures. I think this thirst for travel is now unstoppable. At the same time, product quality has improved, programmes are more flexible, shorter-term products are being created, and many companies have adopted sophisticated target marketing and counsellor selling techniques. This is all in keeping with our industry’s ability to adapt and evolve in an everchanging environment.

What this all adds up to is a product that’s enjoyed by a wide spectrum of consumers all over the world.

Many in vacation ownership view the industry as more resilient than other businesses during difficult times. Do you agree with this view?

Most of us recognize that the global economic downturn over the past 12 months has been difficult on almost all industries and ours is no exception. While consumers have continued to purchase the product, it has been at a slower pace than in the past. Developers who have been dependent on receivables financing have been affected and have had to pull back on their sales and marketing. We’re hearing, however, that some lenders might be ready to re-enter the shared ownership consumer financing arena, which will be good news for us all.

Because the whole-unit real estate market has screeched to a virtual standstill in many locations around the world, we’re seeing these developers look to our industry, as they have done during previous difficult times, as a potential solution for their current whole-unit real estate woes.

Although we still face some tough days ahead, I would much rather be in the shared ownership industry than in the conventional real estate business today.

We’ve seen diversity in the vacation ownership product range with fractional resorts, private residence clubs, and condo hotels alongside the traditional timeshare model. Which do you see as having the biggest future growth potential?

Traditional timesharing will continue to be the dominant sector within shared ownership. But, we see opportunities for long-term sustainable growth in other shared ownership products as viable alternatives to second-home ownership. To capitalize on this value proposition, Interval formed an alliance with Preferred Hotel Group to establish Preferred Residences, a branded membership and exchange programme for luxury fractional resorts, private residence clubs, and condo-hotels. While sales of these products have also been impacted by current market conditions, we’ve recently affiliated several resorts with Preferred Residences,
have a number in various stages of the affiliation process, and are actively pursuing quite a few leads.

Your solo fundraising motorcycle ride “Cruising for the Cure” was a great personal achievement. What was the most memorable moment?

It has to have been meeting all the great people. I will never forget their kindness and generosity as I travelled 24,000 miles and visited 49 states last summer to raise awareness and funds for breast cancer research and treatment. It totally rekindled my faith in mankind.

And finally, for such a world traveller, where do you call home?

Although I’ve had a home at Aviara in Carlsbad, California, for many years, these days I’m very happy to call Dubai home.

An Interview With Jonathan Back, Managing Director of Group RCI UK & RCI Europe, on his new position and future plans for further development of the company’s products and services and his views on the future of the industry including a resurgence in all shared ownership markets

1. What does your position as Managing Director entail and what regions are you in charge of?

As managing director of Group RCI UK and RCI Europe, I am responsible for Group RCI’s European exchange business and its European cottage and villa rental portfolio for the UK consumer.

2. Coming from a financial background, what attracted you to the position of Managing Director at Group RCI?

The two factors that attracted me to Group RCI were its market presence and its people. Group RCI is the European market leader in both exchange and rental business lines, with the best pedigree and the greatest brand equity. It is a diverse and complex organisation with a variety of affiliates across the regions and I am looking forward to meeting with as many of them as possible to investigate ways of maximising our joint resources to offer the best possible holiday options and customer service to our owner/members. Working with the people at Group RCI is also a bonus for me. They have great integrity and consistently put the customer first. They are innovative, hard working and are resourceful and enthusiastic in delivering great and memorable holiday experiences.

3. What skills learnt from your previous careers are proving the most useful in your new role?

The keys to Group RCI’s success will always be in its ability to develop relationships, serve its customers and produce great business results for itself and its partners. I have always worked for sales and marketing lead organisations with both B2B and B2C channels. Those organisations have always been partnership businesses where consistently adding value and service quality were essentials.

4. In your first few months, what have been your greatest challenges so far?

My greatest challenges so far have been spreading my time between the numerous constituencies of the business and meeting as many of our partners as possible. So far, I have met many of our affiliates, visited most of Group RCI’s European offices and met many of its people. There are many more yet to meet and I thoroughly relish doing that.

5. Moving forward what are your short-term and long-term goals for Group RCI in the coming months and years?

My short-term goals for Group RCI are to enhance its customer and partner focus, further develop its product set and to set a course for accelerated growth. Longer term, my objectives are to open and establish new destination markets for our customers and members, to work with our affiliates to develop new products and business opportunities, to introduce our products to new customer groups and to constantly improve the overall level of customer and member satisfaction.

6. What do you think will be the main differences in the timeshare / shared ownership industry ten years from now?

The shared ownership industry is undergoing a great deal of change right now. All constituencies must work together to improve its reputation and quality. Personally, I’m very excited by Group RCI’s focus on innovation and hybrid products which are designed to deliver more flexibility to both members and developers, creating new lead generation and revenue generation opportunities. The next ten years will see a slower growth rate in leisure whole ownership and a resurgence in shared – both timeshare and fractional. It will see a clouding of the line between rental and traditional exchange products, with the success stories coming from consistent quality and value. Globally, improving living standards and an increasing premium for quality leisure time will afford our industry an enormous growth opportunity over that period.

7. Are there any new developments within Group RCI which we should be aware of?

We at Group RCI are working extremely hard to create a better future for our affiliates and customers. Our biggest innovation so far this year has been the launch of The Group RCI Rental and Exchange (R&E) programme, which has fantastic benefits for both developer and consumer. It provides developers with the opportunity to sell whollyowned, deeded properties with the add-on of a rental and holiday exchange component, using the scale of our operation to generate a reliable rental income for purchasers, as well as offering the bonus of a holiday through our exchange network. It is unique to the leisure property market.

Our new Owners’ Club is an extension of the R&E programme, whereby our holiday cottage owners deposit at least four weeks’ time into our exchange and rental network in return for an exchange holiday.

Our focus is on creating products, services and programmes designed to increase the choice of properties for our members and leads for our developers, as well as strengthening the offer at the sales deck. Ultimately, our strategy is to be pro-active in helping to grow this business for everyone involved.

We have also been working to strengthen member benefits with enhancements to Group RCI Points and by improving our member search process on www.rci.com. Members can now search for their perfect holiday using a filter system, starting with a map, to locate the resorts having all the amenities they might wish for on their holiday and the results will appear either on a Google map or as a resort listing. The system will be rolling out across Europe in multiple languages, ensuring a more transparent delivery of the Group RCI products, as well as being a faster and fun way to search.

8. In listening to the developers you’ve met, what has impressed you as the key messages?

The overriding messages, from Group RCI’s developers I have met so far, are the need to continue to add value to the developers’ business models and to provide superior member service and satisfaction.

9. What areas, from a product perspective, do you see as presenting the best development opportunities for the industry?

As developers invest in more mixed-use resorts to optimise sales potential, the products that will present the best opportunities will be those that offer the developer and owner the most flexibility and value add. The industry winners will be those with sales and marketing expertise, product range and depth and service quality.

10. In what ways do you believe Group RCI can help existing developers overcome obstacles to growth and expand their business?

Group RCI will help existing and new developers grow their businesses in a large number of ways. Needless to say we are the leader in scale, quality and experience in the exchange industry. We have unmatched access to resources, expertise and industry knowledge. We believe we have the widest range of products which will assist developers to grow their businesses during the decade ahead, irrespective of economic uncertainty and the ever-changing business landscape.

In change we see opportunity. And with the right partners, the right product at the right price, we see endless opportunities for our valued affiliates.

An exclusive live interview with David A Siegel, Founder, President & CEO of Westgate Resorts on his journey to creating the largest privately owned timeshare company in the world and billionaire status. Interviewed by Paul Mattimoe, Perspective International Ltd, at the Arabian Court, One & Only Royal Mirage, Dubai – March 2008.

Paul
David, thank you for giving us the opportunity to speak to you today. To start with, can I first ask what your background was prior to starting your first company?

David
Well, I have been working since I was 4 years old. I grew up in business and have been in various businesses. I was in the TV sales and services business, I was in the exporting business, I owned a gas station, I had a large furniture store. I had a store that was almost like a mini Wal-Mart at one time. It had furniture, appliances, TV. It even had a record department.

In 1968, during the Republican Presidential Convention at Miami Beach, riots broke out in Miami. My store was wiped out. At that point I went into the real estate field and for a couple of years, I worked in real estate in Miami and then in 1970 I moved to Orlando with my wife and children and no money, and went into selling real estate around the Disney area. Disney was a year from opening, so I saw the opportunity there. I am one of the few people in the world who was at the grand opening of Disneyland in Anaheim, California and at the grand opening of Disney World in Orlando, Florida.

I lived in California for one year in 1955 and they opened in the middle of an orange grove and I saw all this farm land around and years later I went back and saw that Anaheim had become a big city. I felt the same thing was going to happen with Disney World in Orlando. I had that insight that few other people had and I started selling and buying land around the Disney World area and I did quite well. I went from having no money when I got to Orlando to thinking about retirement by 1975.

Paul
At that time when you first started in Florida in 1970, was your vision for the future similar to today’s reality, the size that you are?

David
Actually I thought back then in 1970 if I could find a house and pay off the mortgage and have some money in the bank and have a few investments that could give me income and I would not have to work so hard, I would be perfectly happy. I did not have the grandiose vision at that point when I moved to Orlando, that I would be where I am today.

Paul
At that point you did not start with timeshare either did you?

David
No.

Paul
When and why did you enter into this market place?

David
Well as I told you, by 1975 I had done so well in real estate that I was thinking about an early retirement and I was making real estate investments with apartments and hotels. I even built the most successful small tourist attraction in Orlando called The Mystery Fun House which I built and operated for 25 years but at that time I built it and hired a management company so I would have a source of income along from the other investments I made, and one of the investments I made was an 80 acre orange grove next to Walt Disney World. In 1980 after basically living a very comfortable existence, I didn’t retire, but I really didn’t work very hard either because I was getting income from the orange grove, from the hotels and apartments and attraction. It was kinda like very comfortable and no pressure.

In 1980 a gentleman came to me and said he wanted to buy 10 acres of my orange grove and he offered me double what I thought the land value was worth and I asked him “What are you going to do with it?” and he said “I am going to timeshare it”. I didn’t understand, I said “What is timeshare?” So that was the first time I learnt about it. He explained the concept to me and I fell in love with the idea and so I didn’t sell him the property, but I decided to go ahead and build a timeshare resort in the back of the orange grove. I had a beautiful orange grove and I didn’t want to ruin the look of it in case this did not work.

So I started with 16 villas at the back. I had a small pond which I had some farmer come and dig out and make a lake out of it and not knowing the construction business, it took me almost 2 years to build the 16 units.

By December 15th 1982, we were ready for sales.

I had a dirt road going through the orange grove that the fertilizer trucks and maintenance trucks used leading back to it. I had no sales office so I poured a concrete slab next to my buildings. I put a tent on the slab. No sides on the tent, just the cover, and I put 8 tables and I hired 8 sales people and we were ready to start sales. The night before we started sales, I realized people were going to want to know where the club house and swimming pool were going to be, so I had an old real estate sign in my garage and I painted it white and I got some black paint and I painted ‘FUTURE SITE OF CLUB HOUSE AND SWIMMING POOL”. I am not a painter and the paint was running down the sign but it was too late to change it, so I stuck it in a pile of dirt across from the timeshare. It turned out that December 15th 1982 was a record freeze in Central Florida. My sales people came to work in ski jackets and the customers were all freezing. I brought in some kerosene heaters from the orange grove, and I set them around and that is how Westgate Resorts began.

Paul
In contrast, can you give us an overview of what Westgate Resorts is today?

David
Well today that 16 units is about 10,000 villas in 28 resorts in 11 States. All in the United States. We are the largest privately-owned timeshare company in the world. Interval International says we produce more new members for them each year than any other timeshare company. So, on that basis we would be the largest public or private timeshare as far as sales volume. Our competitors publish higher sales numbers so we would be the 3rd largest if you based it on the numbers they put out. Marriott and Wyndham are the two bigger than us. But they include residence clubs and fractionals and a lot of things, we are pure timeshare.

So we have been very fortunate, very successful. We have over 10,000 employees. It seems that every time I add another 500 units, I have 500 more employees. So we have 10,000 units and 10,000 employees. We are proud to say we are considered the Rolls Royce of the timeshare industry.

Paul
And you have another exclusive project coming up soon, Planet Hollywood Towers. Can you tell us more about that?

David
Yes. We have what is probably the best location of any timeshare resort in the world. We are right in the very centre of the Las Vegas Strip and right across from the $8 billion city centre being developed by MGM Mirage.

We are attached to a 170 store upscale mall which is attached to the 2600 room Planet Hollywood Hotel and Casino. There will never be another timeshare resort like it in the world. It is 50 storeys tall. Every unit is what I like to say, a high roller suite. They have every amenity. My competitors’ customers have to get into a taxi to go enjoy the restaurants, the shows and casinos in Las Vegas. My customers just have to take the elevator.

Paul
And when will that be completed?

David
It will be completed in 1 ½ years. Actually, there are 3 buildings. The first building will be completed in a year and a half. The second and third buildings will be under construction at that time. It is 3.2 million square feet and the shopping centre will be the second largest shopping centre in America. It is all blue glass. It is going to be the new iconic building in Las Vegas. As the plane lands, as it is taxiing to the terminal, you look out your window, and that is what you will see. It is breathtaking. It is going up a floor a week as we speak and we are up to the 36th floor, maybe the 37th as I have been here in Dubai for a week.

Every one of our resorts we build to be the largest resorts in the world. Two of my resorts are Number 1 and 2 in the world in size and a typical one of our resorts is 1000 units. My first flagship resort, Westgate Vacation Villas, the one I started behind the orange grove, that one is going to be over 5,000 when we run out of land and approvals – just that one resort. We have Westgate Lakes, which was my second resort, it currently has 1500 villas already sold out and we are adding another 2500 villas. That ultimately will have 4,000 villas. When you think that the typical timeshare resort is 100 villas you see how we tower over our competitors.

Paul
Your activities, certainly in timeshare are immense. But if we can move away from that just for a moment, that is not the only industry you are involved in, is it?

David
Primarily, but we still own hotels, apartments. We used to be involved in retail but we sold our retail involvement. We own restaurants and we are in the insurance business. We own the world’s only timeshare dude ranch. I am trying to think what other industries – we still do some real estate business. I own the real estate company that put all the Disney property together for them some 40 years ago.

Paul
What would you say has been your greatest achievement over the past 38 years or so?

David
Well, my greatest achievement would have to be building this company from a one man operation myself to over 10,000 employees and I have to say, the thousands of success stories of my employees. I have made dozens of millionaires in my company. I have people with me that started back 25 years ago who are still with me.

One of my employees, my Executive Vice President of Sales and Marketing, Jim Gissy, became a multi, multi millionaire being with me. He was so appreciative that about 3 years ago he called a meeting of all the Managers in the company. We had about 200 Managers at that time, and they brought their spouses or other half, and we had a big meeting for about 400 people in a ballroom of a Disney World Hotel which I owned at the time, and he made a motivational speech to everyone thanking them at Christmas time and he was thanking them for a great job they had all done, and then at the end of his speech he said “now I am going to do something that I am sure has never been done before”. He said “I am going to give my boss a present which I know he would not buy for himself” and then the Rocky music started playing and the walls opened up and in the next room underneath a big chandelier, was a brand new Rolls Royce Phantom that he gave me as a present. Just to show his appreciation of being so successful for being with me. I don’t think it has ever been done before. I have never heard of it.

Paul
Or ever again, probably.

David
I take a lot of pleasure … people ask me why I still work. I have achieved, more than achieved my goals. People ask why do I keep traveling all over the world looking at resorts and it really has to do with, I get a lot of pleasure out of these success stories of the people who work for me and for that reason, years ago I set up the Westgate Resorts Charitable Foundation and there are two parts to it. One part of the Foundation we help over 100 charities in the cities where we have resorts, and the other part of it is that we are a safety net for our employees.

No matter what could happen to one of my employees, if they are not covered by insurance, or by some other agency, we are there for them. My employees know that and it is a good assurance that they have, they know that they will be taken care of. I treat everyone like family and they know that if something happened to them we are going to be there for them. Just to give you an example, one of my employee’s sons was failing school because he had a hard time hearing. So the Foundation bought him hearing aids and now he is making straight A’s at school. Another example, another employee had a child that was very sickly because he had a hole in his heart and we
sent the child on an air-vac to a hospital in Cincinnati, a children’s hospital, and they operated on the child and today the child is doing fine. So we have helped a lot of people.

We have helped bury employees’ family members. Just whatever problems they have. During tornados we put them up. 3 years ago when we had hurricanes come through Central Florida, one right after the other, which was unusual because Central Florida had never had a hurricane before and we got 4 in one year, I actually had 1500 of my employees staying in my resorts free of charge until they could get their homes put back together. So they know we are for them and that is why they are very loyal and they look out for me as well.

And of course we help all these other charities, children’s charities and I don’t think we ever met a charity we did not like and we are constantly being asked to donate. I donate a lot of money to this one hospital in Orlando and last week one of my employee’s son fell off his bike and hit his head on the kerb so hard, he had a helmet on, but it split the helmet in half and she was on her way to an emergency room with him, and who knows how long you wait in an emergency room, so I picked up the phone, I called the President of the hospital. She was treated as if the Queen came there, they took her in, and they took care of him. So that is the kind of things we do. I am proud to be able to do it.

Paul
Absolutely. It is outstanding. In contrast, what have been your greatest challenges on the way?

David
Well, my whole life hasn’t been straight up. I have had a lot of external things happen through no fault of my own that have caused me to be like on a roller coaster through my business life.

In 1961 I was in the TV business, I was doing quite well, I had a new home, I had a brand new car. My first wife just had our first child and I got called to active duty in the air force. That was when they built the Berlin Wall and President Kennedy activated all the reservists. I never went overseas but I was on active duty stationed at an air force base and I came back a year later. When we got released I had no business, my home was foreclosed on and my car was repossessed. My credit was shot and I had to close up my business and I opened up another one and borrowed money. Within 6 months I was doing better than I had ever done before in my life. I know business; I know how to grow a business and my wife had our second child.

Next I go to visit her in the hospital the day after the baby was born. This was July 11th 1963 and one of the customers came in and shot and killed my store manager. So I am out of business again. But I started again and I built up what I called a mini Wal-Mart and then what happened 5 years later, I am doing fantastic and the riots happened and I am out of business again.

Then I come to Orlando in 1970 with no money and I built up a huge business – by this time I am on my second wife and, unfortunately, we went through a very nasty divorce in 1997 where she basically said that she was going to destroy the company if I did not give her what she wanted and she had the power to do that because I needed her signature on every loan that we made and this business is built on borrowing money. So at that time I had 5,000 employees and rather than seeing those employees all out of work, I gave into her and actually gave her more money than what the company was worth. All I had left was my ability to make money and so that was a challenge.

At the same time I had a renegade executive that decided to start his own competing timeshare company and told all of my top ranking managers I would be bankrupt in 6 months after paying that divorce settlement. So 26 of my managers all left with him and so that was a challenge but in the last 10 years we have had the greatest growth we have ever had in our company. So now everything I hope, all the challenges, are behind me and the only business challenges we have today are the increasing cost of construction, the increasing cost of land, of sales costs, marketing costs, but we deal with them and we just have to tighten our belts and watch everything we do.

As a private company we can make decisions on a dime which helps us, so if things get out of line we can bring things back into line very fast. If I didn’t read the newspaper and watch TV, I would think that the United States is going through the greatest economic boom in history. We had a record year last year and we are already up 36% over that this year, so I owe it to a great team of employees, and also a great product that we produce that obviously people like. We only have one chance to make a good first impression and I think that the product we produce definitely makes a good first impression when they see it.

Paul
I read, when I was looking into Westgate before this interview, that back in 1996 you were a candidate for Entrepreneur of the Year. How did you do?

David
I became the Entrepreneur of the Year for Florida and went on to the National Contest in Palm Springs, California and I came second in the whole country and was very proud of that. I lost out to a gentleman that had big office parks all over the country and I thought, what am I doing here? I didn’t feel bad about not winning because this guy was so far larger than me, and to come in second in a country the size of the United States…but I did win in Florida and, in fact, they asked me to be the MC of the next Entrepreneur the following year.

Paul
What do you contribute your huge success to and what pieces of advice could you give to the latest generation of entrepreneurs?

David
There are 6 steps to success and I like to tell people that if they follow those 6 steps they can be successful. I didn’t have any prior …, I didn’t graduate from Harvard or the Wharton School of Business… The first step I think is get a good education. My education was more on the street, I have streets smarts where I don’t have book smarts, but whatever business that I ever got into I learnt as much as I could about that business and became, what I call an ‘expert’ in that business and when people are considered experts other people seek them out and you get lots of opportunities, so my first bit of advice – get a good education.

My second would be – don’t be afraid to work hard. If you want to have a 9-5 job, 5 days a week and there is nothing wrong with it as most of the world do that, except in England where they work only 37 hours a week and 4 weeks vacation every year, which I just found out when I was over there… Do not be afraid to work hard. You have got to do whatever it takes to get the job done and be the first one in and the last one to leave basically.

The third thing that you have to have is you have to be lucky. But there are ways of being lucky. You have heard the saying “the harder you work the luckier you get” and there is a lot of truth to that. It is not just sitting in your living room in front of the TV hoping the Brinks plane is going to drop a bundle of money out of the sky into your lap, it is getting off your tail and getting out and doing things and going to meetings, meeting people and going to charitable events. It is being at the right place at the right time. And that is what being lucky is and that is why I go to these seminars, that is why I travel around the world, that is why I meet thousands of people every year and this is where your opportunities are, this is where your chance of hearing about a situation will come in.

The fourth one is being different. You have to be different. There will be a 2 lane road and you will see people all pull up in 1 lane and the other lane is empty. People typically are like sheep and they follow the leader. You have got to be the leader. Just because it has always been done this way, you don’t just keep doing it the same way. They say insanity is doing the same thing over and over again expecting different results. You have to be different. If you are working in a company you have to toot your own horn.

I have a lot of employees who go to work every day and they do a good job and I don’t know about it because they don’t tell me about it and I don’t hear about it. People think being humble is the way. Sheep are humble, you have to stand out, and you have to make yourself known. If you do a good job let everybody in the world know about it. Eventually it will get to the boss and you will get a promotion, you will get a raise and so be different. Don’t follow the same mode. Basically 99% of the population is probably not happy or not making money or in poverty and maybe that top 1% is where all the successful people are and that is because if you look at them, they are all different, like the Donald Trumps, they are kind of arrogant, and self-centered, but still a lot of that is what it takes. Maybe you don’t have to be a real arse, I like to think I am a nice guy, who treats his employees good but still I don’t consider myself one of the crowd.

The next thing, and this is probably the most important thing between being successful and being not successful, is that you have to be willing to take a risk. Every time I went into business I laid everything I had on the line. I was willing to take the risk, you cannot play it safe. It is like in sports. The guys that play it safe don’t score the goals, don’t score the touch downs, you have to take a risk, you have to be willing to play it on the line.

But there is calculated risk. If you do all the things I just told you about, you can narrow the risk a lot because you know what you are doing. I might say take a risk and you might take everything you have got and take it to the casino. That is not the sort of risk I am talking about, I am talking about risk where you know you have done your homework and now you are ready. You have confidence in yourself and you are ready to lay it all on the line.

The final thing, and I guess the most important of all, is never quit. You have to be like a bulldog, you have to sink your teeth into whatever you are doing and just don’t let go. Never quit. Too many people quit too soon and they never make it and you know what, 5 out of the 6 won’t do it. Look at my story, I could have quit so many times when I lost my three businesses. I could have found reasons to go home and pull the covers over my head but I didn’t. In the timeshare business I almost went broke a year after I started. I did my homework but I had no idea how much money it was going to take to fund this very hungry animal and I ran out of money and interest rates went to 21% and they had oil embargoes, everything happened and yet I didn’t quit, I just kept plodding ahead until I became successful.

Paul
Very valuable advice. Looking forward now. How do you think the timeshare industry will evolve over the next 10 years, or the timeshare product?

David
Well the product I think is pretty close, at least my product is pretty close to where it is going to be. I can see maybe it getting a little larger, maybe instead of the standard being 2 bedrooms it might go to 3 bedrooms but the quality I think is pretty close to where it is, but I think the industry is in its infancy, I think it is going to continue to grow for ever. I think the fact that every major hotel chain in the world is now in the timeshare business shows that they know that the trend is for people to stay in condos not in hotel rooms and even the hotel rooms are getting larger, so the days of a husband and wife vacationing in a hotel or motel with 2 double beds and a little TV on the dresser and one little bathroom are over. When people vacation like that, they get home and are ready for another vacation.

Since 9/11 the whole thinking of the population has changed to where people used to say “well we are going to live for ever and some day we might think about owning a timeshare”. Now it is “we don’t know how long we have, if we can afford it, we are going to go first class …” and that is in spite of all the terrible economy right now, that is why they tell me I have not experienced it myself. We are up 36% so far this year and we had a record year last year and we have never had a down year. From the day we started in timeshare 25 years or 27 years, 26 years ago now, we have been up every year except in 1997 when I went through a divorce and we had a flat year then. It is pretty hard to grow when your wife takes all your money. Ever since then we have been straight up and the timeshare industry as a whole has also been straight up every year since it started. They are growing about 15% a year, we are growing about 25% per year and this year we might even be better.

Paul
And finally, can you reveal any exclusives about upcoming projects?

David
Well I will tell you that we would like to grow 2 or 3 resorts a year. We have slowed down a little bit because the Las Vegas resort is so big. The Planet Hollywood Towers by Westgate, which is its official name, is costing $1.2 billion and in addition to that at our other 27 resorts we have a $1 billion in construction going on right now, so we are growing internally at every resort. We are looking at Mexico, we are looking at Dubai, we are looking at California. We are doing a resort in Anaheim, California looking down on Disneyland, and we are looking at Hawaii and we are looking at the Caribbean. But I cannot come out and tell you exactly where it is because we are the leaders in the industry and as soon as Westgate says we are looking at a certain area, all my competitors will try to get there before I do.

Generally those are the places we are looking. We are looking at several locations on theEast Coast of the United States, and we are building a big base out in the west part of the United States so from that we can jump off to Mexico, Hawaii, places like that. Maybe even Canada. It is a big country, a big world, a lot of great opportunities waiting.

I am very impressed with what Dubai is doing; it is just such a long distance to go. We are probably going to, if we do something here, look for a joint venture partner that is here, that we can work with and eliminate the learning process. You know everything is built on connections so going to a new area, not knowing the terrain, not knowing the people is rather short cutting it a little bit, make less money but have less work and less aggravation. We have built up a most incredible expertise in the industry. We have the best trained. Every standard that the industry standards, we exceed, every one of them.

This is because we have people that have been with us for years, we have gone through all the mediocre ones and they have gone and what we have left over are the best of the best. So our standards are very high. I anticipate us growing quite rapidly because we have that infrastructure already in place and we keep getting better and we keep coming up with new programs and, again, a lot of it is because we are a private company. I like to say that every morning when I shave I have a Board of Directors meeting, so we can make instant decisions, whereas our competitors, they have to have Board Meetings and they cannot turn on the dime like we do and this is a business where it is very vital to be able to make instant decisions and that is basically what I do every day, I put out fires and I make decisions that make us more efficient.

Paul
David, thank you very much for giving us your time for this interview.

David
That is all? I was just getting started!

Paul
Yes, that’s it.

David
Well let me just add one thing. Anyone that is thinking about getting into the timeshare business, whether it be a developer or a person that is just starting their career in the business, I cannot think of a better industry in the world today than the timeshare industry. As I said, what other industry can you name that has gone straight up year after year after year. You cannot say that about the automobile industry, you cannot say that about the airline industry, so it is a great place for people to start out their futures
and it is a great place for developers to get involved.

It is very expensive to get into though. It is not cheap, you have to have a lot of money or you have to have a lot of credit. The nature of the business is the people will buy and put down a small deposit that does not even cover your sales or marketing or construction and then they finance it, in our case over a 10 year period, so we have to lay out a lot of money and we get it back over 10 years. We are more like a bank than a real estate company. We basically service mortgages and collect payments and charge interest and all that just like banks do.

This industry is made up of so many components. It is not just selling, it is servicing mortgages, it is construction, it is management, you not only are managing the sales effort, it is managing the resorts, it is decorating, it is finding the land, it is maintenance, it is like you are in the hotel business, you are in the resort business, you are in the people business, you are in the banking business, you wear a lot of hats.

Purchasing – we spend a couple of hundred million dollars a year just on purchasing products. Whatever money we make we earn it. But it is a great industry and I am more than happy to be in it. I have done quite well in it, and I am looking towards a future. I plan to die at my desk.

I retired when I was 50 years old; I finally said “I am retiring”. I have achieved everything I want to achieve. That lasted for 6 months. My biggest failure in life – I failed retirement and I said never again, so now I tell everybody if you see me dead at my desk, just push me aside and get someone else in there to run the company. My mother is 99 years old so I know I have good genes and my mother, until 2 weeks ago worked 4 days a week. So you are supposed to outlive your parents, so hopefully I will be the first 120 year old timeshare developer.

Paul
So I will look forward to interviewing you again then, then?

David
On my 100th birthday you can come in and interview me again and ask me what my goals are – save the cover we will do something with it!

An interview with Alain J.A. Grangé, Chief Executive of Sol Meliá Vacation Club and President & CEO of Luxury Leisure Properties International and Grangé Group. Grangé has an extensive background in developing and operating international developments across the globe.

What steps did you take in your career to become an expert and specialist in international shared ownership and leisure properties?

I came to this industry in a way that is much different than most people, having worked in the luxury palaces of Europe, luxury branded hotel companies worldwide, country clubs, real estate and mixed use communities. In the early 80s in Europe, I worked with hotel owners to help them maximize their assets, recover capital and continue healthy hotel operations. It appealed to my marketing sense to combine hotel expertise with that of the membership and real estate industries to create a very unique, global niche.
In my endeavors, I have long followed the mantra of “Glocalization,” or a global vision and strategy with local knowledge and execution. One should always remember that in one part of the world one thing has a certain meaning, but in another part of the world, it might mean something entirely different, or in other words, “the same is the same, until it’s not the same.” When playing on an international field, it’s important to know which game you are in, as well as how it is played, just as in the vast differences between US football and international football. Developing internationally not only requires specific research and planning, but also international skills, a special mindset and patience.

I’ve always used the formula of international development taking twice as long to implement as in the U.S., and that is after having the right leadership and people in place, in the right positions. It’s key to rely on local experts for guidance to establish realistic timeframes for all the necessary legal, financial and regulatory aspects of doing business in a destination. I’ve learned that success abroad is ultimately only as good as one’s roadmap and the team in place to implement it.

When you became Chief Executive of Sol Meliá Vacation Club three years ago, did you envision this branded product and vacation experience to achieve so much in such a short time? What do you think were the catalysts to drive these results?

Yes, I knew that when I selected Sol Meliá as the company with which to execute this very targeted business model that it had the ability to exceed expectations. As one of the very few globally branded vacation clubs, we started off very strongly with the name, organization and clear responsibility to develop and execute a product that exceeded high standards of service and quality. The key was that the company was committed to support the project. The breadth of the company and its hotels on an international scale also provided the perfect place to take club membership to a level so that it becomes a leisure lifestyle, rich with experience and options that can adapt and be enjoyed by members for a lifetime.

Solid financial results have built a strong foundation. We’ve been profitable since our first quarter of business in 2004 from vacation club sales, member and network operations, rental and Club portfolio. Since that time we have opened 12 international home resorts in Europe, Mexico, the Caribbean and Central America, opening 3 to 4 resorts every year, and we have consistently achieved record sales and some of the highest operating margins within the vacation ownership industry. Sol Meliá Vacation Club achieved a revenue increase in 2006 of 86 percent over 2005, while also reporting a 2007 increase of 44 percent over the 2006 revenue number. At the end of 2007, we celebrated a banner year with total revenue of $130 million, an EBITDA of over $50 million and more than 23,000 members worldwide. We’re extremely proud of the fact that The CLUB has made a net contribution of more than $400 million to Sol Meliá’s Hotel Division during its short time in business.

Our tremendous success is owed, in part,to widespread success of new projects in Mexico, Puerto Rico, Spain, the Dominican Republic and Central America, and the launch of a new deluxe 4-bedroom villa product which is marketed and sold as a multiple weeks product. In 2007, The CLUB opened new projects at ME by Meliá in Cancun, Gran Meliá in Puerto Rico, the Paradisus Punta Cana in the Dominican Republic and Meliá Gorriones in Fuerteventura, Canary Islands, Spain. Additional successful satellite preview centers were also opened in Europe and the Americas.

Why are you so passionate about the global shared ownership and leisure properties market?

I have always been very passionate about creating a quality product that is a perfect fit for the consumer, with the right destination and the right markets. Delivering a quality experience from day one is a big part of it. I’ve been very fortunate to have had tremendous success in creating teams with a willingness to venture forward with passion, dedication and focus on a global vision. I’ve seen the difference it makes in conducting business internationally in a fashion that makes others respect and want to work with you. With an entrepreneurial spirit embracing culture, language and local traditions all along the way, it’s always an exciting and profitable adventure.

Additionally, for hotel and hospitality companies, this business creates the best long-term loyalty program for them. It enhances the natural synergies between the businesses while increasing the growth and profits of many of the hotels’ operations. It’s a great win-win situation for both the company and the consumer.

An example of a passion for cultural understanding can be found with Sol Meliá’s Vacation Club in Puerto Rico. Even though the destination is geographically located in the Caribbean, the local residents, who make up the majority of the main membership base, demand a product that is sophisticated and conservative in appearance. They look for a certain interior feel, quality of furnishing and décor in their accommodations. While on the neighboring island of the Dominican Republic, the product is much different and has more of a tropical beach-like appeal and a membership base that is from both the US and Europe. The expectation from this group is that the product should look and feel like a Caribbean fantasy. It was our understanding of local heritage that quickly brought the cultural differences to the forefront, making sure that the right product was provided for the right destination and the right consumer. This has been one of the keys to SMVC’s strong start and ongoing success in these and other locations.

What are the goals for Sol Meliá Vacation Club in the next five years?

Sol Meliá Vacation Club continues to focus on its vision to be a pre-eminent global provider of exceptional leisure lifestyle experiences for its members, while moving to the next stage of development with The CLUB by Sol Meliá. Objectives are to achieve further success in brand penetration and expansion, as well as maximization of occupancy levels. The mission is to build a Global Club that will be a leader in its field for brand quality, customer satisfaction and employee pride, which will be delivered through customer focus, ethic, integrity, teamwork, communication and continuous improvement. Latin America, the Caribbean and Europe will continue to be growing areas for Club Member resorts. We currently have three large exciting projects in development in Tenerife, Canary Islands, Spain, the Riviera Maya area in Mexico and the Dominican Republic. My hope is that The CLUB will keep growing and evolving from its original foundation
of success.

What are your expectations for the international shared ownership and leisure properties market within the next five years?

The international shared ownership industry is poised precariously between those looking for short-term profits and those with ethics and integrity, seeking long-term benefit for all, including long-term relationship with its members. I strongly believe that if outside the USA the mistreatment of the consumer and the non availability of product backing the memberships continues, and if the international industry organizations do not start policing it, stronger punishing legislation will take place.

I am hopeful that international developers will seek the true benefit of building long-term relationships with their customers and members, rather than having a short-term view of that relationship. Short term strategies do not work. The formation of these long-term relationships with consumers is the catalyst to providing an experience of a lifetime. Members and developers alike reap the benefits of true mutual long-term loyalty for all.

Making a true difference lies in a well laid plan, which generates long-term financial stability and loyal customers. In conclusion, our industry needs to create a menu of “experiential” moments for its members based on a well-working system backed by quality real estate and product, for the benefit of all involved.

An Interview with Howard C. Nusbaum, President and CEO of the American Resort Development Association on how ARDA has helped shape our industry over the years and its continuing efforts to promote timeshare as a mainstream hospitality product.

What is your background prior to your appointment to President and Chief Executive Officer of ARDA?
I spent ten years with American Hotel & Lodging Association in various roles including Vice President of Corporate Relations for the AH&LA as well as Executive Vice President of the Ohio Hotel & Lodging Association. Prior to my hotel association experience, I was VP of Sales and Marketing for Janus Hotels and Resorts, a national hotel management company.

What differences and similarities have you found working within the timeshare industry with ARDA compared with the hospitality industry at American Hotel & Lodging Association?
Of course there are similarities between the two industry associations since both are advocacy oriented groups and both focus on travel and hospitality, but the two industries are also very different. The Hotel industry focuses on yield management and resort operations. The timeshare industry has many facets beyond resort operations and yield on rentals of guest accommodations. Resort operations are key to delivering on the promise of better vacationing; however, the timeshare business is seen by many as a sales and marketing business, and many others might argue that it is a financial services business. Additionally, the highly regulated state by state real estate laws coupled with complicated and important use-plans make timeshare a very focused real estate business with great attention to legal and regulatory framework.

We understand you have won a number of highly prestigious awards from the Educational Institute. What were they for?
I had the honor of working closely on the development of several hospitality training programs. The spirit of hospitality training and the need to make sure that the employees who touch our customers understand their role in creating a positive guest experience is an inspiring journey. I was lucky enough to be in the right place at the right time when EI was focused on this front line training. It was a privilege to co-develop this training as well as some welfare-to-work vocational training. Nothing is more motivational than the chance to help people understand what a difference they can make – one person at a time.

Since you joined ARDA in 2000 what has been your greatest achievement?
One of the things I am most proud of is working with ARDA volunteer leadership to mainstream this once niche industry into the larger world of hospitality and tourism. For too long, timeshare and other vacation ownership products flew under the radar of the larger tourism industry. Today, I believe ARDA and the industry are seen as important and influential partners in both the world of travel and tourism and the world of real estate. What makes vacation ownership so interesting is that we have a foot in both industries (real estate and hospitality) – we are travel product with real estate as the centrepiece and integrity of the product. Helping the industry take its rightful leadership role in both these worlds has been a very rewarding experience.

ARDA covers approx 99% of the US timeshare market. Do you plan to extend your reach to cover fractional / residence clubs?
ARDA has both a traditional timeshare segment membership as well as a fractional/ PRC membership. As far back as 1987, ARDA was publishing fractional research. I realize that the two products have different development business models and marketing practices; however, from a legal perspective – dividing interests in real estate is the same no matter the size of the interest or the duration of the use plan or the amenity level. ARDA has always served both segments. I am proud of some of the new benefits we have created especially for our fractional members as we recognize the differences in the products and the consumers they serve.

What goals are ARDA currently working towards? In addition to our on going mission of advocacy for vacation ownership at the local, state and federal level, I believe that the new PR initiative ARDA is working on will be a real turning point for the industry. ARDA is working to “recolor” the word timeshare to better reflect its contemporary product offerings and consumer-centric marketing. Furthermore, we are working through this initiative to move timeshare and fractional media coverage from the real estate investment pages to the travel and tourism pages. I long for the day when columnists quit saying that timeshare is a bad investment. Vacations are not financial investments, and no one goes on vacation expecting that expenditure to become an annuity. Timeshares pay an immense “enjoyment dividend,” and I believe ARDA is niquely qualified to educate the media and consumers on this issue.

What have been your greatest challenges as President & CEO of ARDA?
As the industry moves from being a niche product that must be sold to a mainstream lodging option desired by consumers, one of the hardest things has been to get everyone to buy into the concept that timeshare can be a sought good. I know that the old paradigm was “No one wakes up wanting to buy a timeshare.” And although that is true, I’d like to suggest a new a paradigm, “Everyone wakes up everyday wanting to be on vacation.” If we all agree on this new twist on an old theme, then the work of ARDA and the developer community becomes more about expressing why owning a timeshare is a vehicle for better vacationing. One only has to look at demographics to know that the large number of middle class to affluent people who are interested in owning a flexible piece of vacation real estate that costs less than a new car makes for a compelling value proposition. In short, we have an eager marketplace, all we have to do is present the product in a way in which the demands of this growing marketplace can understand.

What have been ARDAs key milestones?
I’m proud of many of ARDA’s accomplishments in recent years – from our omnibus timeshare bill that passed a few years ago in California (the largest state with so much potential) to the various wins throughout the country protecting timeshare consumers from onerous transient occupancy taxes and real estate taxes. Through the passion of almost a million timeshare consumers, ARDA-ROC (Resort Owners Coalition) has helped ARDA advocate not only for the timeshare product but the integrity of the real estate purchase made by more than 4.4 million American consumers.

ARDA is blessed to represent an entrepreneurial industry that has recreated the way families vacation. Nothing is more satisfying than the comments I hear from timeshare owners as they express how this product has positively impacted their live and their families.

What changes do you see ahead for the industry in the next 10 years?
Just from an American perspective, we have 70+ million baby boomers moving from restrictive work and family schedules to a period in life with more time, freedom and affluence. The idea of owning a vacation product that allows them to experience their “wanderlust” and enjoy multigenerational vacationing with family and friends is hugely compelling. Our time as an industry has come. All we have to do is make sure that we capitalize on this growing marketplace with consumer friendly sales and marketing backed by quality assured products. I’m very excited about the future!

An Interview with Geoff Ballotti, President and CEO of Group RCI – On his first year and the future of Group RCI.

Could you tell us about your background in the real estate and travel sectors before joining RCI?
My first job was with Bank of New England in 1983 as a management trainee in their management training department. I went into the real estate lending group there, making development loans around New England and across North America. I got to know some great people at ITT Sheraton who were headquartered in Boston. At about the same time I went back to business school and when I got out I joined Sheraton in their development group. To me, after five years of banking, I thought the hotel industry was a lot more colorful and exciting than banking was—and a lot more fun. I spent the next 20 years with Sheraton, a company that took me all over the world. In the early 1990s, they sent me overseas to work on the acquisition of an Italian luxury hotel group called CIGA, and I got into operations.

I always wanted to be a general manager—I thought that being a GM of a great hotel was the best job in the industry. I still think that. My first GM assignment was as GM of the Sheraton Brussels, a city in which three of my four daughters were born. We then moved back to Italy and I had one of my best jobs ever as Managing Director of CIGA and the Starwood Hotels of southern Europe. In 2002 I was brought back to the U.S. to run the North American division of Starwood hotels and resorts, which I did for six years. I first met Steve Holmes, chairman and CEO of Wyndham Worldwide, in January 2008 when I was approached for this job. Over a series of meetings Steve convinced me what a great company, a great group and a great opportunity running RCI would be.

You started working for Group RCI in April 2008. In your first year, what have been your biggest challenges?
One big challenge for me has been not diving too much into the details—which I’ve always tended to do. I’ve always wanted to figure out everything that is going on. After 20 years in the hotel business, there’s a ton for me to learn. So many aspects of the timeshare exchange and vacation rental businesses are new to me. My challenge has been taking a step back and trying to manage the organizational context, as opposed to managing the details of the operation. Organizationally, another challenge has been making sure we have the right leaders in the right seats. We’re surrounded by incredibly smart folks like Gordon Gurnik our president of North America, Tom Edwards our Chief Financial Officer, Faye Tylee our Global Head of Human Resources, Charisse Cox, our Managing Director of the Pacific… I could go on. Operationally, intellectually and experientially, these people are outstanding. It’s so important that we position the brightest people we can find into key leadership roles, over-communicating our strategy to our associates as to where we are headed and going from there.

After having worked in Europe for a leading hospitality brand for many years, do you think this has given you a wider understanding of the global marketplace and its differences from region to region?

Absolutely. If you think about RCI and how global we are, Europe is absolutely critical for us. Our businesses in Europe are led by two new great talents at RCI: Jonathan Back, who heads our Exchange businesses and Ian Ailles who heads our Rental businesses. In terms of organizational context or managing cultural differences, I think my years in Europe have been very helpful for me in managing issues and opportunities.

Group RCI has also been expanding in areas other than Exchange, such as rental programs, holiday cottages and fractional ownership. Can you tell us more about the strategy behind these additional products and services?

Our rental strategy is about fulfilling our customers’ needs. This includes our ability to rent inventory and provide affiliates and developers with an outlet to rent their product to generate leads for their resorts. In some respects it’s similar to a hotel room: a night not occupied is a night forever lost. So the ability to rent if we cannot fill a unit with the exchange is very important. An example is Endless Vacation Rentals (www.evrentals.com), which is a phenomenal success for us. We’ve registered over 21,000 travel agents and over 29,000 travel agencies. We’ve been very successful on Web deployment. In 2008 alone, we had over
three million unique visits to EVRentals.com. We’ve got a lot of unique features within our Endless Vacation Rentals product. One is the best price guarantee—an assurance that our offerings aren’t available for a lower price anywhere else. We also have no booking fee, complimentary concierge service, and a three-day, 100% refund, giving you a complete refund if your cancellation is made three days in advance of the start-date.
Other features that set us apart from our competitors are Wyndham Rewards Points, which give the customer 5,000 points for every EVR rental and 24-7 check-in assistance.

I think that the most important thing about Endless Vacation Rentals, however, is that our properties are rated by our customers. When our members leave a unit they complete an online survey, and our Web site allows customers to read those reviews. A recent survey showed that after booking through Endless Vacation Rentals, 89% of our customers reported that we either met or exceeded their expectations.

What goals have you set for the next 12 months?
There are three major goals over the next year. The first is our continued investment in technology, our Web sites, and search capabilities. The second is the continued investment in sales and marketing infrastructure, making sure that we’ve got the best sales and marketing opportunities for affiliates and developers. As the economy struggles, our focus will be to continue helping affiliates and developers with lead generation. The third goal is continued growth, by adding quality new affiliates that represent us well and have resorts where our members want to travel. Our recent affiliation with Disney Vacation Club is a great example of this. The Disney Vacation Club management team I believe saw that our management depth, technology resources,
and global marketing infrastructure is in alignment with their strategic growth plan. Now RCI’s more than 3.7 million members will enjoy the opportunity to exchange into Disney Vacation Club resorts.

Are there any new plans or upcoming announcements we don’t yet know about that you could divulge?
In 2009 we will provide increased flexibility for owners to customize their vacation needs by introducing Enhanced Search for Points, much in the same way we developed Enhanced Search for our RCI Weeks members. Again, we are continuing to invest in technology. Our new Enhanced Search feature has given our members the ability to quickly go online and see total availability anywhere in the world. We believe in having the most flexible technology in terms of what you can do with your Points or Weeks. All the research indicates a trend toward shorter vacations. And that’s something powerful. We will continue to stay focused on technology enhancements, providing our members with the most Webfriendly content and functionality available in the exchange industry, while also providing more flexibility and options than anyone else
in the industry.

Can you say a few words about our European rental business/brands?
The European rental business is a collection of great brands that cover an extraordinary range of holiday products; from rural homes, to Italian manor houses, to outdoor parks in Holland, to camping holidays in France and Spain…I could go on. They are united by being self-catered and family-centric in their product offering, giving freedom of independence and space to their travelers. There are other European holiday companies, but none that can offer the range of nationalities: we are proud to market to as many as 17 languages – reaching into every corner of Europe.