By Bikramjit Ray
PALI S BADWAL, Managing Director of RCI in India (see photo) spoke to BW Hotelier in an exclusive interview about what his company was planning for the sub continent.
He started by telling us that RCI was like a glue which connected with the developer (hotel owner) and through them to the customer. So it was a b to b to c business. ’We are the glue with 4500 resorts around the world which gets from A to B,’ he said.
RCI has around 3.7 million members globally and the next largest player globally is Interval International with some 2 million members, but they are not present in India. When it comes to global footprint in timeshare, RCI is pretty much the best choice for the Indian market, according to Badwal.
’In terms of an Indian consumer’s ability to work with an exchange company via their developer, we sort of become a one-stop shop. Part of our aim is to make sure we do show value in terms of your timeshare, for you as a consumer, as well as you as a developer who sold it,’ he said.
RCI has nearly half of the market share of around 9 million time shares around the globe. ’The potential we see in India is enormous. India has the youngest time share purchaser in the world. You are purchasing in your 30s. By buying earlier, your desire and ability to consume increases significantly,’ Badwal told us.
Quoting a global study which took place In 2012, Badwal said, ’When asked how positive they were about time share, Indian consumers were placed third worldwide with 70 per cent saying they were positive. When asked again whether they would buy a time share, 40 per cent said they may. This is still the third highest in the world.’
One of the things you need to look at is also the size of the market, coupled with the penetration. The market has to be big but it can't be a mature market. In a mature market of a 1000 potential consumers, 80 will buy. In India it’s running at 3 out of a 1000.- So the size of the piece of the pie is 25 times what we have already sold plus the actual overall size of the market, he said expounding on the scope of business in India.
’Typically a time share purchased in Europe of North America is $ 20,000. India is roughly at about a 3rd of that price. 30 to 35 per cent. The value to an Indian who is buying at an exchange capacity, the same product for about Rs 4,50,000,’ he explained.
We asked Badwal what hotel owners or as he calls them developers get out of the deal. ’It depends on what that developer wants, is he a new build? Is he an existing property? Is he looking for expansion? Is he looking for refurbishment? Probably the best example on a small scale resort would be to look at Orange County in Coorg. They started off with five cottages. One became reception. They started to sell time share. With that money, they built more units. They have used the money to expand and invest.
Orange County spoke to RCI, who assisted in the production of the collaterals to make sure it got the right messaging and then they will sell to a member, for whatever their prices. They will enroll the member into RCI and we will get the details. When they come to exchange and to use our products i.e somebody else's week in India or abroad, is that member then transacting with RCI’, he said.
How does it make sense. we asked. ’Depending on their business model, existing hotels do not run at a 100 per cent except for some peak times during the year. They have spare capacity. They do MICE, they do FIT, they can do time share. It’s all part of the mix. A sensible hotel is willing to sell x percentage of its inventory at a discounted price, but they will get the money up front. They may want it to pay off debt, or do a refurb, they may want it to build another wing or an extension. They sell and make money. Where does RCI make its money? We do it with member's exchanging, because we charge members an exchange fee,’ he said.
’We are looking at what our members are going to get. We don’t want something with five rooms. We have the gauge of around the 20-30 minimum units. If you have a really small set of units, the ability for you to have a swimming pool and a restaurant on your resort is going to be highly unlikely. We know the kind of things our members are expecting when they go.-Style is something that is different. Heritage can work, but don't give me heritage if the mattress is made out of foam and there is no air conditioning and the room needs air conditioning. So, most people have thought about all of that. You can have a look and a feel, but it has got to have a certain amount of mod cons,’ he goes on to say explaining what makes the cut as far as RCI affiliation is concerned.
In India, RCI has 120 live operating properties and they are bulling about increasing, but only in specific areas. ’One can always take more Goa because it is so strong. Kerala is another area we want to expand in and a number of areas where there is wildlife like the Jim Corbett National Park for instance where we already have a number of affiliations are areas of growth for us,’ he said in conclusion.
The Author is Executive Editor of BW Hotelier.-
PALI S BADWAL, Managing Director of RCI in India (see photo) spoke to BW Hotelier in an exclusive interview about what his company was planning for the sub continent.
He started by telling us that RCI was like a glue which connected with the developer (hotel owner) and through them to the customer. So it was a b to b to c business. ’We are the glue with 4500 resorts around the world which gets from A to B,’ he said.
RCI has around 3.7 million members globally and the next largest player globally is Interval International with some 2 million members, but they are not present in India. When it comes to global footprint in timeshare, RCI is pretty much the best choice for the Indian market, according to Badwal.
’In terms of an Indian consumer’s ability to work with an exchange company via their developer, we sort of become a one-stop shop. Part of our aim is to make sure we do show value in terms of your timeshare, for you as a consumer, as well as you as a developer who sold it,’ he said.
RCI has nearly half of the market share of around 9 million time shares around the globe. ’The potential we see in India is enormous. India has the youngest time share purchaser in the world. You are purchasing in your 30s. By buying earlier, your desire and ability to consume increases significantly,’ Badwal told us.
Quoting a global study which took place In 2012, Badwal said, ’When asked how positive they were about time share, Indian consumers were placed third worldwide with 70 per cent saying they were positive. When asked again whether they would buy a time share, 40 per cent said they may. This is still the third highest in the world.’
One of the things you need to look at is also the size of the market, coupled with the penetration. The market has to be big but it can't be a mature market. In a mature market of a 1000 potential consumers, 80 will buy. In India it’s running at 3 out of a 1000.- So the size of the piece of the pie is 25 times what we have already sold plus the actual overall size of the market, he said expounding on the scope of business in India.
’Typically a time share purchased in Europe of North America is $ 20,000. India is roughly at about a 3rd of that price. 30 to 35 per cent. The value to an Indian who is buying at an exchange capacity, the same product for about Rs 4,50,000,’ he explained.
We asked Badwal what hotel owners or as he calls them developers get out of the deal. ’It depends on what that developer wants, is he a new build? Is he an existing property? Is he looking for expansion? Is he looking for refurbishment? Probably the best example on a small scale resort would be to look at Orange County in Coorg. They started off with five cottages. One became reception. They started to sell time share. With that money, they built more units. They have used the money to expand and invest.
Orange County spoke to RCI, who assisted in the production of the collaterals to make sure it got the right messaging and then they will sell to a member, for whatever their prices. They will enroll the member into RCI and we will get the details. When they come to exchange and to use our products i.e somebody else's week in India or abroad, is that member then transacting with RCI’, he said.
How does it make sense. we asked. ’Depending on their business model, existing hotels do not run at a 100 per cent except for some peak times during the year. They have spare capacity. They do MICE, they do FIT, they can do time share. It’s all part of the mix. A sensible hotel is willing to sell x percentage of its inventory at a discounted price, but they will get the money up front. They may want it to pay off debt, or do a refurb, they may want it to build another wing or an extension. They sell and make money. Where does RCI make its money? We do it with member's exchanging, because we charge members an exchange fee,’ he said.
’We are looking at what our members are going to get. We don’t want something with five rooms. We have the gauge of around the 20-30 minimum units. If you have a really small set of units, the ability for you to have a swimming pool and a restaurant on your resort is going to be highly unlikely. We know the kind of things our members are expecting when they go.-Style is something that is different. Heritage can work, but don't give me heritage if the mattress is made out of foam and there is no air conditioning and the room needs air conditioning. So, most people have thought about all of that. You can have a look and a feel, but it has got to have a certain amount of mod cons,’ he goes on to say explaining what makes the cut as far as RCI affiliation is concerned.
In India, RCI has 120 live operating properties and they are bulling about increasing, but only in specific areas. ’One can always take more Goa because it is so strong. Kerala is another area we want to expand in and a number of areas where there is wildlife like the Jim Corbett National Park for instance where we already have a number of affiliations are areas of growth for us,’ he said in conclusion.
The Author is Executive Editor of BW Hotelier.-
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