Timeshare Success for Hotel Groups in Spain

When hotel companies in America, such as Hilton and Marriott, launched timeshare ventures, they recognised the massive potential of the shared ownership concept. In doing so, they also latched on to a formula that has won a growing number of clients attracted to novel and quality holidays - and contributed to a market worth $12billion in 2007.

In their wake some of the biggest hotel brands in Spain have now adopted a mixed-use business model as a way of selling new products and services based on the timeshare principle. As well as marketing to existing clients, they are also able to win new customers who relish the idea of top-flight services and accommodation in urban and established holiday areas.

An added bonus for these prospects is the integrity and validity timeshare offers by an internationally recognised brand name. Currently hotels -- like so many other businesses -- are feeling the effects of the global credit crunch, the economic downturn and the impact on household budgets. However, for many operating a mixed-use strategy, their timeshare operations are bucking these trends. Why? One reason is that owners are reluctant to forgo holidays they have already paid for. While many big hotel groups in Spain have been established for decades, often their timeshare ventures are relatively new.

The Sol Meliá Vacation Club

The Sol Meliá Vacation Club (SMVC) is a case in point. Launched in 2004, it is a subsidiary of the hotel group, first established in Palma de Mallorca more than 50 years ago, and now operating some 350 properties in 30 countries. The success of the fledgling timeshare operation is self-evident. For the first half of 2008, SMVC reported strong financial results and growth - flying in the face of hard pressed economies in many parts of the world. The overall improvement in revenues – up 17 per cent - also spawned a continued net profit margin of 40 per cent for the same period.

Currently the Club has 25,000 members – some 50 per cent of them having been Sol Meliá hotel clients. In line with its growth strategy, this summer SMVC launched its first timeshare resort in Tenerife, its fourth in the Canary Islands. The Gran Meliá Palacio de Isora has 200 one- and two-bedroom oceanfront apartments.

The philosophy of SMVC aims to provide members with an entire lifetime of leisure experiences to meet their changing needs. Through the Club, all members have the option of exchanging and staying at any Sol Meliá property worldwide, including those in Paris, Rome, London and Madrid. SMVC already operates 14 properties in the Canary Islands, Mexico, Puerto Rico, the Dominican Republic and Panama. In 2009 its growth strategy will focus on developing more properties in Europe.

The BlueBay Vacation Club

Another brand name to make its debut in the world of holiday ownership is Hotetur Hotels & Resorts. Two years ago it launched the BlueBay Vacation Club during a period of aggressive expansion by its parent company Grupo Marsans, the largest tourism holding conglomerate in Spain.

Currently BlueBay has eight resorts in Fuerteventura and Gran Canaria in the Canary Islands, mainland Spain, Morocco, the Dominican Republic, Mexico and Cuba. Eight more are currently being added. Club locations are planned in mainland Spain, Tenerife, Turkey, Greece, Croatia, Bulgaria, Egypt, Tunisia and Dubai.

According to Ivar Yuste, managing director, corporate development, virtually all BlueBay members - some 10,000 of them - have been Hotetur hotel guests. They include nationals from the UK, Germany and Scandinavia along with smaller groups from other European countries. When BlueBay was launched, it was cash negative for five months and then broke even. Today, the Club is still a profitable operation, said Mr Yuste.

Barcelo Hotels & Resorts

Club La Costa has been instrumental in driving timeshare’s popularity in Europe. It now has 22 fully owned and managed properties and a membership base of more than 50,000.

The latest group to join the timeshare fraternity is Barcelo Hotels & Resorts which this year opened its first-ever holiday ownership property in the Canary Islands. Situated in Fuerteventura, Barcelo Club Puerto Castillo is a self-contained resort on a mixed-use development comprising three hotels and a spa. Barcelo Hotels & Resorts is one of the world’s top 30 hospitality and travel companies. Family owned and privately held, it owns, manages or franchises hotels in 15 countries.

Club La Costa Resorts and Petchey Leisure

Two of the most successful independent leisure brands in the area are Club La Costa Resorts & Hotels and Petchey Leisure. Both have expanded their resort portfolios via organic growth and acquisitions. For more than two decades Club La Costa has been instrumental in driving timeshare’s popularity in Europe. It now has 22 fully owned and managed properties - with more on the way - and a membership base of more than 50,000.

Petchey Leisure is another pioneer behind the European timeshare boom having expanded into mainland Spain and the Canary Islands. The acquisition of Royal Park Albatros Club in Tenerife launched its current expansion drive.

Both companies are members of the Organisation for Timeshare in Europe.