From Brian Folley by fjwuxn


									   T I M E S H A R E MATTERS
  A strategic overview of traditional timeshare and new
   shared ownership products and services by the UK
  chapter of the Organisation for Timeshare in Europe
   1.    Message from the Chairman
   2.    Resort Development
   3.    Changing Attitudes
   4.    Media Relations
   5.    Facts and Figures
   6.    New and Developing Markets
   7.    The Versatility of Shared Ownership
   8.    Government Relations
   9.    Other Key Issues
   10.   6 Good Reasons to Join the Ranks of OTE
   11.   The Expanding Range of Timeshare Products
   12.   The A-Z of Timeshare

February 2006
                                                                                           A MESSAGE
                                                                                           FROM THE

Tourism makes a significant contribution to the           Over the years timeshare‟s image has been
economy of the United Kingdom - and an integral           enhanced by resorts at the top end of the market,
part of that is timeshare.                                many of them in the four- or five-star category.
                                                          Entrepreneurs and big-name hospitality groups
Conservative estimates show that timeshare owners         have done much to raise awareness of the quality
bring at least £205million a year to the UK. Over         holidays that timeshare has come to represent.
the past decade that figure has trebled and will
likely increase again by a similar level over the next    Based on research undertaken by the Organisation
10 years.                                                 for Timeshare in Europe (OTE), I am confident that
                                                          holiday ownership in the UK will continue to grow at
Few can doubt that timeshare is a robust business.        a healthy rate and make an even greater
Since its inception in the early 1970s, it has been on    contribution to domestic tourism and the national
a steep growth curve. And today the UK remains at         economy. As the comments below from the Greek
the forefront of timeshare development,                   minister of tourism indicate, timeshare has shown
representing more owner-families than any other           positive signs that it can be a major vehicle for
country in Europe.                                        expansion.

The UK also benefits from a range of exceptionally
high quality resorts that regularly attract record
levels of occupancy. At the same time local firms,
                                                          Frank W Chapman
such as shops and service outlets, profit from the
                                                          Chairman of OTE UK
business that holiday ownership brings to an area.

         “Now, for the first time, the government is putting a really big emphasis on tourism
         which it views as a major factor in the improvement of the Greek economy. We
         strongly believe timeshare can become a major part of the tourism product. It is a
         product that I have personal experience of and I am convinced of the benefits it can
         offer the holidaymaker.”
         Dimitri Avramopoulos, Greek minister of tourism
         at the European Timeshare Business Forum in Athens, 2004


A growing confidence in timeshare coupled with new products and services has spurred the growth of
quality resorts by big-name leisure groups and independent entrepreneurs. Here are just some of them.

    Club La Costa Resorts & Hotels (CLC) is actively looking to expand its resor t por tfolio in the UK and mainland
     Europe. It is in active negotiation for three proper ties in Scotland, Wales and south-western England.

     Recently it completed the construction of 55 lodges at Duchally Country Estate in Per thshire. Set in 27 acres of
     national parkland, the property is only an hour‟s drive from the main airpor ts of Edinburgh and Glasgow.

     When CLC acquired Duchally in 1998, it was a small, country house hotel with 12 bedrooms and outline per mission for
     the lodges. With construction of the lodges now complete, CLC has also added a leisure centre with swimming pool
     and sauna.

     In mainland Europe, the company is also engaged in a strategy of expansion by acquisition. In recent weeks it has had
     lengthy and detailed discussions about potential proper ties in Turkey and Cyprus – destinations popular with UK
     holiday maker s.

     Currently CLC has a member base of 50,000, half of which are British nationals. The remainder comprise French,
     Spanish, Ger man and Russian club members.

     The company has 20 of its own resorts and a portfolio of close to 200 affiliated proper ties worldwide. With a growing
     member ship, it maintains strategic business alliances as it continues to expand in the travel and real estate markets.

    De Vere Resort Ownership, the timeshare division of the hotel and leisure group, has invested £50million in a golf and
     leisure resort on a 300-acre site by Loch Lomond in Scotland.

     The Carrick at Cameron House is the four th timeshare development in the De Vere portfolio. On completion it w ill have
     18 luxury mansion house apar tments, 78 detached lodges, a championship golf course, world- class spa and ex tensive
     leisure facilities.

     A third of the development will be committed to a nature reserve for the protection and enhancement of local wildlife.

     De Vere also operates timeshare proper ties at Belton Woods, Lincolnshire, Slaley Hall, Nor thumberland, and Cameron
     House in Scotland.

 Hilton International Grand Vacations Company (HIGVC) has welcomed its first guests to six new timeshare lodges at
    Hilton Dunkeld in Per thshire, Scotland, bringing the total number available to 22.

    The resort – par t of a 280-acre estate and 50 miles from the Scottish capital, Edinburgh – was once the Highland retreat
    of the Duke of Atholl.


    HIGVC also added a new resort to its portfolio of properties in the UK and Ireland: the Mount Wolseley Hilton Hotel,
    Spa & Country Club in southern Ireland where it plans to develop 56 lodges over the next three to four years.

    Situated 40 miles from Dublin, the 143-room hotel has a championship golf course and a state-of-the-art spa.

    HIGVC currently operates four resor ts in Scotland and Egypt. A further resort in Vilamoura, Por tugal, is due to open in

   Seasons Holidays has announced the completion of 29 new holiday cottages at Whitbarrow Village in England‟s Lake
    District. Last summer official ceremonies marked the for mal opening of this £3million development.

    The cottages have all been sold „off plan‟ through a national advertising campaign.

    The concept for the new Kirkstone Cottages allowed owners to purchase them as holiday homes on the basis that they
    could enjoy exclusive occupancy for four weeks each year for the first 10 years.

    The remaining time is being hired out to Seasons‟ 18,000-member base as well as to the travel company Hoseasons to
    provide owners with a rental income.

   Anfi Tauro is the latest project in Gran Canaria to be developed by the Anfi Group. Some five kilometres from its four
    other developments – Anfi Beach C lub, Club Puerto Anfi, Club Monte Anfi and Club Gran Anfi – this latest resor t will
    comprise 1,500 timeshare units as well as an 18-hole golf course, commercial centre, private marina and freehold

    According to Calvin Lucock, general director, the first phase of 119 timeshare units at Anfi Tauro will be ready for
    occupancy in September. Some 35 per cent of the units are already sold. Forecast completion for sell-out is 2012.

    Currently the owner base of all Anfi resorts totals 30,000. Some 40 per cent comprise British nationals; most of the
    remainder are German and Scandinavian.

   One of the biggest owners of hotel properties in Europe has acquired Holiday Club Fin land Oy whose interests include
    nine resor ts and six spa hotels in the country and a spa hotel in Sweden.

    London & Regional Properties (L&R) agreed the transaction with Procurator Oy CapMan‟s investment funds, the
    main owners of the F innish company.

    In acquiring the Nordic company, L&R is working with the Finnish company on the future development of Holiday Club
    in northern Europe and “ marking the move of our hotels‟ investment business into timeshare”.


    As co-investors, L&R is collaborating w ith the Finnish company on future developments of Holiday Club in nor thern
    Europe, Russia and the Baltic as well as on other timeshare oppor tunities throughout Europe.

    London and Regional Proper ties is the owner of more than 60 hotels, comprising some 10,000 roo ms and is one of the
    biggest, pr ivate proper ty companies in the United Kingdom. Its real estate por tfolio is valued at more than €5billion.

   In early 2005 the parent company of C lube Praia de Oura and Oura Praia Hotels - one of Portugal‟s most successful
    timeshare establishments - acquired the RMI Consortium and subsequently for med Petchey Leisure. The Por tuguese
    property has some 700 apar tments and 18,500 owners.

    Petchey Leisure plans to continue to develop the growth strategy of the for mer RMI either through organic growth or
    acquisition. Its linkage with Club Praia de Oura – the group has an overall membership of 52,000 – will lead to “greater
    synergies and benefits for both the businesses and its member s”.

    At the time of the buyout, RMI owned or managed six resor ts in the UK, Tenerife, mainland Spain and Thailand. It also
    owned inventory at 24 other resor ts in 22 countries, providing its 28,000 members w ith a wide choice of holidays.

    In a separate development, Petchey Leisure acquired the Montechoro Beach C lub, an apar tment complex at Praia da
    Oura on the Algarve comprising 177 apar tments and 4,391 timeshare owners.

    With these acquisitions, the company solidified and enhanced its commitment to all owners that they belonged to an
    innovative and dynamic timeshare group.

   Sol Meliá, the Spanish hospitality giant, unveiled plans to expand its timeshare arm – Sol Meliá Vacation Club
    (SMVC) – in Europe. Initial projects include resor ts in the Canary Islands followed by Mallorca and mainland Spain.
    Future developments could also include destinations in the UK, France and Italy.

    This latest development mirrors SMVC‟s relationship w ith Cendant subsidiary RCI in the Americas and the Caribbean.
    SMVC is one of the largest vacation clubs in the world.

    In 2005 SMVC launched sales and marketing programmes in Europe in order to establish a timeshare presence in the
    medium ter m.

    In October 2003, Sol Meliá announced a strategic alliance w ith Cendant Corporation. In a separate agreement, RCI
    agreed to provide consultancy, exchange and other networking services.

    By expanding its existing association w ith the exchange company, Sol Mel iá said it would “help achieve our strategic
    objective to develop and internationalise our timeshare business and provide oppor tunities for greater growth and


The participation of OTE in the annual conference in Morocco of the Association of British Travel Agents
is tangible evidence of how the contribution of timeshare to the world of tourism is now being

In a special breakout session, Preben Vestdam (Cendant Leisure Real Estate Solutions) and Robin Mills (Petchey Leisure)
– both members of the OTE Board of D irectors – made presentations extolling the oppor tunities and benefits for travel
agents of marketing timeshare products and services.

Under the title „Time to Share‟, Mr Vestdam covered the range of shared ownership products, from traditional timeshare to
fractionals, Private Residence Clubs (PRCs) and condo-hotels. He told delegates that in 2004 timeshare sales exceeded
$10billion and over the past decade timeshare had registered double-digit growth every year.

In his address, Mr Mills said timeshare was a “must have” for the hospitality industry, was a quality holiday product and a
booming sector of the global tourism. There were positive benefits to gain from marketing timeshare – namely by selling
inspection visits, trial products and offering a range of complementary services such as flights, insurance and car hire.

In the past timeshare had failed to be recognised as an integral part of the legitimate travel industry. That had now changed ,
said Mr Mills. There were great synergies emerging between travel and timeshare providing oppor tunities for great returns
and a “win-win” situation.


A proactive public relations campaign has done much to reverse the negative public perceptions of
timeshare in the United Kingdom.

At the same time the growing number of hospitality brands venturing into timeshare has also helped this welcomed trend.

While there is broad recognition among many journalists that timeshare represents value for money, there are still some
whose doubts dwell on the „hard-sell‟ tactics of rogue operators whose activities in the past have spawned negative
publicity, particularly in the tabloid press.

Thankfully this type of coverage is diminishing due in part to an OTE programme where journalists are offe red infor mation
guidelines and best practice advice.

Augmenting those effor ts is the recognition that the Organisation for Timeshare in Europe is a reputable trade body able to
speak authoritatively on industry issues.

For the second year running, OTE hosted a roundtable meeting in September for journalists that resulted in positive news
coverage. Industry participants included Frank Chapman, Clowance Holdings, Beverley Hoyle, RCI, Craig Mitchell, De Vere
Resort Ownership, Richard McIntosh, Hilton International Grand Vacation Club, and Peter van der Mark, OTE.

Over the past two years, visits to UK resorts by selective journalists have generated more positive coverage; the programme
will continue in 2006.

Other activities: the production of a series of press releases that resulted in good coverage, especially in regional
newspapers and broadcasting outlets.

Particularly successful was a news announcement highlighting „OTE‟s Top Tips for Purchasing Timeshare This Summer‟.

In 2005 OTE logged a total of 141 ar ticles directly relating to timeshare of which 58 per cent were positive. Many
acknowledge quality accommodation and resor t facilities and credit the fact that the perception of timeshare among
consumer s has changed for the better.

Of those ar ticles deemed „negative,‟ they often refer erroneously to timeshare when the stories relate to dubious holiday
clubs and „free‟ holiday offers.

Others refer to developments associated with John Palmer, convicted of conspiracy to defraud in 2001.

                                                                                      FACTS AND


   Number of UK Resorts                             112
    Total Number of units                           3,891
    Average number of units per resort              35
    Year round average occupancy levels             85%
    Number of UK families owning timeshare          Approx. 500,000
    Over 70,000 British families own in the UK (75% of total), followed by Germans (11,000)
    Average size of travelling party                2.3
    Total visitor spend                             £205 million (without maintenance fees or other)
    Majority of units are two-bed apartments
    Maintenance fees range                          £215-£552 - example 2 bedroom
    Employment UK:                                  Direct Employment approx. 20,000        FACTS AND
                                                     Indirect Employment approx. 7,000        FIGURES
                                                     Not calculated induced employment
NOTE: The UK employs the highest percentage of Head Office staff in the European Union. INFORMATION


Overall size of Timeshare Industry in Europe:
         1,450,000 owning families
         1,500 resorts - approx. 85,000 units

Another Example: Spain:
        Total output     €4.2 billion
        Total Income     €2.5 billion
        139,000 fte jobs
        50.3% of owners come from the UK - over 300,000 owners.

                                                                                                              NEW AND

Second only to North America, Europe continues apace as a vibrant, growing timeshare market.

In the months and years ahead, UK holiday makers can look forward to a greater choice of destinations as developers focus
on a range of new vacation hot spots for resor t projects.

While Spain continues to dominate the timeshare market in Europe, watch out for holiday destinations like Cyprus. It‟s a
growth market where The Paradise Group has already made its mark.

The first two phases of Paradise Kings Club in Paphos with 64 units are now open. With the third and four th phases in
place, this first, purpose-built timeshare property on the island will eventually have 110 units. The development is a joint
venture between The Paradise Group and a local construction company, Kouroushis Brothers. And Paradise has more
projects in the pipeline.

Vesta Vacations, par t of the Leptos Group, is another company making inroads in timeshare. Lepkos is one of the principal
property developers and a major hotelier in south-eastern Europe. Last September Vesta signed an agreement w ith RCI to
affiliate the Paphos Gardens Holiday Resor t. The Lepto s Group has also launched the Vesta Vacation C lub which is being
serviced by RCI as a „white label‟ club, facilitating club reservations and offering travel and exchange services. The Paphos
Gardens Holiday Resor t is the fir st property within the club w ith plans to incorporate more Leptos resor ts throughout the

Another key development in Cyprus is the Amathus Vacation C lub that is now open for business. Situated at the Aphrodite
Hills resor t, it is the first integrated golf, leisure and residential development of its kind on the island. The resor t design is
based on a traditional Cypriot village. Eventually the C lub will comprise 78 one-, two- and three-bedroom apartments and
villas. On-site amenities will include a split-level swimming pool, poolside restaurant, a separate children‟s pool and
indoor/outdoor children‟s activity area. Club members w ill also have access and special privileges to facilities including an
18-hole championship golf cour se, a Greco-Roman- style health spa, tennis academy and a variety of shops and restaurant.

The developer, Amathus Vacation Owner ship, is par t of the Lanitis Group of Companies. Group interests include two, five -
star hotels in Cyprus and on the Greek island of Rhodes. Other interests are two real estate operations as well as travel,
tourism, commerce, far ming and enter tainment ventures.

In Greece published plans by the N. Daskalantonakis Group have signalled the company‟s commitment to timeshare. The
Group owns Grecotel - the best-known hotel brand in Greece and the Eastern Mediterranean – which launched the Galaxia
Vacation Club in 2005.

RCI is managing the Club, handling reservations and providing a travel and exchange service for members. With more than
30 resorts and city-based hotels in Greece, the Group is predicting significant timeshare sales over the next five years.
Plans to expand its resort and hotel portfolio into the Balkans and southeast Europe are high on the agenda.

                                                                                                         NEW AND

In addition to providing an exchange service for the Galaxia Vacation C lub, RCI has committed to a significant lead generation
programme of five years. The weeks of timeshare initially came from resor ts in Kos and Crete. More from Corfu will be available in

In the past year Turkey has logged record numbers of inbound holiday makers, many of whom are budget conscious and view the
country‟s hot-spots as real value- for-money.

In recent weeks The Dedeman Group – one of the largest hospitality brands in the country – signed an agreement to affiliate 10
resorts w ith RCI. They are based in popular holiday destination such as Bodrum and Antalya as well as Istanbul, Kyrenia, in
northern Cyprus, and the eastern Anatolian region.

Turkey is a growth market for the timeshare industry both in ter ms of domestic and international visitors.

Other European companies – established and newcomer s -- are also evaluating plans for resor t properties in the country.

Watch out as well for Croatia. Here is another holiday destination where timeshare development can give new impetu s to its tourism
industry. The Hungarian developer, Dalmacia Holiday, owner of Dalmacia Holiday Apartments, has signed an exclusive affiliation
agreement w ith RCI.

Croatia is a destination in high demand, according to the exchange company.

For fir ms serving tourists seeking a more novel holiday experience, consider developments in the Baltic and Nordic countries.

Holiday Club Finland has joined forces with a construction company to develop a new spa hotel in the centre of the Estonian capital,
Tallinn. This mixed-use project w ill eventually have 362 guest rooms and 90 timeshare apar tments. Holiday Club Tallinn is due to
open in spr ing 2007.

Holiday Club Finland has managed to develop its popular spa hotel concept into a successful export product. Its first spa hotel
outside its own borders was opened in Sweden in November 2004.

In 2005 one of the biggest owners of hotel properties in Europe acquired Holiday Club F inland Oy whose interests include nine
resorts and six spa hotels in the country and a property in Sweden.

                                                                                                         VERSALITY OF

New concepts of shared ownership are expanding the horizons of timeshare around the world.

In Europe, particularly, the potential for developing fractional owner ships and private residence clubs (PRCs) is huge,
according to leading timeshare guru, Dr Richard Ragatz.

His projections are based on the growth of these new timeshare products in North America that combine to make one of the
fastest growing segments of the resort property industry.

Fractionals and PRCs have emerged as a viable alternative to second home ownership, featur ing the privileges of a luxury
holiday residence at a fraction of the cost.

They are at the cutting edge of the resor t property industry where they offer multiple benefits to developers and operators of
upmarket resor ts as well as consumers.

To illustrate the point, sales of fractional interests in the United States in 2004 surpassed $1.5billion, up 300 per cent ov er
the previous year.

Today most upscale hotel and resor t development companies are already in the industry or contemplating entry in the near
future. The concept is most appropriate for companies emphasising a high- income clientele and conducting business in
areas where prices for whole-ownership proper ties and hotel rooms are also high.

While acknowledged as another for m of shared ownership, the fractional concept differs significantly from the traditional
timeshare product. In timesharing, individual weeks are sold at an average price of about $15,000.

In contrast the pr ice of a fractional is obviously higher than a timeshare week as more time – typically three weeks to three
months – is allocated to the product. More importantly, a greater proportion of the purchase price is allocated to the product
itself since marketing and sales costs are perhaps one- third of what they are for a timeshare.

As a result, the resale and investment potential of the fractional interest is enhanced since it is more of a tangible proper ty
product than an abstract holiday concept.


Office of Fair Trading (OFT)

OTE continues to work closely with the Office of Fair Trading (OFT), an independent government agency charged with
making markets work well for consumer s.

While playing a leading role in helping consumers to understand their rights, the OFT also aims to ensure business practices
are fair and competitive.

Part of its Consumer Regulation Enforcement Division is the European Enforcement Team that acts to ensure that traders in
other European Union (EU) or European Economic Area member states comply with EU consumer protection laws.

Where possible the OFT seeks to work with authorities in other member states. This has led, for example, to cooperation
with a major police investigation in Spain into fraudulent timeshare resale schemes.

Each month the OFT receives an average of 200 complaints about the trading practices of some timeshare and holiday club
traders. Of these some 80 per cent relate to holiday clubs and of the remaining 20 per cent, many relate to resales.

Department of Trade and Industry (DTI)

Over the years OTE has forged a close working relationship w ith the Depar tment of Trade and Industry (DTI), the
government depar tment responsible for policy on timeshare regulation in the UK.

Meetings have been held w ith senior officials to review the implications of the UCP – Unfair Commercial Practices –
Directive, problems stemming from fraudulent holiday clubs, rogue resale companies and other timeshare -related issues.

The DTI was also a guest at the last seminar organised by OTE UK.

Taking the lead within the UK government, the DTI‟s Consumer and Competition Policy Directorate addresses a range of
policy issues. Its raison d’etre is to deliver a competitive framework for the growth of successful businesses and a fair deal
for consumers.

Part of the DTI is the Companies Investigation Branch (CIB) 1 which evaluates complaints about the conduct of companies
and carries out inspections and investigations under the Companies Acts.

In recent months, five companies promoting holiday club memberships that promised exclusive discounts to customers were
wound up by the H igh Cour t following a CIB investigation. Some 14 other holiday club companies have also been wound

    In the last Budget, the Government announced plans to transfer the Companies Investigation Branch from the DTI to the
Insolvency Service, based in Birmingham.

                                                                                                          OTHER KEY

Unfair Commercial Practices Directive (UCP)

The Fair Trading Directive – formally known as the Unfair Commercial Practices Directive (UCP) – became European law on
12 June 2005.

In the U K it must now be transposed into law by 12 June 2007 and effective by 12 December 2007. Other EU member
states have been given specific deadlines to give effect to the legislation.

The new law will ban unfair advertising, marketing and other commercial practices used by businesses in their dealings w ith
consumer s. In par ticular, practices that are misleading or aggressive will be ba nned. It will have profound ramifications for
dubious holiday clubs and other schemes run by rogue operators.

According to the European Union (EU), the Directive will replace the complex tangle of existing national rules and
judgements with a single, Europe-wide regime.

The Directive and the new Enforcement Co-operation Regulation are complementary. The UCP Directive lays down
common rules prohibiting a range of sharp practices and requires EU states to put in place effective ways of ensuring that
traders who break the rules are punished.

The Enfor cement Co-operation Regulation will establish a network of public enforcers with the aim of strengthening
enforcement of all consumer protection rules “and beating rogue traders who exploit differences in national laws to run
cross-border scams,” says the EU.

VOICE: the Vacation Owners’ Independent Coalition in Europe

In 2005 the Organisation for Timeshare in Europe (OTE) and The Timeshare Association of Timeshare Owner s‟ Committees
(TATOC) – co-founders of the Vacation Owners‟ Independent Coalition in Europe (VOIC E) – reached agreement on the
future of VOICE.

The VOICE Board of D irectors unanimously endorsed the agreement which defined the core business of VOICE as the
handling of consumer complaints throughout Europe.

Key elements of the agreement include establishing a unified system for the handling of member and non - member
complaints on a cross-border basis and the opening of a European head office in Brussels.

VOICE also aims to create an independent, audited repor ting system on complaints that will be conducted annually. This
data w ill be made available to both national and European authorities.

Norma Har tshorn, for merly secretary-general of TATOC, is now secretary-general of VOICE.

                                                                                                          OTHER KEY

As a non-profit- making par tnership, VOICE works to safeguard the interests of consumers and promotes the positive
development of timeshare throughout Europe. As such it aims to provide unbiased infor mation on all matters relating to
consumer complaints on timeshare.

ADR: the independent arbitration scheme

The independent arbitration scheme for mally launched in 2005 will go a long way to build trust and confidence in the
timeshare industry with improved consumer protection measures for member s of the public who purchase from OTE
member companies.

Developed in co-operation with the European Commission and administered by the Char tered Institute of Arbitrators (CIArb),
the scheme is geared to handling complaints that are unresolved through OTE‟s standard complaint-handling procedures.

It also offer s fully independent analysis and judgement. The arbitrator ‟s decision is binding for both the consumer and the
OTE member.

The CIArb offers an independent service that can address cross-border disputes.

                                                                                                      6 GOOD
                                                                                                    REASONS TO
                                                                                                     JOIN THE
                                                                                                   RANKS OF OTE

More and more companies and individuals who play a direct and indirect role in the timeshare industry
have recognised the benefits of OTE membership. Here are six reasons that underscore that premise:

1.   OTE is the trade body for the vacation ownership industry throughout Europe, representing and
     promoting best practice and excellence in business. Through its Code of Conduct, OTE is committed to high
     standards in the marketing of timeshare products and services.

2.   Protecting the interests of member-companies through proactive stakeholder lobbying. As the unified
     voice of the European industry, OTE works closely with regulators, politicians and the media. OTE‟s agenda is driven
     by developments in the political arena, in the consumer protection and media mar ket and in its members‟ business

3.   Providing the biggest and best business networking opportunities for the wider industry. OTE
     encourages members to get involved in special events such as the annual European Timeshare Business Forum. At
     the same time, throughou t the year, it organises seminars to promote timeshare and the work of OTE in key markets
     around Europe.

4.   Exploring developments and new business opportunities as the genuine information source about
     the industry and its different markets. For member-companies, OTE is a source of industry data on timeshare
     developments and the legislative scene in Europe. It also works to maintain an acceptable balance between the
     interests of the consumer and the supply side of the industry.

5.   Promoting and communicating the overall benefits of timeshare ownership. Representing the best of
     European timeshare, OTE works to foster and promote the growth of the industry through a range of programmes –
     education; public relations and communications; governmental affairs; membership development; consumer relations
     and a dedication to excellence and fair trading.

6.   Becoming the seal of approval for potential customers by ensuring the delivery of consumer
     relations and proper information. In the event of disputes w ith member-companies that cannot be resolved
     amicably, OTE now offers consumers an independent arbitration service, devised by the Char tered Institute of
     Arbitrators. OTE also addresses cross-border disputes through an independent organisation, the Vacation Owners‟
     Independent Coalition in Europe (VOICE).

                                                                                                           RANGE OF

Fractionals… private residence clubs… destination clubs… condo-hotels. All based on the concept of
shared ownership, these latest products and services are growing in popularity.

And their potential to expand the range of holiday options currently available has been recognised by the Organisation for
Timeshare in Europe.

Several companies are already offering an expanded range of services. As a result, OTE has endor sed new policies to
embrace these products and widen its geographic sphere of interest beyond Europe to the Middle East.

The policies represent a watershed for OTE. Embracing new products and services - and extending its sphere of influence -
allows the trade body to grow its membership base and expand the range of services currently on offer to members and the
consumer at large.

Driving these latest developments was a demand from OTE members themselves who are already venturing into these new
areas. Other companies already offering these products and services have declared an interest in joining OTE.

OTE has already experienced tangible benefits from these developments. In 2005 following a recruitment drive, the
member ship base logged a net increase of 15 per cent and includes brand name hospitality companies such as Starwood,
Sol Meliá and Accor.

Certainly the ramifications of new products and services will have a significant impact on the timeshare industry not only in
Europe and the Middle East but also, eventually, around the world.

Take fractionals as an example: in the United States alone, sales in 2004 exceeded $1.5 billion, an increase of 300 per cent
over the previous year.

                                                                                                           THE A-Z OF

A    DR scheme – launched in spring 2005, the Alternative Dispute Resolution programme is designed to ha ndle
     complaints that are not resolved through OTE‟s standard complaint handling procedures. The scheme, which is
administered by the Chartered Institute of Arbitrators, is the first pan European ADR service for cross-border complaints on

Amenities & Facilities – refers to those facilities (other than the accommodation units) that are available to timeshare
owners within a resort. Such amenities and facilities will vary from one type of resor t to another – for example, a beachfront
resort may well provide an outdoor pool, pool bar, beachside café and an ex tensive range of water spor ts.

ARDA – the American Resor t Development Association is the established and well suppor ted trade association
representing the U.S. holiday ownership industry.

B    iennial membership – see Timeshare.

c    ancellation/cooling off period – the period of time granted under national and European law dur ing which a buyer
     can cancel a purchase contract w ithout penalty and receive a complete and full refund of monies paid.

Cash-back scheme – a contract by which a cash-back company agrees, subject to cer tain conditions, to pay to the
customer all, or a substantial amount, of the monies paid by the customer under a primary contract to which the cash -back
contract is ancillary. OTE does not endorse cash-back schemes.

Club constitution and rules – most European resor ts are set up under the Club Trustee System and rules for the Club
are set out in the Constitution. There is usually an unincorporated members‟ club, membership of w hich entitles purchasers
to occupy the proper ty. Usually the structure is suppor ted by a deed of trust w ith an independent trustee.

Club Memberships – this form of timesharing has gained enormous popularity since the early 1980‟s. In a club
member ship project, the developer places ownership of the real property and its improvements in trust as indicated above.
The purchaser receives a cer tificate of membership in the club entitling that per son to use a unit for a designated period
each year and the recreational amenities available at the proper ty. No title or interest in the under lying property is conveyed.

Often, these club membership programmes are structured using a “points-based system,” offering certain benefits and
flexibility to timeshare owners. The “Club” concept also travels well across international borders.

D    eveloper – the ter m used to denote the developing entity, which is responsible for the planning, funding and
     construction of a timeshare resort.

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Discount travel membership clubs – members usually acquire the right to book holidays, including flights and/or
accommodation and other services such as car hire and insurance at discounted or privileged rates. Discount Travel Clubs
offer long- ter m membership which can be as long as 50 years or even in perpetuity, for a capital sum to be paid at the
signing of the contract (i.e. a membership joining fee). Usually holiday arrangements are via allocation deals with various
suppliers rather than being real estate or timeshare resor ts actually dedicated to the system. Trustees are not used. In
addition to the joining fee, members also pay an annual membership fee and a separate fee for every holiday taken.

E    scritura – a system of timeshare often used in Spain and Portugal. Buyers register their wee k(s) in front of a notary
     who registers their ownership and issues them with a document.

European Timeshare Directive – the Directive, which applies to any timeshare contract made under the law of a EU
country or where the property is in the European Economic Area (EEA), gives timeshare buyers the following minimum

    A minimum 10-day cooling off period in which to cancel the contract; in the UK the cooling off period is 14
    Timeshare sellers cannot seek or take deposits prior to, or during, the cooling off period
    The right to a brochure and a written contract setting out basic infor mation on the timeshare proper ty in the
     buyer‟s own language
    Any associated credit agreement is cancelled automatically when a buyer cancels a timeshare contract.

Exchange – a facility offering timeshare owners the option to deposit their membership or week(s) in a computerised
system to exchange for a stay in another unit in another location at the same or alternative time or within any similar seaso n.

F    ixed time – see Timeshare.

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Floating time – see Timeshare.                                                                            TIMESHARE
Fractional ownership – is similar to that of the traditional week system, but rather than purchasing an individual week,
the consumer is able to purchase the r ight to use and occupy a vacation property in various multiples from four to thir teen
weeks a year.

M     aintenance/management fee – the annual fee assessed to owners to cover their contributions towards the cost of
      maintaining and managing the resor t.

Marketer – an entity that is authorised to sell to the consumer, either by virtue of a marketing agreement with the
developer, or by virtue of having purchased the product from the developer for onward sale to the consumer.

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Mini-holiday programmes – a means of bringing prospective buyers to resor ts by offering a free or reduced cost stay at
the proper ty. Sometime during the mini-holiday, attendance at a sales presentation is mandatory. Many holidays can be
offered through direct mail and telemarketing. Sometimes also referred to as SIVs (site inspection visits) .

Mixed-use resort – this is a development in one or several buildings that combines two or more uses that are physically
and functionally integrated and developed as par t of a coherent plan. A mixed-use development might include, for example,
a resort hotel, a purpose-built timeshare component and a central facilities block.

O    PCs – the abbreviation OPC stands for „off-premises contact‟ or „outside proper ty consultant‟. The OPC‟s function is
        to occupy a location outside the project to invite people who seem to meet predeter mined qualification criteria to tour
the resort. To help accomplish this, OPCs may offer potential customers a variety of inducements such as a free meal or a
gift. In many locations, OPC activities have been restricted. Such restrictions vary from place to place and may involve
limiting OPC representatives to booths or other fixed locations, limits on hours of solicitation, the number s of OPCs or
locations a resort may have and requiring that OPCs register with the city, county or other governmental jurisdiction.

OTE – Organisation for Timeshare in Europe , the non-profit making trade association representing the timeshare
industry. OTE was formed in 1998 and has over 140 member s from all sectors of the industry across Europe, including
resort developer s, exchange companies, management and mar keting companies, trustees, finance houses, law fir ms and
resale companies. All member s sign up to a code of ethics, which provides customers with higher levels of protection than
the law requires.

P   art exchange – a method of upgrading or changing memberships whereby owners trade in their existing weeks as
    part pay ment.

Points – see Timeshare.

R    esale Company – similar to an estate agent, a resale company acts as a broker for timeshare owners w ishing to sell
      their week(s). As well as under taking adver tising on an owner‟s behalf, often in the national press, the resale company
will complete the transfer into the new owner‟s name.

S   takeholder -- an independent third-party such as a solicitor, accountant or trustee, appointed by the developer,
     marketer or resale company to receive and ultimately distribute the purchase price, on completion of the purchase

T   ATOC – The Association of Timeshare Owners‟ Committees is a non-profit making association for owner committee
    member s from resor ts around the U K and mainland Europe. TATOC encourages the efficient management of timeshare
resorts, liaises with OTE, governments and NGOs and lobbies on matters affecting owners and the timeshare industry .

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Timeshare (also known as vacation ownership, holiday ownership or seasonal ownership) – a holiday
concept where occupancy of holiday accommodation is provided and where this right of occupancy is secured through a
direct link w ith underlying real esta te. In nearly all cases that underlying proper ty asset is held by an independent trustee in
order to protect members in the case of the developer becoming insolvent.

         Fixed time – an occupancy period pre-deter mined by a fixed calendar date each year.                 THE A-Z OF
         Floating time – occupancy periods not restricted by calendar dates but restricted by season.

         Points – a symbolic measurement (i.e. a currency) related to a vacation club or timeshare ownership, used to
          establish a value for length of stay, seasons, unit sizes and resort locations and allowing a cer tain flexibility of how
          the “currency” is used.

         Biennial or alternate year – under a biennial for mat, an owner‟s use and occupancy rights recur every other year.

Timeshare-based holiday clubs (or vacation clubs) – “Discount travel clubs” have sometimes been referred to
incorrectly as “Holiday Clubs” but the distinction is clear. Holiday Clubs/Vacation Clubs encompass various systems
designed to offer flexibility of holiday reservations to their members. All are bui lt around, and underpinned by, a core
portfolio of traditional, proper ty-based, timeshare and club resor ts in multiple locations, supplemented with other holiday
options such as hotels and exchange alternatives either through use agreements with other resor ts or via an international
exchange company.

Member ship is not linked to a par ticular resor t but rather to a club with the obligations and benefits set out in its rules a nd
regulations. In general, the core accommodation and use rights, as well as the r eservation system, is held or controlled by
an independent trustee (or established under a registered company structure) to ensure the long-ter m protection of the
member s´ interests. Holiday Clubs follow the marketing, selling and disclosure requirements o f the EU Directive on

Trial membership programmes – allow consumers to try out holidays in timeshare resor ts without the long-term
commitment of a full, longer term membership in a timeshare club. The trial holiday packages often include thre e-to- five
weeks of holidays to be taken over a two- to-three year period at timeshare resorts. If less than 36 months, they are not
covered by the European Timeshare Directive but where promoted by OTE members such trial memberships have the
protection of cancellation rights.

Trustee – the entity holding legal ownership of the occupancy rights at the resorts, which underpin the timeshare owners‟
rights as members, for the life of the timeshare club.

U    nit – the ter m for a studio, apartment, lodge, chalet, villa, room or even a boat in which a timeshare owner acquires
     occupational r ights.

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V   OICE -- Vacation Owners‟ Independent Coalition in Europe, an independent, non-profit making organisation set up by
     OTE and TATOC to offer advice and assistance on timeshare and to safeguard the interests of owners and the
industry. The Europe-based body has its headquar ters in Brussels.

OTE                                    Consumer Enquiries                     Media Enquiries
Oak House                              OTE:                                   Flagship Consulting Ltd
Cours St Michel 100/3                  Tel: 00 322 533 3069                   The Media Centre
1040 Brussels                          Email:               19 Bolsover Street
                                                                              London W1W 5NA
Tel: 00 322 533 3060                   VOICE
Fax: 00 322 533 3061                   Tel: 0870 240 8993                     Tel: 020 7886 8440                       Email:                 Fax: 020 7886 8460


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