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Second Homes or Vacation Homes

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					                          Second Homes
Market for Second Homes
Understanding – Vacation Home
Vacation
                  Property owned generally for personal use
Ownership


                  A timeshare is a form of vacation property ownership.
Timeshare         The use and costs of running the resort are shared among the owners



Vacation          Renting out a furnished apartment or house on a temporary basis to
Rentals           tourists as an alternative to a hotel




Vacation          You trade your interval or week for new and different vacation experiences
Exchange          at comparable resorts across the country and around the world


           Segmentation of Vacation Home market internationally
International Demand Drivers

                           Economy
 Baby Boomers              Population
                           Propensity to spend



                           Income Levels
 Interest Rates            Rate of borrowing


                             Growth rate
                             Attracting investment
                             Government Initiatives
                             Conferences
 Tourism




    Key movers of the Vacation Home market
Vacation Homes-Internationally
                          Leisure Ac tivities Preferred
                                                                                        Mode Of Purchase F or A Vacation Home
           Tennis
                                      5%
                                9%                                                                         14%
                                               29%
                          10%
                                                                                                     18%


 Golf                     11%                                                                                              68%


                                             20%
                                16%

                                                                                                  Real Estate     Owners     Builders


 Water Sports   Boating   Hunting/Fishing   Golf     Biking/Hiking   Skiing   Tennis

                                                                                  D esirable Attributes In A Vacation Home


  Key Learning's:                                                                                    18%
   Internationally activities are critical aspects of Vacation Homes                                               38%

   Brokers / real estate agents play a critical role as channel partners
                                                                                               22%
   Locational advantage needs to be broadcast for individual property
                                                                                                           22%



                                                                         Close To Ocean/Lake/River               Sporting Activities
                                                                         Close To Resort Ares                    Mountains/Natural Destinations
                                                                                       Source: National Association Of Realtors 2006
          Vacation Home Buyers:
          International
         Distance (Miles)         Vacation Home %            Investment Property %
                   25                   44                            69
              25-99                     19                            9
             100-199                    22                            5
             200-499                    1                             *                     Distances between residence & Vacation Home
             500-999                    3                             3
                                                                                            Usually less than 100 miles
            1000-1499                   *                             6
         1500 and more                  10                            8
         Median Distance                49                            18
* Less than 1 %



              Home Size (Sq.ft)       Vacation Home %            Investment Property %
                        500                   4                             1
                    501-1000                 14                            14
                   1001-1500                 56                            22
                   1501-2000                 11                            31                   Size of home : 1000-1500 sqf
                   2001-2500                  9                            12
                   2501-3000                  5                            10
                  3000 and more               1                            10
                   Median Size               1290                          1700

                                                    Format             California Coastal         South Florida           Golf Destinations   Ski Destinations
                                                    Studio                      600                   600                       700                 NA
                                                    1 BDR                       590                   600                       550                 550
     Average value per sq.ft                        2 BDR                       480                   600                       450                 580
                                                    3 BDR                       NA                     NA                       400                 600
                                              Premiums ($ 000)               50-150                 50-300                     50-150             50-100

                                                                                                         Source: Economic Realtors Research
        US Vacation Home Market

                                                                                 •   International Vacation Home
        GDP (In Billion USD)      Vacation home Industry (In Billion USD)            market is maturing and
14000                                                                       14       seeing considerable growth
12000                                                      0.10 %           12
                                                                                 •   The US$ 13 billion Vacation
10000                                                                       10       Home industry in US is
                                                                                     0.10% of GDP as of 2005
 8000                                                                       8
                               0.08 %
 6000                                                                       6    •   Multiple players having
                                                                                     unlimited product offerings
 4000         0.05 %                                                        4


 2000                                                                       2
                                                                                 •   GDP of US playing an
                                                                                     integral role for burst of
    0                                                                       0        Vacation Home industry
                1990           2000                        2005




             Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.S
             Along with high growth rates comes heightened competition
             Brands would soon start at exploiting other geographies
 India Vacation Home
                                                                                       •    Given the current economic
                                                                                            trends we can draw the following
       GDP (In Billion USD)            Vacation home Industry (In Billion USD)              hypothesis:
900                                                                              0.8

800                                                             0.10 %
                                                                                 0.7
                                                                                           - The Size of the Vacation Home
700
                                                                                 0.6
                                                                                             industry is approximately US$
600
                                                                                 0.5         0.757 billion or INR 34,150
500
                                                                                 0.4         Crore
400
                                                                                 0.3
300                           0.08 %

200
                                                                                 0.2   •    Experts predict the GDP growth
         0.05 %                                                                  0.1
                                                                                            rate to be close to 8%, the same
100
                                                                                            would see a rise in income levels
  0                                                                              0
             1990               2000                           2005                         – A factor which is one of the key
                                                                                            growth drivers


      • Generation X will boost the growth of Vacation Homes in India
      •India the next growth driver for international companies
Indian Luxury Consumer: HNI

Married and has kids

Average age = 36-40

CWE= Mostly Male

42% live in joint families

Residing in posh localities

35% of wives working

Owns D/E segment car

44% traveling abroad for vacation,
at least once a year
 Disposable income 9 lac p.a
 Affluent Map Of India




Predominantly luxury consumers reside
  in the north and west

                                        Source: Technopark
Vacation Home : Snapshot
• Vacation Home
   •  100-200 kms from metros around a natural attraction
     primarily hill stations, beaches
   • International Vacation Homes in Dubai, London etc.
• Customers
   – HNIs & NRIs
• Initial Value Proposition
   – Variety & convenience of one stop shop
• Sustainable Value Proposition
   – Needs based development
   – Reach & access to NRIs
   – Destination development and marketing
    Indian HNI : Primary Target
                                       Needs
Products                               • Prestige, Ego Value
•   Vacation Home
                                       • High Service Quality
•   Purchase/Lease of Commercial
                                       • Large portfolio of options
•   Investment in Real Estate Funds/
                                       • Customized Advisory
    REITs
                                       • Relationship Building
                                       • Credibility & Accountability
Competitive Landscape
•   Wealth Managers proffering
    Equity & Debt instruments
•   Dedicated sales team
    representing high value assets     Opportunities
•   Advertising & PR by builders &     •   Convenience of one stop shop for
    marketers                              real estate needs
                                       •   Advice rather than push
                                       •   Broaden the horizon to look at
                                           new emerging opportunities like
                                           equity involvement
                                       •   Wealth Management perspective
    NRI : Secondary Target

Products                                      Needs
•   Vacation Home                             • High Service Quality
•   Equity investment in Commercial , Hotel   • Large portfolio of options
    Real Estate Development                   • Customized Advisory
                                              • Relationship Building
Competitive Landscape                         • Credibility & Accountability
•   Wealth Managers proffering Equity &
    Debt instruments
•   Dedicated sales team representing high    Opportunities
    value assets
                                              •   Convenience of one stop shop for real
                                                  estate needs
                                              •   Advice rather than push
                                              •   Broaden the horizon to look at new
                                                  emerging opportunities like equity
                                                  involvement
                                              •   Reach to micro-segments
Key Success Factors
• Direct Selling & Marketing for HNIs, NRIs
   – Dedicated sales and service team for HNIs / NRIs
   – Dedicated processes and systems to manage service & sales issues
   – Dedicated telemarketing & call centre support


• Direct marketing strategy comprising of
  internet marketing and other channels

• Pioneering new and exciting initiatives
   – Example :Halfshare.com specializes in the shared ownership of
     luxury vacation properties throughout North America.
       •   They help buyers find their ideal vacation property or Vacation Home while
           matching them with the right co-owner through a Buyer Match Plan
Key Success Factors
• Continuous inventory acquisition by a
  dedicated team
   – Dedicated team to scout for projects under development, completed
     projects, re-sale inventory
   – Acquisition could be followed by
       • Re-packaging the real estate to make it more appealing to the
         target buyer


• Sound Real Estate Knowledge Base
   – Ability to track trends and assess impact for HNIs
   – Ability to give a wealth management perspective and offer


• Good Service Quality
   –   Training & People development to offer good service experience
   –   Personalized service to HNIs/NRIs
   –   Robust processes for transaction management
   –   Strong performance management system
Master Sun Consulting
www.mastersungroup.com
Mobile : +91 9920803060
Email : sarvajeet@strategyexecution.in

				
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