PRESS RELEASE - August 1999

MANAGEMENT A CRITICAL ISSUE AS TIMESHARE INDUSTRY MATURES

With the maturing of the timeshare industry and aging of original resorts, effective management is becoming an increasingly vital factor to the success of these holiday complexes - and hence the sector - once the weeks are sold out.

This problem is exacerbated in some cases by inexperienced resort managers or developers who may under-provide for replacement of fittings, furnishing and repairs to the building. While this does not have a serious implication for the first 5-10 years of a resort’s life, experience is showing that any shortage of funds can impact in many ways on the overall experience of the timeshare owners’ holiday.

Rioma Cominelli, director of Optima Management Services which has been involved in the timeshare industry since its inception in 1983, says that the key is to keep levies as low as is reasonable while including a 5-8 year replacement programme for furniture and fittings. "Studying productivity levels and providing on job skills training can effectively reduce labour demands which singularly constitutes one of the highest cost factors".

In one large resort of 120 apartments reviewed by Optima Management Services, labour productivity was 50% below expectation. "In these cases a dedicated task force, through focused on measuring timing of specific tasks, training, and day planners as well as routine monitoring programmes, can double productivity or, alternatively, halve labour costs", says Cominelli. She adds that this is critical as most original resorts are now well used.

Cominelli recommends resort management companies which are affiliated to the Timeshare Industry of South Africa (TISA). "These companies are exposed to specific rules and industry synergies which apply to timeshare resorts which differ to Shareblock or Sectional Title Body Corporate Management for residential owners.

She believes that point schemes or Club Managers where timeshare buyers own a membership of holiday points have assisted the industrial in general. "Standards in resort management have been improved due to the vast knowledge of clubs in the timeshare resorts in which their stock for their members is held".

A case in point is Flex-Club, a product of the Club Leisure Group, which owns timeshare stock in over 150 resorts throughout South Africa. Their management arm attends most annual general meetings and, in over 40 of the resorts, they are represented on the board of the Share Block Company or Body Corporate.