Developments April-May 2014 - (Page 40)

INTERNATIONAL The People's Republic of China-Should You Be There? BY JIM SABOT C Jim Sabot is a principal of J Sabot Associates, based in Australia. He has served the Asia Pacific region's largest publicly held vacation ownership companies at the executive level and has recently provided consulting services to the developer of one of China's largest multi-use recreational sites. His e-mail is jsabot1@gmail.com. 40 - Developments arda.org hina has been one of the most confounding markets for timeshare developers since the People's Republic of China (PRC) began opening its doors to Western businesses 25 years ago. The barriers to entry have always been high-but not impossible-for an operator who wants to provide adequate safeguards for both its own business and its clients. But is it worth it? Is there now a large enough spending class to justify the exercise? A Question of Timing Before deciding if China is right for your brand, there are a myriad of factors to consider. Among them is the all-important question of the consumer-would they even consider a timeshare product? What type would appeal most to this demographic and culture? Further, the unpredictability of the Chinese legislative and regulatory process has a large influence on both consumer behavior and the ability to do business on the ground level. Legislative decisions regarding property ownership for foreigners and citizens are often passed without much warning. Foreign companies establishing a business in China have found the bureaucracy surrounding the process bewildering, time-consuming, and costly. There is little transparency within the system and not much opportunity for appeal. It is hard to plan a business in the midst of such uncertainty. But it is possible for those who can see the panorama of opportunities presented by an early entry. The following will attempt to bring to light some basic questions that may be helpful in sparking The right business with the right resources could capitalize on the world's largest market... conversations about your involvement in the world's second largest economy. Brief Back Story There has been a shared ownership presence in China for the last two decades. The format has varied from five- to fifty-year right-to-use models, with sales made mostly offsite. Timeshare is rarely more than leased hotel product or serviced apartment type property arrangement. Average purchase prices have been generally less than $10,000. Sales and marketing is often rudimentary, conducted without benefit of any regulatory governance. Indeed, timesharing is not even a recognized commercial enterprise in China-not surprisingly, the product's reputation in China is often negative. Over the life cycle of Chinese timesharing, there have been about 40 different companies operating internally. At the time of publication, less than 20 are still operational and less than five are in active sales-the market has a very low penetration rate. http://www.arda.org

Table of Contents for the Digital Edition of Developments April-May 2014

UP FRONT
FIRST WORD
AROUND THE INDUSTRY
MEMBER PROFILE
TRENDS
INTERNATIONAL
LEGAL
LET'S ROC
RE-INNOVATE: FROM LEGACY TO CURRENCY
RECIPE FOR GROWTH: KEY INGREDIENT FOR SUCCESS
PROCESS AND PROGRESS
TAPPING IN
WIN
CHARITY SPOTLIGHT
FINANCE
AIF
RESORT OPS
MEMBERSHIP
MEMBERSHIP UPDATES
LAST WORD

Developments April-May 2014

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