IFA Hotels & Resorts and Tijaria launch $50m vacation club
International hotel and real estate developer IFA Hotels & Resorts (IFA HR) has joined forces with Kuwait-based Tijaria to launch their first-ever vacation club business. The announcement was made on the opening day of the 2014 Arabian Hotel Investment Conference. The $50m joint venture brings together two significant hospitality forces in the Middle East. IFA Hotels & Resorts’ global holdings include properties ranging from the cutting-edge YOTEL brand to hotels and mixed-use developments operated by Fairmont, Mövenpick, Four Seasons and Sheraton. Tijaria’s holdings include the stunning Hotel Missioni and Symphony Hotels in Kuwait.
Talal Al-Bahar, Chairman and Group CEO, IFA HR, believes the Club fills a gap in the current market, “Aria Vacation Club is the first Middle-Eastern backed vacation club with the capacity to dominate markets in MENA, South East Asia, Europe and North America. We have done our research and have addressed previous barriers to this market. We have a number of wold-class assets in our stable, a proven executive team in place, the capacity to leverage the region’s most comprehensive consumer finance solution and a well-respected JV partner in Tijaria. We are extremely happy that Tijaria has partnered with us on Aria and we hope that it will be the first of many exciting joint ventures between our two companies.”
These fundamentals combined with IFA HR’s ownership interest in RCI Middle East puts Aria Vacation Club in a position to build the strongest collection of exchange partnerships in MENA and SE Asia and to capitalize on its first-mover advantage in Dubai.
Annually, Dubai attracts approximately 6.4million leisure visitors and boasts year-round occupancy rates of 70%. These visitors, drawn each year to the city’s stunning beaches, wide variety of attractions, amenities and events, make Dubai an ideal home base to launch a vacation club.
Abdul Fatah M. R. Marafie, Chairman & Managing Director, Al-Tijaria added: “Timeshare is a USD$14billion global business, of which the Middle East is the smallest contributor at roughly USD$36million. When compared to another emerging market – Africa – which represents approximately $616m, the room for growth is staggering. That makes it an extremely appealing concept to investors looking for new opportunities to expand their global reach.
“Aria fits perfectly within our company mandate for practical and innovative solutions that are flexible enough to meet the changing needs of our customers, yet geographically expansive enough to benefit of all our stakeholders. Beyond our shared Kuwaiti roots, we see a great deal of synergy between the strategic goals of our company and those of IFA Hotels & Resorts. We view Aria Vacation Club as the first stepping stone in a long and mutually beneficial business relationship,” stated Marafie.
Although starting regionally, Aria intends to have global-appeal while remaining sensitive to the nature of its home market. Sharia-compliant financing, for instance, will be easily available to qualified members.
Joe Sita, CEO of IFA Hotel Investments, the asset management arm of IFA HR, will lead the Aria project and is keen to honour its commitment to the Club’s Middle Eastern roots: “Aria’s geographic footprint is geared toward serving its home market. Our initial focus is on growing the Club into key locations such as London, Singapore and Makkah. Expansion into tourism hot-spots and growth areas that are highly attractive to both Middle Eastern and other regional travellers such as Turkey, Malaysia and Indonesia are also a priority. The Aria goal is a balance of strategy and opportunity.”
Beyond the commercial necessity to deliver solid returns to investors, Aria’s mission is to provide its members with ‘unparalleled vacation experiences that generate a lifetime of cherished memories’. To deliver on this mission, Aria aims to partner with third party developers who can bring high-quality inventory into the club quickly. Selected third-parties stand to benefit from a number of strategic advantages.
In his AHIC project briefing, Ben Dedopulos, Project Director, Aria Vacation Club, outlined the many advantages that vacation clubs bring to the table: “As a vacation club’s member base continues to increase, these members become the very pinnacle of an operator’s loyalty ladder. Members tend to spend more freely while on-site, having no ‘accommodation’ costs associated with their stay. They are stable and predictable in their usage, and less likely to be negatively affected by market conditions.
“However, the most exciting aspect of a vacation club business is how you can widen members’ usage options through partnerships and agreements. More and more operators are creating private partnership programmes with other hospitality partners to bring additional options to this valuable group. Through simple monetization programmes, vacation clubs are able to offer members usage at partner accommodation simply through an internal transfer of points. These partnerships can truly differentiate a product by exceeding guest expectations, while also helping hospitality partners to drive occupancy from a closed group of high-spending members.”
The points-based Aria Vacation Club is expected to begin formal operation in 18 months’ time, when its flagship Dubai property – Kingdom of Sheba – opens on the crescent of the Palm Jumeirah.
“We are planning to use Kingdom of Sheba as the ‘home resort’ for the programme, but we are also in discussions with additional investors, developers and hospitality partners. If another project of the right calibre comes on board and everything lines up, we see no reason to wait for Aria’s consumer launch,” concluded Sita.