Back in May, Jamaica’s hospitality industry became a little more diverse with the implementation of the Timeshare Vacations Act, which allows developers to build properties for use as timeshare accommodation.
The country’s Tourism Ministry is actively promoting investment in timeshares as a way to both cash in on new travel trends and appeal to a new demographic of visitors that prefers staying in apartment-style accommodations rather than traditional hotel rooms—in other words, the Airbnb generation.
To that end, the Ministry will be hosting a group of investors from Los Cabos, Mexico, next month to explore business opportunities in the local timeshare industry.
The Act
When the Timeshares Vacation Act took effect in May, Minister of Tourism Edmund Bartlett said that its objectives were twofold: “Firstly, it will give legal recognition to timeshare vacation schemes in the form of right-to-use agreements, which are timeshare contracts and deeds issued in relation to these agreements.”
“Secondly, it also regulates the marketing, promotion and provision of timeshare accommodation and will entail the establishment of a Timeshare Vacations Registry,” he said.
The Ministry, Bartlett said, would collaborate with the Real Estate Board, trade and investment group JAMPRO and other partners to roll out a marketing initiative aimed at attracting developers as well as local and international buyers.
The Next Steps
At the project launch of New Kingston’s latest hotel, The Renfrew, earlier this week, Director of Tourism Paul Pennicook delivered remarks on behalf of Bartlett. Pennicook said that Jamaica has “significant potential” for timeshare investment for both individual owners and larger businesses.
Director of Tourism Paul Pennicook (right), looks at the design for The Renfrew at the launch of the hotel project in New Kingston on July 18. Architect Evan Williams (left) and of Downsound Records CEO Josef Bogdanovich, are the partners in the project.
“I can easily see many Jamaicans in our over three-million-strong diaspora making use of timeshare as their way of owning just a little piece of Jamaica and many foreigners utilizing the opportunity to own a little piece of paradise,” Pennicook said in his speech.
The Renfrew is being marketed as a timeshare property with 32 rooms. When it opens in October 2017, the hotel will be the result of a partnership between architect Evan Williams and Downsound Records CEO Josef Bogdanovich, who has been expanding his investments in the island over the last decade. (Bogdanovich declined to share his level of interest in the project, which is expected to cost $7 million for construction alone.)
Further investment in timeshares will help boost Kingston’s hotel room count, which is currently at 2,354. With such a small number of rooms, former Minister of Tourism Wykeham McNeill said, Kingston is missing out on large-scale events that can bring in business travelers. “The fact of the matter is that it has been a limiting factor for us when we have big events and want to have big events in Kingston and there are not enough rooms. So I am happy to see this development,” he said.
The Value of Timeshares
The global timeshare industry is valued at nearly $114 billion, and global hospitality brands are looking to get their piece of the pie.
Last month, Hilton Worldwide Holdings filed Form 10 Registration Statements with the U.S. Securities and Exchange Commission to spin its timeshare business into a publicly traded company. Hilton Grand Vacations’ portfolio includes 46 resorts with 7,402 units. For the year ending on December 31, 2015, HGV generated total revenues of $1.5 billion, net income of $174 million, adjusted EBITDA of $373 million, and return on invested capital of 41.3 percent.
HGV will be in good company alongside other branded timeshare companies. Wyndham Worldwide’s vacation program has approximately 213 resorts representing 24,000 units. Marriott, meanwhile, has approximately 61 resorts representing 12,807 units; Diamond Resorts International (pictured above) has approximately 109 resorts representing 12,000 units; and Interval Leisure Group has approximately 38 resorts representing 6,000 units after its recent acquisition of Vistana Signature Experiences from Starwood Hotels and Resorts Worldwide.