New rules will help boost Dubai's timeshare industry

One of the most important aspects of the legislation, which is currently under final review by the Real Estate Regulatory Authority and the Dubai courts, is that consumers now have the right to cancel their timeshare purchase within 10 days after the date of execution without penalty.

'People will have more time to sit back and think about their purchase and can walk away from the deal if they choose to do so,' said Dale Young, Vice President and General Manager of Marriott Vacation Club Middle East.

The new rules also require companies to provide a detailed disclosure statement that describes all of the features, amenities, and rules of operation of the timeshare, including an explanation of the consequences of nonpayment.

In addition, any monies paid to the operator must be kept in escrow by a third party.

Taken together, these requirements will help to protect consumers and 'cull the herd' of unreputable companies that tarnish the image of the timeshare industry, Young noted.

In terms of demand for timeshare property, Young said the Dubai market has been relatively immune to the financial crisis, as compared to Europe and the US.

In general terms, the timeshare market typically does better than the hotel sector during a recession, because people 'always place a premium on taking their family on vacation', even when other expenses are being cut.

By contrast, hotel companies take a greater hit during economic downturns because they rely on business travel for a significant portion of their revenue.

Another trend that is emerging in the industry is that consumers, especially in Asia, are demanding greater flexibility when they purchase timeshares, Young said. Customers are no longer satisfied with the old model of buying a timeshare for one week a year at a fixed time and fixed location.

Instead, operators in Asia are being forced to sell point-based timeshares that allow consumers to reserve time on a daily basis at a wide range of properties.

'They want to be able to come and stay for a day, rather than a week. It's almost as flexible as a hotel room,' Young said.

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