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The Alternative Ownership Conference Asia Pacific, 2012

AOCAP 2012 will continue to build on the success of the previous 4 years and cement its place as south-east Asia’s pre-eminent Conference which is wholly focused upon resort development, mixed use and recreational real estate in all its formats, including branded residences, condo-hotels, fractional interests, private residence clubs and vacation ownership. AOCAP 2012 aims to provide an unprecedented level of industry knowledge and data within one single event, for the resort development and shared ownership industry, so as to help generate a deeper and more positive understanding of the industry’s potential to deliver attractive financial returns for developers and investors, as well as its wider economic benefits for regional tourism organizations and planners, for service providers and other tourism industry stakeholders. The theme of this year’s conference, “Understanding the Industry’s DNA”, is designed to offer delegates authoritative and accurate insights into the global resort development industry, whilst at the same time focusing upon a region which contains some of the world’s most important emerging markets, but where many of the industry’s products and practices are either little known or in some cases, just not well understood.   The conference will feature the presentation of key findings from a newly completed study sponsored by the ARDA International Foundation and undertaken by the internationally respected consultancy firm, Oxford Economics, relating the size and scope of the global industry. This study is considered to be the most thorough analysis of the industry worldwide, ever undertaken. The key findings derived from this research are in themselves a sufficient justification for delegates to attend AOCAP this year, since this is the first time that this data will have been publicly presented. Some Background On TheShared Ownership Industry inSouth-East Asia An historical review of how the shared ownership industry within south-east Asia has developed over time plus the recognition of some of its growing pains and its challenges, has produced a range of findings and conclusions which have shaped the development of this year’s conference program and the topics chosen for this year’s event. The south-east Asian market has experienced fragmented growth since vacation ownership was first introduced into the region as long ago as the 1980’s, with the notable exception of Japan, where the concept had first appeared as far back as 1969! The earliest resorts within south-east Asia were developed in Singapore, Thailand and Malaysia, with a number of offsite sales centres also springing up in key consumer markets, primarily offering discounted inventory at European, Indian and North American resorts, even though at that time, low cost air travel to those far distant resort destinations was not available! To illustrate this point graphically, the pie chart below, based upon data from an RCI survey of its south-east Asian members, carried out in 1996, disclosed that some 21% of those members actually owned their vacation ownership interests at resorts located in Spain!  

At one point, Singapore had some 27 active off-site sales operations, 75% of which were not developer controlled, primarily offering inventory in both short haul and long haul destinations, at a time when it was not proven that buyers would purchase in destinations which were only accessible on flights of over 12 hours duration. Industry growth has also been impeded by the absence of an active regional trade association, the lack of appropriate, balanced regulatory frameworks across most of the regional jurisdictions, save for Malaysia which regulated the industry back in 1992, as well as a virtual absence of major internationalbranded developers and operators. There have also been a few issues with product quality - by way of illustration; the average price of a vacation ownership interest purchased in North America in 2010 was circa. $18,000; in Australasia it was $24,138 whilst in Asia, it was only $6,969 reflecting not simply lower product and HR costs, but also mirroring the costs of delivering a much more modest and far less comprehensively equipped vacation ownership offering. Recognizing some of those issues and challenges, AOCAP’s advisory board set out to design a conference program which would firstly put the global industry in perspective, then examine how the industry generates huge economic impacts within destination resort areas and beyond. It was also considered especially important to analyze the industry’s business At one point, Singapore had some 27 active off-site sales operations, 75% of which were not developer controlled, primarily offering inventory in both short haul and long haul destinations, at a time when it was not proven models so that the income streams and the profit potential could be fully understood. Given the huge potential which exists within the Peoples’ Republic of China for all forms of shared ownership offerings, a lengthy session has been devoted solely to this market. This session will feature the presentation, again for the first time, of newly completed research undertaken by Jones Lang LaSalle Hotels, China into the shared ownership market within the PRC. The presentation will be followed by a legal panel comprising lawyers with working knowledge of the legal regimes around the region, who will look at some of the issues to be addressed in developing and launching a shared ownership project within the PRC, as well as in marketing and selling product from other jurisdictions to the China affluent consumer market. A session has been given over solely to branded residences, given the momentum which this concept has quickly generated in brand-conscious China and many of its neighbouring territories. An industry leaders’ panel will provide an opportunity for delegates to hear the views of senior executives from both regional and global brands, regarding what the industry must do to grow within the region and exploit the unprecedented opportunities which are becoming apparent. Rising disposable income in many markets is fuelling outbound travel at a level not previously witnessed and new destinations are being opened up, many of which by reason of their seasonality alone, would support mixed use projects incorporating shared ownership. This will follow a presentation by a senior executive from the Pacific Asia Travel Association [“PATA”] which will analyse the growth patterns, trends and forecasts in travel and tourism across Asia-Pacific over the next 15 years and look at the impacts which the low cost carriers have had within the region. Sessions on day two look at how other markets have developed a range of developer and consumer financing programmes and most importantly, innovated so as to create lending structures and loan instruments which have enabled developers to access capital and generate additional revenue through the provision of consumer-end financing, ahead of the development of a secondary market for consumer loan portfolios through the medium of securitization. Over the two days of plenary sessions, the conference will also look at the reasons why many global hospitality brands have embraced shared ownership, in a number of different formats, with positive results. Delegates will discover how mixed use resorts incorporating shared ownership can generate loyal repeat customers, predictable occupancies and deliver enhanced operational synergies. In choosing Hong Kong as the venue for this year’s conference, the organizers were mindful of the need to promote the industry to developers, operators, investors and tourism organizations within the Peoples’ Republic of China, as well as to the emerging south-east Asian markets where, in the shorter term, tourism growth will likely be constrained simply by reason of the lack of infrastructure or airport capacity.   Recognizing some of those issues and challenges, AOCAP’s advisory board set out to design a conference program which would firstly put the global industry in perspective, then examine how the industry generates huge economic impacts within destination resort areas and beyond.