SAPPHIREZ ASSET

SOLUTIONS
Market for Second Homes
Understanding – Vacation Home
Vacation
Property owned generally for personal use
Ownership

A timeshare is a form of vacation property ownership.

Timeshare The use and costs of running the resort are shared among the owners

Vacation Renting out a furnished apartment or house on a temporary basis to

Rentals tourists as an alternative to a hotel

Vacation You trade your interval or week for new and different vacation experiences
Exchange at comparable resorts across the country and around the world

Segmentation of Vacation Home market internationally

International Demand Drivers

 Economy
Baby Boomers  Population
 Propensity to spend

 Income Levels
Interest Rates  Rate of borrowing

 Growth rate
 Attracting investment
 Government Initiatives
 Conferences
Tourism

Key movers of the Vacation Home market

Vacation Homes-Internationally
Leisure Ac ti viti es P ref erre d
Mode Of Purcha se F or A Vac ation Hom e
Tennis
5%
9% 14%
29%
10%
18%

Golf 11% 68%

20%
16%

Real Estate Owners Builders

Water Sports Boating Hunting/Fishing Golf Biking/Hiking Skiing Tennis

D esirabl e Attribut es In A Vac at ion Home

Key Learning's: 18%

 Internationally activities are critical aspects of Vacation Homes 38%

 Brokers / real estate agents play a critical role as channel partners 22%
 Locational advantage needs to be broadcast for individual property
22%

Close To Ocean/Lake/River Sporting Activities

Close To Resort Ares Mountains/Natural Destinations

Source: National Association Of Realtors 2006

 Vacation Home Buyers:
International
Distance (Miles) Vacation Home % Investment Property %
25 44 69
25-99 19 9
100-199 22 5
200-499 1 * Distances between residence & Vacation Home
500-999 3 3
1000-1499 * 6
Usually less than 100 miles
1500 and more 10 8
Median Distance 49 18
* Less than 1 %

Home Size (Sq.ft) Vacation Home % Investment Property %

500 4 1
501-1000 14 14
1001-1500 56 22
1501-2000 11 31 Size of home : 1000-1500 sqf
2001-2500 9 12
2501-3000 5 10
3000 and more 1 10
Median Size 1290 1700

Format California Coastal South Florida Golf Destinations Ski Destinations

Studio 600 600 700 NA
1 BDR 590 600 550 550
Average value per sq.ft 2 BDR 480 600 450 580
3 BDR NA NA 400 600
Premiums ($ 000) 50-150 50-300 50-150 50-100

Source: Economic Realtors Research

 US Vacation Home Market

• International Vacation Home

GDP (In Billion USD) Vacation home Industry (In Billion USD) market is maturing and
14000 14 seeing considerable growth
12000 0.10 % 12
• The US$ 13 billion Vacation
10000 10 Home industry in US is
0.10% of GDP as of 2005
8000 8
0.08 %
6000 6 • Multiple players having
unlimited product offerings
4000 0.05 % 4

2000 2
• GDP of US playing an
integral role for burst of
0 0 Vacation Home industry
1990 2000 2005

Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.S

Along with high growth rates comes heightened competition
Brands would soon start at exploiting other geographies
 India Vacation Home
GDP (In Billion USD)
900
• Given the current economic
trends we can draw the following
Vacation home Industry (In Billion USD) hypothesis:
0.8

800 0.10 %
0.7
- The Size of the Vacation Home
700
0.6
industry is approximately US$
600
0.5 0.757 billion or INR 34,150
500
0.4 Crore
400
0.3
300 0.08 %

200
0.2 • Experts predict the GDP growth
100 0.05 % 0.1 rate to be close to 8%, the same
0 0
would see a rise in income levels
1990 2000 2005 – A factor which is one of the key
growth drivers

• Generation X will boost the growth of Vacation Homes in India

•India the next growth driver for international companies
Indian Luxury Consumer: HNI

Married and has kids

Average age = 36-40

CWE= Mostly Male

42% live in joint families

Residing in posh localities

35% of wives working

Owns D/E segment car

44% traveling abroad for vacation,

at least once a year
Disposable income 9 lac p.a
 Affluent Map Of India

Predominantly luxury consumers reside

in the north and west

Source: Technopark
Vacation Home : Snapshot
• Vacation Home
• 100-200 kms from metros around a natural attraction
primarily hill stations, beaches
• International Vacation Homes in Dubai, London etc.
• Customers
– HNIs & NRIs
• Initial Value Proposition
– Variety & convenience of one stop shop
• Sustainable Value Proposition
– Needs based development
– Reach & access to NRIs
– Destination development and marketing
 Indian HNI : Primary Target
Products
• Vacation Home
• Purchase/Lease of Commercial
• Investment in Real Estate Funds/
REITs
Competitive Landscape
• Wealth Managers proffering
Equity & Debt instruments
• Dedicated sales team
representing high value assets
• Advertising & PR by builders &
marketers
Needs
• Prestige, Ego Value
• High Service Quality
• Large portfolio of options
• Customized Advisory
• Relationship Building
• Credibility & Accountability
Opportunities
• Convenience of one stop shop for
real estate needs
• Advice rather than push
• Broaden the horizon to look at
new emerging opportunities like
equity involvement
• Wealth Management perspective
 NRI : Secondary Target

Products Needs
• Vacation Home • High Service Quality
• Equity investment in Commercial , Hotel • Large portfolio of options
Real Estate Development • Customized Advisory
• Relationship Building
Competitive Landscape • Credibility & Accountability
• Wealth Managers proffering Equity &
Debt instruments
• Dedicated sales team representing high Opportunities
value assets
• Convenience of one stop shop for real
estate needs
• Advice rather than push
• Broaden the horizon to look at new
emerging opportunities like equity
involvement
• Reach to micro-segments
Key Success Factors
• Direct Selling & Marketing for HNIs, NRIs
– Dedicated sales and service team for HNIs / NRIs
– Dedicated processes and systems to manage service & sales issues
– Dedicated telemarketing & call centre support

• Direct marketing strategy comprising of

internet marketing and other channels

• Pioneering new and exciting initiatives

– Example :Halfshare.com specializes in the shared ownership of
luxury vacation properties throughout North America.
• They help buyers find their ideal vacation property or Vacation Home while
matching them with the right co-owner through a Buyer Match Plan
Key Success Factors
• Continuous inventory acquisition by a
dedicated team
– Dedicated team to scout for projects under development,
completed projects, re-sale inventory
– Acquisition could be followed by
• Re-packaging the real estate to make it more appealing to the
target buyer

• Sound Real Estate Knowledge Base

– Ability to track trends and assess impact for HNIs
– Ability to give a wealth management perspective and offer

• Good Service Quality

– Training & People development to offer good service experience
– Personalized service to HNIs/NRIs
– Robust processes for transaction management
– Strong performance management system
Call Sapphirez: Rajjeet Chandra
Mobile : +91 9867974602
Email : rajjeet@sapphirez.co.in