One of the pioneers in the Indian timeshare market, Karma Group has big plans to acquire more properties. John Spence, Founder and Chairman, Karma Group, shares the company’s plans for the next decade.
How do you evaluate the Indian timeshare market?
It’s changed enormously over the years. When we started our first resort in Goa, India, 25 years ago, it was an entirely new industry. Over the years, we’ve grown, and so have several other competitors. I think there’s much more awareness about the industry now, and our clients, largely Indians are a lot more travel savvy. We’re seeing an enormous change in the market. According to our analytical observations, a growing number of Indians are opting for our resorts when holidaying abroad. Hence, we are looking at buying more and more resorts not only in India but also in Europe, primarily as demand from Indian consumers wanting to come to Europe. We are currently focusing on Karma Bavaria, in Schliersee, a sought-after destination amongst Indians. When we started off, we did not really anticipate that it would grow to this level one day. We see that more and more Indian consumers will buy a timeshare in India, but they’ll utilize it as mechanics all around the world.
Karma Group has been one of the pioneers in the Indian timeshare market. What are your plans for the next decade in India?
Our plans for the next decade are extremely exciting, as we intend to grow at a fast rate globally, and have organic growth of about 15%, annually. We’re in an acquisitive phase and are now buying other companies. So, we are optimistic of doubling in size, over the next decade. In India, we are very keen to buy more resorts and are looking at developing properties in Ooty and Darjeeling. We have a target of two new resorts a year in India, which could well be exceeded elsewhere around the world. We’re buying more resorts in Europe and also in the Far East, in Indo-China, the area of Laos, Myanmar, Vietnam, which we believe are growing markets. We just celebrated our 25th Anniversary and I’m very proud of our success. India’s at the heart of our growth plan for our next decade; it is where we started, and I always say that India has been very special to us as a company, and to me personally. We see certainly see us developing more resorts in the country, as well as around the world where Indians will be keen to go.
Timeshare in India is still not considered a preferred holiday option, and holidaymakers see it as expensive. Does the timeshare industry require a perception of change?
I am a bit surprised that the new consumer sees it as expensive; we actually find the opposite to hold true. When people understand the cost of buying a timeshare against the cost of a single holiday, they do find it to be of very good value. I think this is one of those cases that if you asked 100 people who didn’t understand the products, they have heard that it was expensive. But you will also have 100 people who understand the product and either own or are considering owning it. We have observed that in most cases, the cost of the membership plan, which for instance, might last 20 years, is usually paid off in about the first five or six years. The manner in which holiday costs are increasing these days, the greatest thing about timeshare, is the fact that you’re essentially buying a season ticket now, for future use. And so, you don’t have to bear the consequences of price hikes. Many of our clients opt for a holiday in one-bedroom, two-bedroom, or even three-bedroom units for a fraction of the actual cost. What they’re getting is, a high-quality product, which gives them and their family not just an easy stay option, but a holiday experience.
One should also bear in mind that a lot of our owners are buying in India at prices that are relevant to the Indian marketplace, but they’re taking most of their holidays abroad in places like Australia, England, the Alps, France, or Italy. It becomes even more cost-effective because the reality is that the cost of that inventory internationally, is far more expensive than it would be if they were holidaying just in India. To be honest, I do think it represents fantastic value for money in terms of the industry.
How do you see Indian consumers using timeshare while holidaying abroad?
Indian consumers make for a high number of ‘aspirational travelers’, i.e. people who have dreamt of holidaying abroad. It’s been difficult for them, either because of the cost or airfares, non-convertibility of currency or whatever other reason it may be. That’s changing radically. The income level in India is increasing, and as we all know, airlines have reduced airfares and currency is more easily convertible now. Timeshare opens doors further because when they hold membership in our resorts or similar resorts, they have prepaid accommodations. So, not only do they not need to pay exorbitant amounts for accommodation, but they are also guaranteed of the facility. In fact, we offer vegetarian menus, keeping in mind the sensibility and needs of the Indian consumer. Some of our staff is also Indian, so I think a lot of Indian consumers who use timeshare and holiday abroad, like the fact that the price is locked in and they feel a certain comfort zone in an alien country.
How can governments help in establishing standards for the timeshare industry?
I think it’s important that there is an industry which is fair, honest, and ethical. It’s very important that the industry is left to thrive, and I totally support the government’s involvement. However, I am equally cautious, having seen the industry around the world where there is an involved government. Governments do many things very well, but sometimes the private sector, and particularly, entrepreneurs are better qualified. Hence a dialogue is essential, by which we can ensure a very positive future for both parties, and most importantly, the consumers. With regards to the Indian tourism industry, one thing that should be borne in mind about the timeshare is, for every Indian that uses our product to go out, there is a foreign client using his ownership to come in. It hasn’t been spoken about enough, and I think that we were a very big contributor to the inbound tourism for places like Goa. Because we are a club, it’s a guarantee for inbound tourism. I truly that people should do what they’re best qualified at. I think governments are not qualified to necessarily get involved in the mechanics of a private sector industry, which timeshare primarily is. However, there is ample scope for the two to work hand-in-hand.
