Download - Second homes or vacation homes
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Market for Second Homes
Segmentation of Vacation Home market internationally
Vacation Ownership
Property owned generally for personal use
Timeshare A timeshare is a form of vacation property ownership. The use and costs of running the resort are shared among the owners
Vacation Rentals
Renting out a furnished apartment or house on a temporary basis to tourists as an alternative to a hotel
Vacation Exchange
You trade your interval or week for new and different vacation experiences at comparable resorts across the country and around the world
Understanding – Vacation Home
International Demand Drivers
Economy Population Propensity to spend
Income Levels Rate of borrowing
Growth rate Attracting investment Government Initiatives Conferences
Baby Boomers
Interest Rates
Key movers of the Vacation Home market
Tourism
Vacation Homes-Internationally
Source: National Association Of Realtors 2006
Desirable Attributes In A Vacation Home
38%
22%
22%
18%
Close To Ocean/Lake/River Sporting Activities
Close To Resort Ares Mountains/Natural Destinations
Leisure Activities Preferred
29%
20%16%
11%
10%
9%5%
Water Sports Boating Hunting/Fishing Golf Biking/Hiking Skiing Tennis
TennisMode Of Purchase For A Vacation Home
68%
18%
14%
Real Estate Owners Builders
Golf
Key Learning's:
Internationally activities are critical aspects of Vacation Homes
Brokers / real estate agents play a critical role as channel partners
Locational advantage needs to be broadcast for individual property
Vacation Home Buyers: International
Distance (Miles) Vacation Home % Investment Property %
25 44 69
25-99 19 9
100-199 22 5
200-499 1 *
500-999 3 3
1000-1499 * 6
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
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
2 BDR 480 600 450 580
3 BDR NA NA 400 600
Premiums ($ 000) 50-150 50-300 50-150 50-100
Distances between residence & Vacation HomeUsually less than 100 miles
Size of home : 1000-1500 sqf
Average value per sq.ft
Source: Economic Realtors Research
US Vacation Home Market
• International Vacation Home market is maturing and seeing considerable growth
• The US$ 13 billion Vacation Home industry in US is 0.10% of GDP as of 2005
• Multiple players having unlimited product offerings
• GDP of US playing an integral role for burst of Vacation Home industry 0
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1990 2000 2005
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GDP (In Billion USD) Vacation home Industry (In Billion USD)
Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.SAlong with high growth rates comes heightened competition Brands would soon start at exploiting other geographies
0.05 %
0.08 %
0.10 %
• Given the current economic trends we can draw the following hypothesis:
- The Size of the Vacation Home industry is approximately US$ 0.757 billion or INR 34,150 Crore
• Experts predict the GDP growth rate to be close to 8%, the same would see a rise in income levels – 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
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1990 2000 2005
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GDP (In Billion USD) Vacation home Industry (In Billion USD)
0.05 %
0.08 %
0.10 %
India Vacation Home
Disposable income 9 lac p.a
Owns D/E segment car
Residing in posh localities
Average age = 36-40
CWE= Mostly Male
Married and has kids
42% live in joint families
35% of wives working
44% traveling abroad for vacation, at least once a year
Indian Luxury Consumer: HNI
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 • Vacation Home• Equity investment in Commercial , Hotel
Real Estate Development
Competitive Landscape• Wealth Managers proffering Equity &
Debt instruments• Dedicated sales team representing high
value assets
Needs• 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
• 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
Contact Us• Sarvajeet Chandra +91 9920803060,[email protected],
• Visit Us at www.mastersungroup.com