Our specialist, Mr. Rudolf Hever spoke on November 15, 2012 at the Vietnam Hospitality Management Conference named Catching The Growth Curve With The Right Strategy, where he is also interviewed about Vietnam tourism and hospitality. The conference held by Irving Seminar and Training Vietnam is designed to bring all investors, hotel owners, operators who expect right solutions from specialists, consultants and service & technology providers to take their developments and operations up to the next level. Mr. Hever discussed the topic of Fractional Sale and Timesharing Models (Mô hình bán quyền sở hữu và chia sẻ kì nghỉ) along with their opportunities and risks. Also, the broadcasted video revealed other opinions on hospitality market insights. What is Fractional sale and timesharing? . Whole ownership . Whole ownership with rental pool . Fractional – quarter share . Fractional – twelfth share . Timeshare . Fractional vs whole ownership . Exchange and pointing systems . Benefits of fractional sale and timesharing models . Risks . Case studies on fractional and timesharing models Hope to see you at http://blog.alternaty.com/

1. Fractional Sale & Timesharing
Models for Developers
Opportunities & Risks
Presented by:
Rudolf Hever
Executive Director
rudolf.hever@alternaty.com
+84 933 902 530

2. Slide 2 15/10/2012
Presentation outline
Alternative real estate products
Whole ownership
Whole ownership with rental pool
Fractional – quarter share
Fractional – twelfth share
Timeshare
Fractional vs whole ownership
Exchange and pointing systems
Benefits
Risks
Case studies

3. Slide 3 15/10/2012
Timesharing
Ninh Van Bay
Condotel
Best Western
Nha Trang
Branded Residence
Hyatt Regency Danang
Freehold Ownership
Ocean Villas Danang
Fractional Ownership
Beach Republic
Koh Samui, Thailand
Leasehold Ownership
The Sanctuary Long Hai
Private Residence & Destination Club
The Ritz-Carlton
Destination Club
Hotel Room
Intercontinental Saigon
TRADITIONAL ALTERNATIVE
Alternative real estate products

4. Slide 4 15/10/2012
Full price
No obligation for specific standard of furniture
No rental management provided
Typically use weekends or holiday weeks (actual
usage is approximately 8 - 13 weeks per year)
Limited option of management (no rental)
Possible investment gain:
1. Capital appreciation only
Alternative real estate products
Whole ownership

5. Slide 5 15/10/2012
Alternative real estate products
Whole ownership with rental pool
AUnit CB D
Gross
Rent
$1,250 $1,000 $1,500 $1,250
Rental Pool (total rental income) = $5,000
Minus $500 Management Fee = $4,500
Minus $750 Maintenance Fee = $3,750
20% Developer 80% Owners
Net
Rent
$750 $750 $750 $750$750
1 2 3 4

6. Slide 6 15/10/2012
Alternative real estate products
Whole ownership with rental pool
Full price
Obligation of a specific furniture package
Typically management company is involved
Typically owner usage allowed is 30 - 60 days
High management fee (International brand)
Possible investment gains:
1. Capital appreciation
2. Rental pool system (Revenue - operations cost -
developer share)
In Vietnam this model has had mixed success
(the selling price is too high and low returns)

7. Slide 7 15/10/2012
Alternative real estate products
Fractional – quarter share
AUnit
Owner
Usage
Owners
3 months 3 months 3 months3 months
1 2 3 4
Usage
1 month 6 weeks 2 weeks
Rental
Pool
Exchange
System

8. Slide 8 15/10/2012
Quarter of the price (1/4) + Premium for fractional club
membership
Recommendation on specific furniture package
Typically no management company involved, managed by the
developer
Typically owner usage allowed up to 13 weeks (3 months)
Rental pool option available for unused weeks
Exchange program for owners
Floating weeks or fixed weeks
Membership club benefits (Golf club, gym, spa, etc)
Possible investment gains:
1. Capital appreciation
2. Rental pool system (Revenue - operations cost - developer
share)
3. Fraction share appreciation
Alternative real estate products
Fractional – quarter share

9. Slide 9 15/10/2012
Alternative real estate products
Fractional – twelfth share
AUnit
Owner
Usage
Owners
1 month each
2
Usage
Rental
Pool
Exchange
System
4 6 8 9 11 12103 5 71

10. Slide 10 15/10/2012
Twelfth price (1/12 of price) + premium for fractional
club membership
Obligation for a specific furniture package
Typically no management company, managed by the
developer
Typically owner usage is up to 4 weeks per share (1
month)
Typically there is no rental pool option
Exchange program
Membership club benefit (Golf club, gym, spa etc)
Limited investment gains:
1. Rental pool system (Revenue - operations cost -
developer share)
Alternative real estate products
Fractional – twelfth share

11. Slide 11 15/10/2012
Unit
Owner Usage
Owners
1 week eachUsage
Exchange System
Time - precious and limited
Sharing - For everyone’s benefit
Timeshare - the purchase of accommodation for:
 a specified amount of time
 in a specified location
 during a specified timeframe
Alternative real estate products
Timeshare

12. Slide 12 15/10/2012
Lower investment entry level (can be as low as
US$20,000 per share)
Use only what is needed (second home is used only 4
- 8 weeks per year)
Higher return for rental pool management
 Lower operational costs
 Lower brand costs (maintenance fee)
 Shorten rental period to fill (if you own 1 month, you only have 4
weeks to rent, if you own 12 month, you have 52 weeks to rent)
Option of exchange system (Vietnam or overseas)
Higher capital gain (if property price increase and if
share price increase)
Club benefits (discount F&B, spa, golf etc)
Fractional vs whole ownership

13. Slide 13 15/10/2012
International
Exchange
Exchange and pointing systems
A
Member deposits
1 week
Weeks
 Fixed
 Floating
 Points

14. Slide 14 15/10/2012
Affordable to a much larger
target market
Access to the international
market
Shortened sales period
Multiple income streams
Vacation Club Benefits
 Upfront sale of rooms (upfront cash)
 Additional F&B and spa spending
 Secured maintenance fee
 Increased marketing
 longer average length of stay
 International marketing and clientele
Room nights sold
Member stays
Alternative real estate products
Benefits

15. Slide 15 15/10/2012
Sales risk
Long term member management obligation
Creation of the membership program and usage
rotation
Points system management
Marketing
Sale training program
Exchange system
Pricing and upgrades
Resale options and membership transfers
Legal framework
Alternative real estate products
Risks

16. Slide 16 15/10/2012
Location: Lamai Beach, Koh Samui, Thailand. 15 mins from
main beach (Chaweng Beach)
Access: 30mins from Samui international airport
Concept: Mediterranean hip, beach club, sexy,
sophisticated, cosmopolitan. A beach club with villas
Sell 2 week shares
Payment terms
 $3,000 reserves unit
 30% down payment registers unit
 60% of net rental income paid to owner
 Financing options available
Annual owner’s dues per 2 week share: $650 - $1,000
depending on unit size
Divided pricing into 3 seasons (peak, high, shoulder)
Case Study: Beach Republic

17. Slide 17 15/10/2012
Case Study: Beach Republic

18. Slide 18 15/10/2012
Case Study: Pine Cliffs Resort, Algarve,
Portugal

19. Slide 19 15/10/2012
Case Study: Laguna Phuket, Thailand

20. Slide 20 15/10/2012
Timesharing and rental pool are actually two very
different concepts
Exchange companies do not manage your resort
Fractional sale companies do not work for 2%
commission
Timesharing will not clear your 90% unsold units
Timesharing will not improve your 80% vacancy
rate
Choose an effective management solution before
choosing an aggressive sale team
Final suggestion: plan carefully before you act
Do’s and don’ts for developers

21. Slide 21
Alternaty is a boutique real estate firm providing specialist advice for hotel, resort
and second home projects. Our approach is to forge partnerships with developers
to provide a suite of consulting services throughout the development lifecycle.
Alternaty
Real Estate
•Vacation ownership
•Fractional
ownership
•Private residence &
destination club
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Boutique
Consulting
•Market research
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projections
•Cash flow modeling
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recommendations
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Operator
Selection
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agreement
negotiations
•Equity investment
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with key money
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negotiation
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agreements
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guaranteed return
Investment
Services
•Joint venture
partners
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special situations
funds
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land for sale
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execution
Investor
Representation
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updates
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for opportunities
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contact
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attendance
•Negotiation support
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•Identification of
target point of
contact
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15/10/2012
Boutique
Consulting
Operator
Selection
Investment
Services
Investor
Representation
Alternative Real
Estate
Alternaty – Alternative Real Estate

22. Slide 22 15/10/2012
Alternative Real Estate Service Co., Ltd.
Unit 23, 26 Ly Tu Trong Street, District 1,
Ho Chi Minh City, Vietnam
T +84 836 028 591
This presentation produced, by Alternative Real Estate Service Co., Ltd. (hereafter
“Alternaty”), is provided for general information purposes only. Whilst making all
reasonable effort to provide correct information, no legal responsibility can be accepted
by Alternaty for any loss or damage arising out of the use of or reliance on the contents of
this presentation.
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23. Slide 23
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