TIME is running out for Gold Coast’s multi-million dollar timeshare industry to convince the government it should be exempted from the Future of Financial Advice reform, which it fears could prove devastating.
The new legislation will outlaw the payment of commission for salespeople in financial services, which currently includes timeshare operators.
The reforms are the Federal Government's response to the Parliamentary Joint Committee on Corporations and Financial Services' Inquiry into financial products and services in Australia.
Accommodation operators claim to be unfairly caught up in the reform which is allegedly designed for an unrelated industry. Initiated in the aftermath of the GFC, the changes are aimed at improving trust and transparency in the financial sector and eliminating conflicts of interest.
However timeshare operators in the city told Gold Coast Business News they feel more akin to real estate or travel agents than financial advisors.
The industry has been pushing to be exempted from the reform, but without success more than a year after the reforms were announced. Time is running out should the legislation be voted through parliament, with new laws to come in to effect on July 1.
Australian Timeshare and Holiday Ownership Council general manager Laura Younger, says discussions are continuing with the parliamentary committee, which will host public hearings from January 23 to 24 in Sydney.
The council and timeshare companies have already written to the enquiry. Wyndham Vacation Resorts Asia Pacific chief executive and managing director Barry Robinson outlined the case in his submission.
Some of the largest timeshare companies in the world have significant timeshare operations on the Gold Coast.
Wyndham and the Classic Group are based here, while Accor Vacation Club and RCI have dozens of properties. RCI has 47 Gold Coast properties listed on its website.
There are 78 timeshare resorts in Australia, with an annual occupancy rate of 86.5 per cent, according to a 2011 report from the Australian Timeshare and Holiday Ownership Council.
“With 78 holiday ownership resorts in Australia, (a large number located on the Gold Coast), the industry generates an output of over $1 billion, employs 4603 people, pays them compensation of $304.4 million and adds value to the tune of $486.4 million,” says Robinson.
“The timeshare industry uses commission-based sales of its lifestyle and prepaid holiday accommodation products as the model to compensate its sales staff – just as the real estate industry does for its sales agents selling interests in property.
“The travel/leisure industry similarly pays volume-based commissions to its travel agents making bookings on flights, hotels and holiday packages. It is not any more sensible to ban volume-based commissions for the timeshare industry than it would be for any of these industries.
“Timeshare is a lifestyle product and is not bought as a financial investment. It is currently one of the only growth sectors within the tourism industry and has an 86 per cent national annual occupancy – and over 90 per cent occupancy on the Gold Coast.
“We believe that if the timeshare industry is not exempted from the Bill there could be a substantial and material negative impact on the timeshare industry and tourism in Australia.”
Gold Coast Tourism boss Martin Winter supports timeshare companies’ stance on the reforms and says timeshare is one of the strongest sectors in the city’s tourism industry.
“During the tough period of the global financial crisis, the timeshare industry recorded some outstanding results and was the least impacted of all the sectors,” he says.
“Timeshare held firm in visitation and the best part about timeshare accommodation sector was that it attracts long-stay visitors; that is one of the biggest issues as far as the Gold Coast tourism industry is concerned.”
Figures show last year interstate visitors stayed on average 0.9 days less than they did in the previous year, impacting the overall amount spent in the region.
“Timeshare appears to be resisting this trend, so it is a very important overall experience for visitors to the Gold Coast. It is (also) very important we don’t sit around idly and allow an important sector to get caught up in other people’s problems,” Winter says.
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