EU Timeshare Directive, One Year On: How Have We Done? | RCI ...

Chris Bannister, commercial partner at Gregory Rowcliffe Milners, is no stranger to the timeshare industry. Last year Bannister joined us on a special edition of the Today's Timeshare radio show to discuss the imminent introduction of the EU Timeshare Directive. Today marks the Directive's anniversary, and Bannister gives his verdict on the industry's progress.

Chris Bannister

One year on from the coming into force of the new EU Timeshare Directive, it might be said that the shared ownership world is little different from what it was before.

The new Directive was heralded by many (both in the industry and outside) as a welcome response to some of the big issues that have beset the timeshare industry for so long ? but there were also many who were suspicious and somewhat fearful of the impact that it might have, not least in the 'fractional' sector, which seemed keen to avoid potentially burdensome regulation that might discourage new entrants at such an early stage.

However, in my experience at GRM at least, since its implementation the Directive seems to have been welcomed not only by the mainstream timeshare sector but also by those developing and selling ?fractional? products, who seem to appreciate the legal structure and contractual certainty that the new Directive provides and the reassurance that this gives to their customers and potential customers.

All seem to have embraced the new pre-contractual information? and other requirements without much complaint and even the minimum 14 calendar day cooling off period and the strict ban on deposits seem to have been accepted.

A number of EU Member States (as always) missed the prescribed deadline for implementation of the Directive (23rd February 2011) and the European Commission has had to take legal action against some Member States to force them to take the necessary transposition measures.

And of course implementation of the Directive is one thing, and effective enforcement of it is quite another.

Time will tell how effective it will be in practice, but it would certainly be fair to say that the new Directive has been welcomed rather more warmly than its predecessor and it will be interesting to see how well the EU Commission considers that the Directive has been implemented (in terms of overall quality and completeness) when it carries out its assessment once it has confirmation from all Member States that their transposition laws are in place.

Clearly, the challenging economic conditions that have prevailed across the EU since its coming into force have made it difficult to assess the real impact of the new Directive.

Lack of consumer confidence and difficulties with obtaining credit have no doubt curtailed sales of timeshare and fractional products much more so than any legislative or regulatory hurdles.

However, the seeds of recovery and growth are starting to germinate and solid growth in other markets, including in the US as well as in emerging markets in Asia and elsewhere, appear to indicate that the good times will return and that timeshare and fractional could emerge as much more mainstream leisure products in Europe once this happens.

Certainly, the new legal regime in place across Europe following full implementation of the Directive should not be any impediment to successful sales and it should provide a firm base for future growth of both traditional timeshare and fractional products, which still have very low penetration across the leisure market as a whole and huge scope for growth.

Of course, there are other problems that the Directive cannot solve and which need to be fixed quickly if the industry is to thrive.

First and foremost, there are many timeshare owners out there who do not use and often no longer want their timeshares any more, but who feel trapped by escalating maintenance fees and the lack of effective exit routes.

Many are even prepared to give their timeshare interests away for nothing in return for release from maintenance fee liabilities, but are not permitted to do so under the terms of their contracts.

And there is a whole new generation of potential customers for whom the traditional timeshare product is of little interest, but who could quickly be attracted to alternative (and innovative) products that speak to them.

With adversity always comes opportunity and I firmly believe that there is now a solid legal base for the investment and innovation that is needed to regenerate the product and the industry across Europe.? And now would be a very good time to start doing it!

Gregory Rowcliffe Milners (GRM) is a leading full-service legal practice based in the heart of London, with a history going back over 200 years and strong international links. Bannister leads the company's Travel & Leisure Group, which provides a full range of legal services to clients in the travel, hospitality, timeshare and fractional ownership sectors. You can contact your author at c.bannister@grm.co.uk.

Source: http://www.rciventures.com/2012/02/eu-directive-one-year-on/

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