Business Idea: Time Share for the global traveler


Time share is a powerful idea whenever expensive resources can not be fully utilised by a single owner. Travel and holiday accommodation falls squarely into that category, which explains the popularity of time-share accomodation arragements. There are other methods for sure, like leasing, renting, swapping, etc. but they result in expensive and/or inflexibe transactions.
There are literally many thousands of time share networks, all aimed at holiday makers: tourists looking for relaxation, luxury, adventure. I’m yet to find find one that aims to provide flexible accomodation for a number of markets that while travelling want to be in the real world:
-Organisations that often sending staff to certain cities or hosting overseas collegues, such as universities needing accomodation for visiting professors, or sending students to other universities for studies.
-to the travel enthusiast with some disposable income, wanting to travel extensively, to live in real places, experience other cultures (therefore living with other locals), immersed into the local culture, at economical price.
-to people who often need to live in different places for a time: for a length of a contract or for the duration of a training course, or to teach english as second language in a foreign country, say.

To anyone interested, I’d like to propose web-based company (Time2Travel?) marketed at these people and organisations. The company would be membership-based, with costs and benefits of being a member.

Initial cost: Members (the travellers) would join with an investment of a size they can afford. This gives them equity in the real estate owned by the company and a number of points to be spent on accomodation in proprties owned by the company. This equity can be withdrawn at any stage, the value of which will be affected by the capital gain or loss of the housing stock.

Ongoing Cost/Profit: Depending on other income streams derived from the properties on one hand (see short term rental agencies below) and the cost of upkeep of property, the company might produce a ROI (return on investment), or there might be some ongoing maintenance fees, both proportionate with the member’s initial investment.

Company activities:

Using traveller’s invested money, the company would aquire quality, low maintenance housing (probably apartments) all around the world in areas (usually larger cities) that satisfy the following requirements:
1) Attractive to short term rental market-maybe already in a complex of short term rental apartment apartments
2) Are in interesting historic or cultural settings or smaller town in regions with outstanding natural features or smaller towns that are well placed to be a base to explore surrounding attractions
3) The areas they are in are well serviced by mass transport (airports, trains) for ease of access from around the world
4) Purchased in times and places when depressed local makets or undervalued local currencies ensure members are buying good value.

These apartments would be available for:
1) Members to book using a web interface for periods of 1 week to 1 year, say. Each apartment would cost a certain amount of points, depending on the purchase cost of the property and the maintenance costs. Different seasons could also affect the number of points used. Not everyone can travel regularly, so point can be saved up and freely traded between members, or even sold by members to non-members (the actions of non-members to be guaranteed by seller of points). If a member wants to stay for longer than their points allow, the company could sell points to that member.
2) Local agencies specialising in short term rental accomodation. This ensures higher efficiency in that, for the times the properties are not used by members, they would be actively marketed using other channels and much more profitable rates. This would either largely offset the costs of upkeep of the properties, or even exceed it, providing a return on investment for the member. The same agencies can provide cleaning services (if member’s don’t wish to clean the properties at the end of their stay) and any maintenance and repairs that might be necessary.

As can be seen, the company would be two things in one.
Firstly, by the unique business model, it is to provide “meaningful accomodation” to those two markets wanting to travel extensively at economical prices. “Meaningful” means a number of things:
-like slow food movement, this website would foster “slow travel”. To the time-rich, the length of stay made possible by the inherent economy in this model will enable meaningful experiences we normally don’t have time for.
-forums and blogs on the website would ensure that participants share tips, experiences about each of the regions and properties, adding a social dimension to their experiences as well. Encouraging to get in touch with locals using other networks such as couchsurfing for shared meals or other experiences.

Secondly, it is an investment vehicle. The company could aim for negative, neutral or positive cashflow. For instance, aiming for short term rental agencies letting the properties for about 6 weeks per year would pay for the upkeep of the housing stock for the whole year and the costs of running the company. This would be the cash neutral setting-no ongoing fees for members, and when eventually leaving the company, they would receive their initial investment plus their share of the capital gains made on top of that (probably tax-free). Positive setting is giving preference to the short term rentals-this might reduce the availability of housing to members, but would increase the chance and size of return on their investment. Negative setting is giving more preference to members-this would mean ongoing yearly fees, but better availability of properties. Market research could determine what position the company should take.
The company cold also sell the business model developed-the web site, the contracts, the market research and intelligence. Other websites (completely other entities purchasing the business model, or the same company branching into other markets) can apply the idea and mechanism of brokering expensive and under-utilised resources, such as motorhomes, yachts, ?

Purchasing real estate by the company would be guided by the popularity of existing stock, member’s wishes and prevailing market conditions (taking advantage of currency fluctuations, interest rates and market conditions). Often the most interesting locations to live for a few months in the world are in places where real estate is relatively inexpensive, but rental or tourist accomodation is pricey.

A real world example:

An apartment in Budapest, Hungary:
A city of great culture and interesting history, Budapest will keep anyone riveted for a number of weeks. Currently, if renting short term apartment in the city centre, expect to pay EU 110 per night (personal experience), but because of a depressed economy and weak local currency, a similar apartment can be purchased for EU 70,000. If the company had just this one property and 10 families investing EU 7,000 each, and the apartment was rented by short term rent agency for 1 month (paying for all incidentals), and is empty for another 1 month, the members would gain each year a month’s accomodation in a beautiful city for life. If lifestyle changes 10 years later mean the member no longer wishes to use the apartment, the equity share is returned (probably worth EU10,000 then).

Of course, not many would want to holiday in Hungary every year, and this is why time share is such a powerful idea. More research is needed, but I imagine the business cases for apartments in many exciting countries of North and South America, Morocco, South East Asia, Eastern Europe would be similar. So, if the company had 100 members and 10 properties of similar value, each member would have a choice of 10 locations to holiday in for a month at a time forever-for the investment of just EU 7,000

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