October 6: Sterling Holiday Resorts has oversold its existing capacity by more than 1.5 times. The company's 817 apartments in 11 resorts have been reportedly sold to over 75,000 time-sharers.

Result: the country's largest holiday resort operator has been forced to re-design its time-share product to boost revenue without having to promise confirmed accommodation. The company, however, claims that the new concept will give customers more flexibility. The company has also disowned itself from the responsibility of buying back unavailed time-share from its original holder, a promise its sales and marketing personnel were known to be freely making to attract customers.

Under the new system, Happy Vistas Holiday Units, the customer does not purchase a week's accommodation for a fixed number of years at a particular resort. Instead, he is required to purchase holiday units worth Rs 4,000 each. These units, which are valid till 2050, can be traded for accommodation at any of the company's existing resorts.

Unlike the previous arrangement which entitles the customer to confirmed accommodation at least during the week that he owns at a particular resort, the holder of holiday units can get accommodation subject entirely to availability. With growing number of members, unit holders are likely to get frustrated trying to secure accommodation at a time and place of their choice.

The country's largest time-share company is already faced with increasing number of dissatisfied members. Several members have blamed Sterling for having reneged on its promises. Says an irate time-share owner, "when the company sold its time-share to me, I was told that it would buy back the time-share, if I so wished. I approached the company with a request to buy back my time-share, but to no avail." According to a senior official in the company, this is not a problem confined to Sterling alone but ails the time-share industry in general. He said, "selling a time-share involves commissions of up to 2.5 per cent of its total value. Besides, salespersons are under tremendous pressure to perform, which sometimes leads to false promises."

The company is currently marketing its Happy Vistas Holiday Units aggressively. The concept is being promoted as "the most affordable, flexible and exciting family holidays on earth". The company's salespersons say that buying holiday units helps customers to holiday in any place of their choice (a menu of 17 resorts) whenever they wish to and for as many days as they want.

The cheapest accommodation under the new scheme, a studio apartment in the lean season, costs Rs 8,000 per day since two units have to be surrendered for this type of accommodation. The most expensive option, a two bed room apartment in the peak season works out to Rs 24,000 per day. Also, it is the time-share owners owning particular weeks at the resorts who would be given the first preference. Now, if a new member complains that the company has failed to keep its promises in case he is denied accommodation at a place and time of his choice, what excuse would Sterling cook up?

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.