There continues to be a great story to tell about vacation ownership. That much was clear when Interval International hosted the 19th edition of its Shared Ownership Investment Conference last month. With our Special Tourism Edition quickly approaching, The STAR Businessweek couldn’t miss an opportunity to hear some of the biggest names in the tourism industry!
The US timeshare market has recorded its seventh consecutive year of growth, with Hawaii’s timeshare industry adding US$5.3 billion to the economy. Global shared vacation ownership occupancy was 76 % in 2014 and up to 79 % in 2015. Internationally 91 properties were to be added to the mix in 2017, making available 7,300 units to the shared vacation ownership industry.
At the heart of all things timeshare is Interval International, a global vacation exchange network that has been doing business in the Caribbean and around the world since 1976. Presently Interval’s network consists of approximately two million member-families around the world, 3,000 affiliated resorts in 80-plus countries and consumers who, on average, own almost two weeks of vacation time.
At this year’s Shared Ownership and Investment Conference, Interval representatives painted a clearer picture of their members, and their overall contribution to the tourism industry.
“Our members are travelling for leisure, around 23 nights per year . . . these are affluent consumers who are in the top 20-plus per cent of households,” said Neil Kolton, Interval’s Director of Caribbean and Florida Resort Sales. “They really value travel, and they travel a lot. The demographic of our members is at the top level of the industry today.”
Interval works as a go-between for timeshare owner and resort developer, serving developers in the capacity of partner, helping in every stage of the business development process including programme design, digital sales and marketing, as well as financial services and reservations. As part of their membership benefits, Interval members can convert or trade their timeshare weeks or points to offset the cost of booking a hotel almost anywhere in the world.
During an interview with media as part of this year’s conference, Kolton said timeshares continued to grow in popularity as consumers continued to demand more for their buck – timeshares give buyers the ability to purchase future vacations in quality accommodations without the commitment and expense of a second home.
Timeshares have made notable strides throughout the years but the industry is not without its challenges. In July this year a four-year sentence was given to a lawyer for involvement in a fraudulent timeshare scheme that cost resorts hundreds of thousands of dollars and resulted in several would-be customers becoming victims of identity theft. Ken McKelvey, American Resort Development Association Resort Owners’ Coalition (ARDA-ROC) Chairman, applauded the verdict saying it sent a strong message to criminals that fraud and deceptive activities would not be tolerated by the industry.
The industry had also come up against fierce competition from services, including Airbnb, which offer travellers alternatives to traditional hotel accommodation. Kolton had words of counsel for vacation rental marketplaces like Airbnb and Homeaway: “Don’t be afraid of regulations, embrace it. It will make you stronger and better. It did it for us.”
He highlighted some of the strengths of the timeshare industry as compared to competitors. Frequent health and safety inspections, cyber security, top of the line sales and operational processes, and key control were some of the pluses that set the timeshare industry apart, according to Kolton. “Airbnb doesn’t have any of those things. Bring on the competition,” he challenged,
Kolton and other key stakeholders at the conference expressed concerns about the cost of travel to the region which they felt needed to be addressed, while other international markets continued to grow and competition intensified. This was timely, particularly in light of the effects of recent hurricanes: the region saw a decline in visitor arrivals after super storms ripped through several Caribbean islands. A campaign has since been put in place to send an amplified message throughout the world that the Caribbean is, in fact, open for business.
Also up for discussion was the Citizenship by Investment Programme (CIP). When asked whether he felt programmes like the CIP had a positive or negative impact on the timeshare industry, Kolton shared, “It has opened some new affiliation opportunities for Interval because some of these resorts do have a Citizenship by Investment component, whether they’re selling home ownership, real estate or fractional ownership. We’re also looking at exchange opportunities because the developers like the opportunity to affiliate that product with an exchange company like Interval. In some of these foreign jurisdictions, having the validation of quality and an affiliation with a luxury, globally-recognized hospitality brand, that is very beneficial to them in their sales efforts.”
During the ‘Market Watch: Latin America and the Caribbean’ session, comparisons were made between annual occupancies for timeshare resorts in the Caribbean versus traditional hotels, with the latter often notably higher. The range was typically 15-20 percent higher, frequently due to larger travel parties. The consensus of the panel was that timeshares are beneficial to properties due to their strong occupancy rates. In the Caribbean this was demonstrated in markets like Aruba where timeshares have been on the upswing. Leading destinations in that regard tended to be those with diversified tourism economies, with offerings that ranged from all-inclusive to timeshare and second home residential-type products. Creative membership programmes in all-inclusive resorts that were not necessarily classified as timeshares had also been gaining popularity and generating a significant number of sales.
Still in the Caribbean perspective, Kolton made reference to Bay Gardens Beach Resort in Saint Lucia whose Managing Director, Sanovnik Destang, attended the conference this year.
“They’ve done a really nice job with their all-inclusive programme in Saint Lucia. It’s actually a traditional European Plan (EP) hotel, part of the vacation ownership programme, but they’ve seen a lot of growth in all-inclusive since they launched the all-inclusive plan as well. They’ve partnered with several local businesses and restaurants so part of their whole all-inclusive programme is that the consumers are actually able to dine at a selection of local restaurants.” (Read our full interview with the Bay Gardens Resorts CEO on page 6).
His point solidified initial observations that creativity always won in the hospitality industry. Kolton felt there was room for properties in general to collaborate even further when it came to local excursions, activities and dining options at other establishments. One thing was certain: all-inclusive hotels and resorts were gaining popularity in the timeshare market.
“I think both timeshare and all-inclusive vacationing are sectors that are continuing to grow,” he concluded.
This year’s conference presented timeshare owners, and others interested in getting into the industry, with the opportunity to learn about the market from others with years of experience. In one of the final sessions, dubbed ‘View From the Top’, David Siegel, President and CEO of West Gate Las Vegas Resort & Casino, spoke about the transition to timeshare and advised hoteliers, hoping to convert their properties, to be sensitive to the historical aspects of properties and long-time staff. Other areas that needed to be considered prior to making the decision included acquisition cost versus starting off on a new plot of land. Also on the panel during that discussion were Mike Flaskey, CEO, Diamond Resorts International, Tom Nelson, President and CEO, Holiday Inn Club Vacations and Orange Lake Resorts, and Andy Stuart, President and CEO, Norwegian Cruise Lines.
This year’s Shared Ownership Investment Conference shed a new light on a segment of the travel industry that has seen numerous scandals and repetitional damage over the years. While the future of timeshare seems strong, the one certainty is that it’s too soon to count them out!