The vacation ownership industry is, in many ways, aligned with the hospitality business. Both face similar challenges as far as the evolving consumer travel preferences and both also embrace some of the same trends. But one of the greatest differences between the two is perhaps how each views the home rental business, specifically Airbnb.
According to MMGY Global’s 2017-2018 study Portrait of American Travelers, 17 percent of affluent travelers have stayed in a condo resort at some point during the last two years, whereas 28 percent have stayed in a vacation rental. Over the course of the next two years, 23 percent want to stay in a condo resort, compared with 35 percent who want to stay in a vacation rental.
While addressing attendees at the 19th annual International Shared Ownership Investment Conference, which took place in Miami last month, Steve Cohen, vice president research and insights at MMGY Global, said that although the number of affluent travelers who have stayed in a timeshare is growing, most are still not aware of what a timeshare has to offer.
But Howard Nusbaum, president and CEO of the American Resort Development Association (ARDA), is undaunted. In fact, he doesn’t view Airbnb as a competitor to the vacation ownership industry, but rather a potential distribution channel. “A lot of people see Airbnb as an industry disruptor because they’re not yet regulated and don’t pay taxes,” he said. “But that will get figured out. There’s not a government out there that doesn’t know how to tax.”
While he admitted that the platform could be more of a competitor once it’s regulated, he also added that listing timeshare weeks on Airbnb could be another means of monetizing them. Already a member of ARDA, Expedia’s vacation rental company Homeaway has recognized the simpatico relationship between their business and the vacation ownership industry, allowing timeshare resorts to sell rental inventory on the site.
Yet like the hotel industry, timeshare is also answering the consumer call of experiential travel. For example, Bluegreen Vacations Corp. considers guest service to be a major part of the experience. So when the company rewrote its mission statement a few years ago, it evolved its brand promise to “Shared Happiness” in order to communicate to staff their role in the guest experience. “Our guests take 1.5 to two vacations a year for which they save up their time and money and bring their family together to entrust their vacation to us,” explained Peter Menges, senior vice president. “If we don’t deliver a great vacation experience, we fail because it will be at least six more months before we can try again to fulfill that promise. This is a serious, simple commitment to a mantra that allows everyone to understand that they’re responsible in some way, shape or form to deliver on that experience.”
At the Travelers Club Division of all-inclusive Karisma Hotels & Resorts, delivering one-of-a-kind guest experiences is closely tied to the company’s global partnerships with Jimmy Buffet’s Margaritaville brand as well as the Nickelodeon brand. Karisma’s SVP Rinaldo Fernandez said that leveraging these brands allows the company to offer a unique, family-focused vacation that also serves as a point of differentiation for the resort group. “We’re focused on these partnerships because of their huge brand recognition and brand equity,” he said.
Diamond Resorts International stepped up its experiential offerings earlier this year when the company announced country music star Cole Swindell as a new brand ambassador, providing Diamond Resorts’ owners with premium seating and exclusive meet-and-greet experiences at Swindell’s concerts across North America this year. Mike Flaskey, the resort company’s CEO, explained that since moving to a more experiential model in 2013, guests are coming to Diamond Resorts to “create memories that money can’t buy and the model has worked well for us.” Westgate Resorts’ President and CEO David Siegel also told conference participants that his company is increasing its experiential offerings for owners with new additions such as on-site water parks and miniature golf.
The timeshare industry is also embracing technology. As with hotels, WiFi connectivity is a key concern for timeshare owners. According to Siegel, a recent survey of its members showed that their number one expectation at a resort is WiFi. Nelson attested that his companies’ owners expect to stay connected throughout the duration of their trip; they don’t simply use the Internet to plan and reserve their trip and disconnect upon arrival. However, technology has also become an inherent aspect of the timeshare sales process as in the Marriott Vacations Club sales center in South Beach where prospective owners can scroll through an iPad to access testimonials and images of properties within the portfolio. The Sunset Group also incorporates a variety of software programs and different CRMs into its marketing campaigns as CEO Orlando Arroyo noted that the company’s relationship with owners exists primarily online.
Resort operators also agree that there’s value in working with vacation exchange clubs like Interval International. The company’s network includes globally renowned brands like Marriott Vacations Worldwide, Hyatt Vacation Club, Westin Vacation and Preferred Residences, which allow their members to exchange points—increasingly purchased by vacation owners in lieu of the more traditional sale of ‘timeshare weeks’—that can be used to buy hotel and resort stays as well as other types of vacation products such as cruises.
But independent timeshare resort operators also acknowledge that a relationship with Interval or similar exchange networks can be inherent to building its membership base and driving revenues. King’s Creek Plantation in Williamsburg, VA began working with Interval in 2011 and within three years of rolling out the program, the property converted 30 percent of its ownership base to points programs. Meanwhile, Christie Lodge Owners Association leveraged its location near Denver and it relationship with Interval to bring area consumers on-site for property visits while also offering a week backed by points that can be used for international travel. “Interval has helped us brand ourselves, bring in new owners and upgrade our owners to their gold program,” noted Lisa Siegert-Free, the association’s managing director and general manager.
However, David Siegel, president and CEO of Westgate Resorts, pointed out that many developers will try their hand at timeshare without sufficient capital or a complete understanding of expenditures that they will need to cover. Often, they lack an adequate lender network when their get into the business. Timeshare also remains a marketing-centric business, which is a side of the business where, Mike Flaskey, CEO of Diamond Resort International, said “the road is littered with independent developers who haven’t made it.”