Feature : Timeshare
Recessionary lessons learned about the upside of timeshare and fractional ownership are rewriting brands ’ development plans and energizing this complementary revenue stream .
by ORIana LERnER , cOnTRIbuTIng EdITOR
Starwood Vacation Ownership , operator of
19 shared ownership properties including the Westin St . John Resort & Villas , recently renewed its master affiliation with
Interval International .
If there were any doubts about just how much timeshare is moving into the hospitality industry ’ s limelight , the March 3 appointment of Geoff Ballotti as Wyndham Hotel Group ’ s president and CEO laid them to rest . Yes , the former president of Starwood Hotels & Resorts ’ North America division brought hotel brand experience , but aggressive growth in what was already the industry ’ s leading timeshare exchange / vacation rental division under his leadership ( to 107,000 properties in more than 100 countries ) perfected his resume . His proven ability “ to leverage synergies among diverse hospitality segments ” is a big part of what put Ballotti in the corner office of the world ’ s biggest hotel company , according to Stephen Holmes , Wyndham Worldwide ’ s chairman and CEO . It is also making timeshare one hot topic in the hotel industry .
It sounds like a daydream — a US $ 6.9 billion industry , according to the American Resort Development Association ( ARDA ) International Foundation ’ s 2013 “ State of the Vacation Timeshare Industry : United States Study ,” with only 7 % to 10 % penetration in most markets , a broadening target market and great occupancy .
“ The golden age of timeshare is still ahead ,” says Howard Nusbaum , president and CEO of ARDA , Washington , D . C . “ This was the ‘ little engine that could ’ until 2008 . Then we couldn ’ t get financing , so we pulled back in 2009 from a US $ 11 billion industry to US $ 6 billion .”
Timeshare operators spent the rest of the recession shifting perspectives from volume to higher margins — tracking down clients with good credit who could put make a bigger-than-average down payment . That kept the industry going , and at the end of the recession , timeshare was the icebreaker for the credit markets , according to Nusbaum .
“ As an asset class , timeshare loans in securitizations performed better during the recession in delinquency and default percentages than other asset classes , including student loans , creditcard loans and home mortgages ,” says Jon Fredricks , president , Welk Resorts , Escondido , California , which has a collection of timeshares and vacation rentals predominantly on the U . S . West Coast . Now operators are parlaying that strength to reach past the low-hanging fruit of existing brand customers and cast a broader net for projects and buyers .
Who ’ s buying ? Operators who want to grab their piece of the pie need to be quick-thinking , creative and able to connect the view on the ground and the view from the top . Timeshare owners are more diverse now than ever , and each bracket — broken out by location , lifestyle or demographic — has its own set of expectations .
The average timeshare owner might
www . hotelsmag . com May 2014 HOTELS 43