Feature : Timeshare
Brown agrees offering owners options ( especially if they are unique to the brand ) is critical . While the short-term view is gaining acceptance , it ’ s by no means the only template . “ We ’ re still seeing the perpetuity model as a major growth driver for our timeshares ,” says Marriott ’ s Kinney . However , other industry insiders argue that only applies to a very specific segment of the market .
For the majority of operators , term length might not be the deciding factor for today ’ s customization-driven consumer . Buyers want it their way . That may mean others could follow Hilton Grand Vacations ’ lead and introduce a lease system to entice owners .
The same needs carry through at the property level . Don Harrill , CEO , Orange Lake Resorts ( which has an alliance with IHG ), Kissimmee , Florida , says the emphasis on flexibility can be taken for granted in this market . He argues that not just the price , but the product , needs to be more segmented .
Marriott Vacation Club recently topped out its Grand Chateau property in Las Vegas .
Model offers
Just as in the hotel business , eager entrepreneurs aren ’ t waiting for the big brands to debate leisure style versus lifestyle timeshare .
There is a small but growing number of boutique-style vacation rental models that may not have the numbers yet , but clearly are getting visibility with some tastemakers . Over the last few years , players like Oasis Collections , HomeAway and Airbnb have grabbed a lot of buzz . Whether collections of private residences for rent , members ’ clubs or more typical business strategies , they have clearly hit a nerve .
HomeAway reported a 23.6 % revenue increase year over year for 2013 . Guests — especially younger guests who don ’ t yet have the income to be part of timeshare ’ s target market — are falling in love with the flexibility , convenience and “ cool ” of these stays .
The question — at least for timeshare giants like Hilton Grand Vacations , Marriott Vacation Club and Wyndham Vacation Ownership — is whether these disruptors have what it takes to move the needle .
The answer , at least according to Howard Nusbaum , president and CEO of the American Resort Development Association , is that these smaller companies are actually a blessing in disguise for major operators . “ They ’ re too small to steal a march on the bigger players , but they are broadening the market by getting younger travelers into the experience ,” he says .
Ed Kinney , vice president , corporate affairs and communications , Marriott Vacation Club , agrees . “ Anything that helps get people into travel eventually complements our offer ,” he says .
“ While flexibility is the first step in our industry , niche offerings within the context of a larger product scope will be the next ,” Harrill says . “ Alongside our standard product , we offer a higher-end luxury product , the Signature Collection , and are experiencing strong demand for it and expect it to grow .”
Fiona Downing , senior vice president of business development and operations , U . S ., Canada & Caribbean , RCI , Carmel , Indiana , adds guests aren ’ t just looking for more upscale options . “ Consumers are also now looking for wellness and learning aspects when they travel , which we are already beginning to see in vacation ownership products ,” she says .
Nusbaum agrees . “ When I think about where the industry is headed , I see niche offerings — ones based around lifestyle , similar to boutique hotels , or an experiential package — becoming much more popular .”
Green sees a big caveat to this divideand-conquer approach . “ Since ‘ niche ’ means you are pitching to a smaller number of consumers , developers will need to target their marketing very effectively ,” he says .
Map it out At the same time , a broader market puts more pins in the map . Timeless hot spots like Orlando , Florida , don ’ t show any signs of cooling down . Major markets such as New York City , Las Vegas and Hawaii are still attractive , Brown notes . “ But we are also expanding into new markets like Myrtle Beach , South Carolina , and Park City , Utah ,” he says .
On the West Coast , Fredricks says trending regions include Southern California ; Cabo San Lucas , Mexico ; Palm Desert , California ; and the Tahoe area ( Nevada ).
In Europe , Green says Spain and the Canary Islands are hot .
46 HOTELS May 2014 www . hotelsmag . com