I own a timeshare and usually send a few dollars each year to support the ARDA-ROC Resort Owners Coalition, but I don't really know what they do. I also have heard about a similar-sounding organization called the TBMA. Can you tell me about these organizations and what they do for timeshare owners?
ARDA serves timeshare developers. TBMA serves owners who become board members at their resorts.
RedWeek just attended the ARDA (the American Resort Development Association) annual convention in Las Vegas, where more than 2,000 timeshare industry executives gathered to celebrate the continued economic growth of timeshare sales. They also came to learn about new initiatives that ARDA, the industry's trade association and lobbying group, is pursuing to address practical issues that impact all timeshare companies and, in turn, timeshare owners.
RedWeek also attended TBMA (Timeshare Board Members Association) May meeting in Orlando where 150 association board members and resort managers immersed themselves in the myriad challenges that confront legacy resorts across the country (legacy = older, independent resorts typically run by an HOA board made up of the owners themselves). The ARDA meeting was a typical national industry conference, with educational sessions, well-known guest speakers, networking events, and panels with CEOs of the biggest brand-name companies in timeshare.
The TBMA conference featured a dozen drill-down educational seminars on the operational issues that impact older resorts: from disaster insurance to title searches and delinquencies, collections and maintenance fees, strategic planning, reserve studies, owner privacy, rentals, and resales. Here's a snapshot of both conferences.
Howard Nusbaum, CEO and chairman of the Washington, DC-based ARDA, spoke eloquently at both conferences, offering two themes that should resonate with owners. First, he urged developers and HOA boards to actively "take back the narrative" to help reshape the habitually tarnished image of timeshare. With the developer industry riding its 8th straight year of sales growth since the great recession of 2008, Nusbaum said all segments of timeshare need to work together to overcome the negative baggage — such as overzealous sales practices — that has dogged the industry's reputation for decades. A critical part of that effort, he said, is rebutting false myths about timeshare while also developing new programs that will appeal to younger travelers who, so far, have been somewhat allergic to perpetual timeshare contracts.
At the TBMA conference, where reputational issues present ongoing problems for resales and rentals, Nusbaum effectively said, "we're all in this together." TBMA members responded very enthusiastically to Nusbaum's unification message because, on an individual level, legacy resorts don't have the resources or expertise to mount public relations campaigns to promote the benefits of timeshare ownership. That is ARDA's job, and Nusbaum vowed, at both conferences, to lead the effort on behalf of owners and developers.
ARDA focuses on timeshare legislation, transfer scams, tax issues
- In addition to dealing with big-picture ideas, such as the ongoing consolidation within the industry, ARDA's primary mission includes lobbying for legislation, at the federal and state level, that benefits the industry's ability to sell timeshares in an extremely competitive travel market. That competition is coming from unknown startups to already famous disruptors like Airbnb and online travel agencies (OTAs) that are nimble and offer new vacation experiences never imagined by the founding fathers of family timeshare. These competitors also offer instant online reservations, which is a stark contrast to a timeshare model where owners usually must call 12 months in advance to secure a reservation — if there is availability.
- A second major ARDA initiative is supporting the crackdown on transfer-and-relief companies that solicit large upfront fees from owners to help them cancel lifetime contracts. While individual timeshare companies have launched lawsuits against specific exit companies (and their attorneys), ARDA's lobbyists support legislation to outlaw and penalize companies that scam owners and, in the process, interfere with developer-owner contracts. The problem posed by self-styled "exit companies" has plagued ARDA developers for a decade and, in fact, shows no signs of abating. Some exit companies spend more money advertising, on the Internet, radio and other platforms, than the industry spends promoting the positives of timeshare ownership.
- ARDA also monitors — and aggressively opposes, when necessary — tax-hike proposals in the US and abroad where lawmakers seek to impose arbitrary per-night taxes on timeshare owners. These types of tax schemes are popular in tourism-dependent states (Hawaii) or offshore jurisdictions (the US Virgin Islands) where individual timeshare owners have no direct representation in the local governing bodies. In the Virgin Islands, for example, ARDA's Resort Owners Coalition (ARDA-ROC) is suing the government to overturn a $25 per night "environmental impact fee" on timeshare occupancy. For a one-week interval, that's a $175 new tax on timeshare owners for a jurisdiction that is trying to offset chronic budget shortfalls by taxing timeshares.
Nusbaum and several CEOs at ARDA also pledged to continue investigating ways to bolster a secondary resale market so that longtime owners, one way or another, can find a dignified path to sell or divest themselves of their timeshares after many years of loyal usage. Surprisingly, at one ARDA "timeshare relief" panel, none of the presenters talked about two potentially ground-breaking programs that individual companies (Wyndham and Diamond) are already providing for owners who want out of their timeshare. Two of the three presenters, moreover, were high-ranking executives from Wyndham and Diamond. Nusbaum also announced, prior to the conference, that ARDA had formed (or is forming) a task force on secondary market issues (resales, exits and regulatory issues), but not much further detail.
TBMA is all business, no frills, for HOA board members
The Timeshare Board Members Association is a non-profit, non-partisan educational association founded by Shep Altshuler, publisher of TimeSharing Today magazine. While ARDA attendees hung out in the glitzy halls of Caesar's Palace in Vegas, TBMA members held court in a serviceable but unremarkable Doubletree Hilton near SeaWorld. Altshuler is a widely recognized expert on timeshare who has focused on owner issues for three decades. The TBMA reflects his personality and priorities — it's a no-frills forum designed to help legacy timeshare boards develop strategies to sustain their resorts or, in the most severe cases, terminate their timeshare plans and sell their property to the highest bidder.
The conference featured meet-and-greet sessions where owners and resort managers shared their stories --- their need for rentals, resales, and handling soaring delinquencies from owners who are aging out of their timeshare vacations --- as well as presentations from companies that provide legal, financial, and management services to legacy resorts. In two days of back-to-back-to-back seminar sessions, the TBMA crammed a month's work of meaningful material for timeshare board members.
TBMA's twice-a-year conferences address a set of day-to-day needs for homeowner associations that ARDA acknowledges but does not act upon: how to set priorities to plan for the future of a resort; creating a rainy day reserve fund to cover renovations and (worst case) a disaster; gradually increasing maintenance fees to sustain a resort over five or 10 years; hiring a professional management company to run a resort; dealing with delinquencies; launching robust rental and resale programs; communicating effectively with owners; creating a succession plan for the board; working with exchange companies to offload HOA inventory; and, finally, working with the industry (i.e., ARDA) to address owner issues that are too big for any one resort to tackle.
Millennials are the Holy Grail for timeshare — for legacies and developers
Here's a huge example of one of the "too big" issues that confront TBMA and ARDA, equally: attracting younger travelers, frequently called millennials, into the timeshare universe.
Scott McGregor, a 30-year industry veteran, ARDA participant, and current president of US Operations for the American Resort Coalition (which manages and redevelops legacy resorts), offered this insight into the up-and-coming generation of future timeshare buyers (maybe) at the TBMA conference.
To attract millennials, he said, timeshare and other travel companies are creating new products that include right-to-use, travel club-type memberships with limited terms. Buyers typically pay one-time membership fees of approximately $5,000. When members travel, they pay a nominal annual fee, then pay for all vacations or cruises at steeply discounted rates. No long-term contracts; no maintenance fees; no exit issues (or transfer and relief companies).
Companies will increasingly rely on new advances in technology to interact with customers and tailor travel experiences to individual preferences. Big brand hotel companies are already doing this and creating new brands to cater to different demographic segments of the traveling public. Legacy resorts, McGregor said, also need to adopt these emerging technologies to stay relevant with their customers and compete with online travel agencies that offer instant reservations. The smartphone, he added, is the #1 tech tool for all connections with customers.
According to McGregor's research, 87% of millennials — born between 1980 and 2000 — use social media (primarily Google) to plan their travel, while 85% check multiple online sites before making travel decisions. More than 46% book travel through their smartphone or tablet. A bad online or mobile experience, he added is a fatal flaw for millennials. Even more astounding — at least for older pre-Internet travelers — is that 97% of millennials post comments about their travel experience, good or bad, on social media. These are the kinds of comments that make or break a resort's reputation, McGregor said. Ignore them at your peril.
In addition to favoring online tools to make travel decisions, 49% of millennials take last-minute vacations — which means they would be susceptible to last-minute deals from legacy resorts.
There is one area where millennials do not seem to differ much from their timeshare-owning parents (which includes 10 million US households). According to McGregor, more than 68% of millennials will stay loyal to a program that offers the most incentives and rewards, including freebies, upgrades and discounts. Sound familiar? It's the essence of a timeshare pitch and helps explain why more than 50% of all new timeshare sales go to existing owners. Loyalty and incentives matter, along with great wi-fi reception.
Nusbaum, ARDA's CEO, voiced similar sentiments at both industry conferences: when millennials get married, buy houses and start having kids, he said, they'll seek out the kind of vacations that timeshare companies have sold, and keep selling, for decades. That's two bedrooms, two baths, full kitchens, activities for the kids, and private time for the parents.
Full Disclosure: RedWeek is a longtime member of ARDA and a continuing sponsor of TBMA conferences. RedWeek representatives regularly attend and, on occasion, participate as panelists at ARDA and TBMA conferences. The author of this Ask RedWeek, Jeff Weir, was a panelist on the "Adapting to Change" panel, along with McGregor, at the TBMA in Orlando.
