Last month, in our Ask Redweek forum, we posted an article about positive trends in the resale market. For the first half of 2017, resale closings tracked by RedWeek rose 46 percent compared to 2016. As a follow-up to our feature on resales, we’ll now give you a snapshot of industry-wide stats just released by the American Resort Development Association (ARDA), the industry’s trade association and lobbying arm in Washington.
The Recession in Retail Sales is Officially Over
In a strong rebound from the Great Recession of 2008, the US timeshare industry continued to show steady sales growth in 2016, making it the seventh consecutive year of expansion for an industry that is still undergoing major changes, including mergers and consolidations, while adapting to new competitors who are using alternative business models to lure timeshare travelers to their programs.
In a report released June 29, ARDA said that sales volume increased 7 percent in 2016 while rental revenues rose 5 percent. Overall sales increased from $8.6 billion in 2015 to $9.2 billion in 2016. Rental income rose from $1.8 billion in 2015 to $1.9 billion last year. Average timeshare occupancy was 79 percent, which compares very favorably to a 65.5 percent heads-in-beds rate for hotels.
“Seven straight years of growth is a testament to the strength of the vacation product we offer,” said Howard Nusbaum, ARDA’s president and CEO. “Timeshare offers more space and privacy, tremendous use-value over time, and over 5,300 resorts worldwide to choose from.”
According to ARDA’s resort-count, there were 1,558 US timeshare resorts in 2016 (for 206,080 units). A whopping 70 percent of those units offered two bedrooms. The average unit size, moreover, exceeded 1,000 square feet. Florida continues to have the most timeshares, by a lot, while beach resorts command the most popularity. Inland resorts, such as Colorado, still claim the highest occupancy rates.
ARDA’s survey of member companies also showed how timeshare and other hospitality companies are adapting to the explosion of new technologies to serve customers. At least 35 percent of all resorts now offer mobile applications (primarily cell phone) to owners for reservations, check-ins, concierge services and onsite communications.
Time for Everyone, Owners and Resorts, to Adopt Tech Solutions
The rush to go-mobile and embrace high-tech communications is no accident. All brand-name timeshare companies are adopting customer-friendly tech programs as fast as possible — not only to assist customers, but to offset competition from start-up travel clubs and reservation companies that offer products never envisioned by the old-school timeshare companies. Fast-growing travel agencies such as VRBO, AirBnB and others are the vanguard of a new travel industry that seeks to offer more travel options, more adventures, more cruises, instant reservations and, most importantly, more treasured experiences for consumers. That latter idea, special experiences, used to be the preferred domain of timeshare operators at sales presentations. No longer.
At recent industry conferences, CEO’s of the biggest brand-name timeshare developer companies debated the impact of these new players in travel. The newbies include those who offer one-night-at-a-time, sleep-on-a-couch-in-Manhattan stays to entities that offer extended travel excursions to Europe, Africa and China. But there was no agreement among the majors on how to adapt timeshare-in-perpetuity models to millennium-aged travelers who reject long-term commitments and seek shorter, immediate reservations.
One thing all execs conceded, readily. They are hiring millennial-aged marketers (ages 25-40, roughly) as fast as possible to catch up with a travel generation that appears, already, to be way beyond the traditional lifetime contract timeshare era. They are also refocusing sales presentations on the benefits of vacation experiences, rather than vacation cost-savings, to appeal to the potential next generation of timeshare buyers. They are also confident, perhaps as a wish fulfillment, that millennial travelers will eventually switch to timeshares when their lifestyles dictate that a two-bedroom, two-bath, full kitchen condo is much better than a one-bedroom hotel studio for four.
ARDA’s PR and marketing teams recognized this probable shift a couple years ago. That’s when they started promoting industry-wide statistics which showed that timeshare owners have more sex on vacations than “regular” travelers who stay in hotels. Tough if not impossible to argue with that.