ORLANDO, FL—The economy was of course the topic on all attendees minds at the American Resort Development Association’s (ARDA) Convention & Exposition at the Orlando World Center Marriott Hotel & Convention Center here. At the event’s annual State of the Industry session, three of the vacation ownership industry’s top executives reported that while the economic downturn has in certain cases forced internal layoffs, it has also encouraged companies to streamline their business practices to be better positioned when the market begins to turn for the better. Outgoing ARDA chairman and Welk Resorts president Jon Fredricks moderated a discussion panel that included Franz Hanning, president/CEO, Wyndham Vacation Ownership; Donald Harrill, president/CEO, Holiday Inn Club Vacations and Stephen Weisz, president, Marriott Vacation Club International. From the start the panel asserted that while each may be implementing certain operational changes, it must not be at the expense of their owners’ vacation experiences. “From the financial side, this downturn is an opportunity for us to really tear apart and reset our business model, while keeping the focus on giving our customers great vacations. We do not ever want them to be on the short end of the stick,” said Weisz. Hanning reported that although Wyndham Vacation Ownership expects to only do approximately $1.2 billion worth of business as opposed to the $2 billion it did last year, it is still keeping its eyes out for new expansion opportunities. “We’ve had to increase our down payments and shore up our portfolio because once the credit markets come back, loans are going to be much more closely scrutinized and that is a good thing,” he said and added WVO is also concentrating on keeping its employees well informed. “These are times when great companies step up and continue to offer their owners the best experience possible because that is our lifeblood. We also have to do more to keep our employees engaged in these tough times. We are keeping them abreast of our plans and keeping the lines of communication open.” Harrill commented that with consumers reining in their spending and consumer confidence at an all time low, if a timeshare company does not deliver, it is detrimental to the entire company. “You have to pay very close attention to your blocking and tackling to meet everyone’s expectations—the lender, our team members and our customers. We all have to keep our heads up and take a hard look at timeshare’s value proposition for our customers and deliver on our promises,” he said. The three executives all agreed that capitalizing on the fact that a vacation ownership purchase is in many cases an emotional decision is essential and that the industry must revise its sales and marketing strategies to reflect the importance of taking a vacation. “Consumer confidence and our closing figures have a direct correlation and with consumer confidence at an all-time low we are feeling the impact,” said Weiz. “But people still buy a timeshare as an emotional purchase. The challenge for us is to tie the financial justification to that emotional purchase because today everyone is scrutinizing every single purchase they make much more closely.” And while there is no denying times are difficult for all parties involved in vacation ownership, the industry’s high owner satisfaction and occupancy levels continue to work in its favor. “More than ever timeshare’s value proposition is resonating with people. Even if they are pulling back on their spending, it’s clear taking a vacation is still very important to them and we offer a pre-paid vacation at an exceptional value,” Hanning said. “So even if as an industry we aren’t performing as phenomenally as we have been, that fact is why we continue to perform well.
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