HB ON THE SCENE: Vacation Ownership Investment Conference Touts Industry’s Resilience

ORLANDO, FL— The 8th annual Vacation Ownership Investment Conference got started today here at The Peabody hotel. More than 600 attendees spent the first day listening to a broad assortment of industry experts speak on topics such as finance, forecasting and construction costs. Howard Nusbaum, president/CEO, the American Resort Development Association (ARDA), got things startedby parising the industry, citing its proven resilience through recession and world events, particularly 9/11. “We’ve been saying for years that timeshare is coming of age and now the industry is being noticed by financial media. We’re really in a sweet spot right now with the Baby Boomers turning 60 and having more leisure time and being more affluent. They want to travel,” he said, pointing out that the number of singles purchasing timeshare is has also been steadily increasing. Also contributing to timeshare’s success is its very high consumer satisfaction rate. “Timeshare has an 80.3% satisfaction,” Nusbaum reported. That means that the majority of people who buy this product love it and one out of five buyers this year were repeat buyers. It matches the way people live and the longer they own it, the more they like it.” He added that 47 U.S. states now have at least one timeshare resort and that Florida is still leading the pack with 378 resorts and 24% market share. In a session entitled “Current Trends,” a panel including Scott Berman, partner, PriceWaterhouseCoopers; Douglas Kulig, president, OBM International; Robert Phillips, svp, business development, The Ritz-Carlton Club and Richard Ragatz, president, Ragatz Consulting discussed the steady growth of fractionals. “With the Ritz-Carlton Club, we’ve been able to leverage Marriott’s success,” said Phillips. “While fractional is a niche, it’s clearly becoming a very big niche that is building on the demand for second homes.” The panel was in agreement that compared to condo-hotel units, consumers purchase fractionals primarily for their own use rather than to make a profit as part of a rental pool. “Condo-hotel units are generally more for investment purposes, but fractionals are like buying a house,” said Kulig. Phillips pointed out that to cater to fractional owners, certain amenities are services are critical. “With a fractional it’s usage first and the focus should be how well you can execute what you promise because the experience is so important. The little touches mean a lot. Owners will treat it like a home so having the ability to store items makes a big difference,” he said. Peter Yesawich, CEO, Yesawich, Pepperdine, Brown & Russell was the conference’s keynote speaker and led a discussion on the changing nature of today’s travelers. He reported that 14% of travelers have an interest in timeshares, according to a study by the National Travel Monitor. One primary factor today that is affecting how travelers plan their vacations is the Internet. “Today, 80% of houses have Internet access and the Internet is responsible for one out of two lodging reservations,” said Yesawich. “Now, 56% of consumers use the Internet exclusively when planning their vacations.” Yesawich also explained how vacation ownership fits the growing trend of family vacations. “About 71% of parents wish their family spent more time together and that affects the way they think about their vacations. This is great news for timeshare, which is geared towards family.” Flexibility and personalization are also characteristics of today’s consumers, according to Yesawich. “People increasingly want to personalize everything they buy so they want a vacation that is tailored to them…that is what we are going to see more of in the future.” Although the still young vacation ownership industry continues to see very positive numbers, Yesawich concluded saying, “45% of travelers still have a negative opinion of timeshare, that’s proof that there’s still lots of work to be done.”