NATIONAL REPORT? Vacation ownership is a business of many and complex parts. For developers considering market entrance, the complexities of real estate development combined with the requirements of operational management can result in a significant challenge. Add a rapidly growing product array fueled by consumer demand for increasing flexibility, and market entrance can be intimidating to potential participants. For example, today?s marketplace includes traditional fee-simple or right-to-use products, split- and floating-week offerings, an increasing range of point-based programs and vacation clubs, as well as hybrid configurations. Internal exchange systems add increased complexity. ?The initial challenge for an industry entrant is to design a program that addresses market requirements, incorporates the flexibility to adjust to changes within the environment and allows for future growth,? said Paul Rishell, president for the Americas for Interval International. ?The goal is an infrastructure that facilitates maximum operating efficiency.? The critical first step is a comprehensive analysis of existing market circumstances and intended growth path. There are basic questions that need to be asked and accurately answered prior to the design phase of a vacation ownership program. These questions include: 1. Will the property serve a regional, destination, or urban market? 2. Will it operate as a single-site product or a multiple-resort entity? 3. How many resort locations are involved? 4. Will the resort serve as a component of a mixed-use project, typically including hotel accommodations? 5. What reservation system linkages are involved? 6. Are value-added programs such as golf, ski and spa part of the scenario? 7. What is the impact of seasonality on the resort location? 8. What unit types will be offered? 9. What amenities will be available? 10. What are the vacation requirements and frequency patterns of the prospective or existing owner base? In defining an optimum vacation ownership program, you must assess the actual and potential impact of every relevant design variable, said Rishell. ?This exercise serves as the basic component of success.? Industry experts agree that design solutions vary depending on the individual aspects of each potential market. Today?s vacation ownership developers have incorporated varying strategies when approaching the marketplace. ?There is no one timeshare model or formula that ensures a developer?s success,? said Kathleen Conroy, president of the HVS Timeshare Division. ?The key is doing your homework and knowing your market as well as the consumers it serves. Your progam must accommodate the demands of both.? While the challenges of market entrance exist, the opportunities within the industry are vast. Over the course of three decades, vacation ownership has evolved into an integrated leisure lifestyle product. Timeshare fills a need for today?s consumer looking for quality vacation products and services that are hassle-free, cost-effective, flexible, and reliable. Worldwide timeshare sales totaled $6.1 billion in 1998, representing an increase of 20% since 1994. According to State of the Vacation Ownership Industry 1998: U.S. and The World, sponsored by the American Resort Development Association (ARDA), the national industry trade organization, 5,156 vacation ownership resort projects exist worldwide, up 24% since 1994. In 1998 alone, 735,000 weekly vacation intervals were sold worldwide. The number of vacation owners around the world has skyrocketed 60% since 1994, topping five million families in 1998. The U.S. continues to dominate the worldwide timeshare industry. There are more than 1,600 timeshare projects in the U.S., representing 33% of the world share of timeshare projects. There are two million owners in the United States, or 44% of total owners worldwide. Europe follows with 1,315 resorts and 742,127 owners. ?The number and size of resorts are growing, demand and competi
