LAKE BUENA VISTA, FL— At the fourth annual Timeshare and Resort Investment Conference held here last month at the convention center adjacent to Disney’s Contemporary Resort, the consensus was in a down economy, timeshare as a segment not only is remaining stable, it is flourishing, albeit with a long way to go in terms of growth. As a market performer, timeshare, or vacation ownership, still hovers well below the consumer radar; however, its greater acceptance as a market segment presents a wealth of opportunities for developers, hotel chains and operators looking to broaden the sector’s potential reach— along with their revenue streams— while raising its overall profile within the lodging industry. “People need to understand that timeshare not only has come of age, but the marketplace is huge,” Howard Nusbaum, president/CEO, of the American Resort Development Association (ARDA) told HOTEL BUSINESS®. “With only 5% penetration of people who can afford a timeshare in terms of households in the United States, that means 95% of people who should own a timeshare, don’t. That means opportunity. Now that we’ve become an accepted mainstream product, the ability to more traditionally market to those households is really an oyster, it’s really an opportunity.” The latest worldwide timeshare sales figures show volume of $8.6 billion, with the U.S. representing more than half of that at $4.8 billion. In addition, the current sluggish economy and a flight from high-risk investing have forced a re-evaluation by consumers of where to place their money as a hedge against inflation, producing a fertile field for developers to cultivate. “It’s twofold,” said Nusbaum. “In one sense, people said: ‘I was watching my 401K, and over the past couple of years, I’ve lost 25% to 30%; I’ve seen $100,000 go away… If I’m going to risk investment or spend money on experience, better to spend it on experience. That $100,000 I lost in the market, would I have been better to take 10% of that and buy something for the family to use every year? It’s more tangible, it’s more experiential.” The other track Nusbaum noted is a values clarification since the events of 9/11. “There is this desire to have a discipline to spend time with the family, to take fabulous vacations, to build a memory book… Timeshare’s a vehicle to do that,” he said. Nusbaum noted sector descriptors— timeshare versus vacation ownership— also need to be wrangled. “I was running from the ‘T’ word,” Nusbaum told the audience in his opening address. “It’s one of the banes of our industry whether it’s timeshare or vacation ownership. The reality is in order to define it to the traveling public, the consumer, you have to use the ‘T’ word.” In fact, statistics released in the 2002 National Leisure Travel Monitor produced by Yesawich, Pepperdine & Brown/Yankelovich Partners, awareness of timeshare is high, approximately 81%, when the sector bears that name. The term vacation ownership drops the recognition factor by about half, to 41%. Nusbaum added ARDA is “no longer interested in running from the term ‘timeshare’; we are interested in modernizing that term and having the general public understand what vacation ownership is.” Toward that, ARDA has formed a consumer education task force to help the traveling public regarding what Nusbaum termed a “very mainstream product.” In addition, the association also formed an alliance with the American Hotel & Lodging Association (AH&LA) to concentrate on the timeshare industry relative to its commercial and business needs. The joint vacation ownership committee expects to aggressively promote and support the segment— once considered an also-ran to the lodging industry. Edwin McMullen Sr., senior partner of E.H. McMullen & Associates, is heading the committee, which will meet twice a year: in the spring at the ARDA International Convention and in the fall at the AH&LA Conference in New York. Peter Yesawich, president/CEO, Yesawich, Pepperdi
