One of the major trends during the past nine years has been the increased entry of hotel companies into the vacation ownership business. Most of their entries occurred in the first half of the 1990s, followed by their emerging presence, and finally their significant influence within the timeshare business at the close of that decade. It is obvious that the hotel industry now views timesharing, or vacation ownership, as a needed hospitality product line. The merging of the hotel and timeshare industries has resulted in the growth of the mixed-used development concept. A mixed-use-development? a development in which there co-exists a combination of hotel and timeshare facilities? is typically organized in either of the following arrangements: 1. A mixture of hotel and timeshare uses within the same building structure. In this arrangement, the property will typically appear to operate like a hotel, although a portion of the guest accommodations will belong to the timeshare ownership program. Building floors or building wings may separate the transient hotel rooms and the timeshare units, although this is not always the case. 2. A mixture of hotel and timeshare uses located on one common property campus. In this arrangement, the property will consist of a stand-alone transient hotel facility, with separate buildings housing the timeshare accommodations. In this case, there is a clear physical separation in the housing of timeshare owners and the hotel guests, although a shared amenity base is typical. The ?Mixed Use Development? panelists at the Interval International-sponsored Timeshare Investment Conference held last October in Atlanta reported that both of the above arrangements have been successfully utilized in the timeshare arena. This is encouraging news for existing hotel owners who are interested in timesharing, but who are limited in their property expansion capabilities. Each arrangement offers its own unique considerations. Issues related to arrangement #1 center around daily operations and timeshare maintenance fee budgeting issues. For example, should part of the bellman?s wage base be included in the timeshare owners? budget? Should a timeshare owner feel obligated to tip the bellman? What is an equitable way to allocate the cost of a shared reservation system? Are the profiles of the hotel guests and the timeshare owners compatible, or will divergent profiles present new operatonal challenges? In arrangement #2 most issues center on the shared amenity base and public facilities. If timeshare owners have their own building pool, how much money should they contribute for access to, and use of, the hotel?s ?mega? pool area? Have certain shared recreational amenities been appropriately sized for use by both groups? Relative to shared public space, it has been my observation that both mixed-use arrangements will positively impact existing food and beverage outlets. From a financial standpoint, it is my opinion that a properly conceived mixed-use hotel and timeshare development will provide the optimal yield on these two asset classes. HVS Timeshare Consulting Services intends to further study the aspects of mixed use resorts, as we believe these facilities will continue to have a significant presence in the timeshare industry.
