According to the State of the Vacation Timeshare Industry: United States Study 2011 Edition conducted by Ernst & Young, sales of vacation products held steady with a slight increase from the previous year, while nearly 80 percent of owners continued to travel to their timeshare destination. Ten percent of the timeshare occupancy rate was comprised of renters as more timeshare developers expanded their rental program offerings to reach consumers unfamiliar with vacation products.
“People are still making budget-conscious decisions when it comes to travel, which is why the value proposition of timeshare products is so appealing to our approximately 8 million owners,” said Howard Nusbaum, president and CEO of the American Resort Development Association (ARDA). Compared to a 58 percent occupancy rate at U.S. hotels last year, ARDA points to the spacious accommodations, such as the option to prepare meals in the timeshare unit rather than dining out for every meal as with a traditional hotel stay, as a primary reason for continued high occupancy rates at timeshare resorts and satisfaction rankings from timeshare owners.
In the past year, the industry has also added sophistication and ease to the way owners can buy timeshare intervals. Instead of selling just one week per year, many now offer increased flexibility by offering “points” that owners can use to customize their vacation needs. They can break up or extend vacation weeks, travel during various times of the year, and/or stay in various unit types at a range of locations. Some also offer biennial products that allow owners to use intervals every other year, instead of each year. About 73 percent of survey respondents have intervals of the traditional weekly variety; about 55 percent have some form of points-based products; and, 36 percent of respondents have biennials.
The growth in the rental market is another indicator of the industry’s vitality. Renters comprised ten percent of timeshare stays last year, or 7.9 million nights rented, of the 79 percent total occupancy. “Developers look to rental programs as a way to reach new consumers and experience the products first-hand,” continued Nusbaum. Currently, 82 percent of timeshare resorts offer some form of rental program.
Other report highlights show that 55 percent of new timeshare sales come from new owners, while 45 percent of timeshare sales are from those who already own a timeshare with that developer. This demonstrates high satisfaction with the product through repeat buyers. In addition, the sales costs associated with repeat sales are lower than for first time buyers.
The industry’s outlook for the future remains positive based on its track record and performance over the last several years in attracting lenders to the industry, drawing new owners into the market, maintaining sales price levels, and continuing to inform and educate the public about the timeshare product.
The report was conducted by Ernst & Young and commissioned by the American Resort Development Association (ARDA) International Foundation.
The American Resort Development Association (ARDA) is the Washington D.C.-based professional association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has over 1,000 members ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The membership also includes timeshare owner associations (HOAs), resort management companies, and owners through the ARDA Resort Owners Coalition (ARDA-ROC). For more information, visit www.arda.org or ARDA’s consumer website at www.VacationBetter.org.
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