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Mr. Lobo
Condo Hotels
What is the Value of Owning a Timeshare?
By Nigel Lobo, Vice President of Resort Operations, Grand Pacific Resorts
So often I hear from my colleagues in the hospitality industry, what is the value proposition in owning a timeshare. The question is raised on both sides of the coin. What is the value in it for the timeshare owner and what is the value in it for the developer and/or manager of a timeshare resort.
At face value it is fairly easy to understand the value proposition in terms of the developer. Most often, timeshare developers are originally resort/hotel developers or condo developers. When looking into whether the concept would be a good alternative for their real estate, or a good compliment to mix into their current resorts they analyze some very compelling numbers (viz. depending on the resort market and its prices: 52 weeks x $20,000 = $1,040,000 per resort unit or condo).
On the individual timeshare owner’s side the review of benefits is not so clear cut. It is brimming with words like lifestyle, happiness, togetherness, rest and relaxation. The role of the management company is to bridge the gap between the developer zeal for a healthy financial portfolio and the timeshare owner’s longing for memorable vacations.
As a background, the timeshare product has many configurations. The product can be intervals (weeks), points, pre-sale of room nights, vacation/travel club, etc. It can be based upon a single site or multiple sites through both internal options (a club with multiple resorts) or through the affiliation with the exchange companies (RCI, Interval International or a few others). In the past, and especially in the US, the products were more real estate based (fee simple) and the ownership was until perpetuity. Now many products are “right to use” and have a specific number of years of use (e.g., 30 years, which is now being re-evaluated to shorter use periods).
No matter what the timeshare use plan, the question of keeping an owner engaged is all important to their happiness. That nebulous term of happiness equates into use of the product and that use translates into an owner keeping his/her loan payments and maintenance fees current.
Our Value Proposition encompasses seven key areas of focus and analysis:
Create Lifelong Memories
In purchasing a timeshare, our owners have opted to invest in a lifetime of vacations. The majority are families, with children of all ages. At Grand Pacific Resorts, many of our owners purchased when they had young families; their children grew up with timeshare as part of their regular vacationing routine. Now those children have offspring of their own. And we are seeing the next generation as Guests and Owners. These multi-generational vacations further solidify the value proposition of the fond memories created by owning a timeshare.Diagnose the Critical Components of the Value Experience
It is important to survey timeshare owners to see how they value their ownership. We want to know what is important to them, so we can help them keep their vacations a priority and make them passionate about their resort and management company. At GPRM we used a professional survey company, Customer Count, to solicit feedback from our 45,000+ owners on a wide range of topics germane to their vacation ownership. The feedback is tremendously valuable. Each resort manager takes a deep dive into the survey results with targeted follow up strategies and specific action plans.Offering
Timeshare sales staff makes promises that absolutely need to be fulfilled. Because we have owners returning year after year, we can’t slough off these guarantees. Not only did owners invest in beautiful “sticks and bricks” but also in service, caring and a feeling of community. It is up to us in resort operations to keep that feeling alive. As in a marriage when a couple pledges to keep their word to each other, we assure the family who purchases their lifetime of vacations that they will get a return in perpetuity.Benefits
The benefits of a timeshare vacation range from enjoying the comforts of the same beautiful resort year after year to exchanging to exciting locations around the world. Owners may also rent their units (we utilize an owner rental agency, ResorTime.com) to “outsiders” or lend their units to friends and family. As a developer expands its property base, the advantage to the owners becomes more what we call “internal” or “network” exchanges and the use of Bonus Time. Bonus time is simply a benefit of ownership to take advantage of available space at extremely low rates for shorter periods of time. For instance, a family living in Los Angeles wants to come down to go to the Del Mar racetrack for a couple of days. They own a Christmas week at Carlsbad Inn. Based on availability they can opt for a night or two at an exclusive “owner only” rate as an added benefit.
Another valuable benefit we extend to our timeshare owners is “Day Use” at their home resort. This extremely popular feature allows owners to maximize their timeshare value by access to all resort amenities at their home resort such as the fitness center, swimming pool and other resort amenities.Alternatives and Differentiation
How is the owning of a timeshare different from other vacation options? First, it is owned. Secondly, at time of purchase the commitment was extremely strong. A key challenge is for us to reignite those strong positive feelings and keep them alive throughout the ownership lifecycle.
The biggest enemy of timeshare is not, as some think, resale. The biggest enemy is procrastination. If we can keep our owners absorbed in their purchase and delighted with their ownership,we can enrich their lives, keep them part of our family and, quite frankly, keep our HOAs financially strong. How do we keep them from putting off planning their vacation?
Grand Pacific Resort Management recently launched a “Let us help you plan your vacation” email campaign which serves as a gentle reminder to our owners on their myriad vacation options with a call to action. We also offer Vacation Ownership 101 classes targeting our owners, so they can fully understand how to maximize the usage of their timeshare. Over the next few months, webinars and conference calls will further enrich our owner’s education and understanding of their timeshare ownership. As new options become available (new resorts, new split week options, cruise exchanges, etc.), we can keep them up to date on how they can incorporate these changes into their timeshare use.Proof
I have often been asked, “What evidence have you got that you can do what you say?” We have proof. At each of the 14 resorts managed by Grand Pacific Resort Management, our Combined Service Scores are at an all time high; each resort is well ahead of service goals set at the start of the year. Our resort occupancies are about 5-10% higher than they were same time last year, with a marked increase in owner usage at their home resort. Our owners regularly write us heartfelt testimonials about their vacation experiences. We use these at the sales tables (coming full circle in our discussion of a value proposition) and as reinforcement for our message of making vacations memorable forever.Communication is the Key to Owner Engagement.
The opposite of Love is not Hate. It is “indifference”. If a timeshare owner becomes indifferent we have failed! To this end, we recently appointed a new Director of Owner Loyalty. This Owner Loyalty “Czar” is charged with all owner communications: newsletters, webinars, conference calls or resort activity surveys. She helps drive owner engagement and assists our owners to overcome procrastination by reaching out ahead of time and reminding them to take action; Bank a week and start an open search to make a reservation, or to place their week in the rental program, if that is their inclination.
What happens all too often, to even the most ardent timeshare owners, is that they simply put it off. One hot August morning they’ll wake up and say,”Hey honey, we should use our timeshare for Labor Day at the beach.” When they find out they are too late, and the space is gone, they become disappointed and complain, “we can never get this timeshare we own to work.” Or, “our timeshare is too hard to exchange.”
It is also in our Director of Owner Loyalty’s sphere to send out maintenance fee payment reminders. We find that if the ongoing communication has been strong, and usage is in place prior to these “friendly notices” the response is far more positive and collections far easier.
Once realized, the Value Proposition of owning a timeshare has far reaching benefits. It works for the individual owners as they get to enjoy the vacation of their dreams; it works for the HOA with dues-paying owners and lower delinquencies; and it works for the future positive growth of the timeshare industry in general. A true win-win all around!
Nigel Lobo has the overall leadership of Resort Operations at Grand Pacific Resorts, including Inventory Management, Owner Services and HOA Support, as well as Resort Maintenance, Design and Purchasing and new Business Development. Mr. Lobo is responsible for building and retaining a strong management team to maintain Grand Pacific Standards of Excellence across all resorts. Mr. Lobo is a hospitality veteran and has held various senior executive positions in the hotel and resort management field for various hotel brands including the Intercontinental Hotels Group, Marriott, and Hilton Brands in Asia, Europe and the United States. Mr. Lobo can be contacted at 760-431-8500 or nlobo@gpresorts.com Extended Bio...
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