What is the Value of Owning a Timeshare?

By Nigel Lobo Vice President of Resort Operations, Grand Pacific Resorts | August 06, 2010

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:

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There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.