Vacation Ownership What Is It Really
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Transcript of Vacation Ownership What Is It Really
Vacation Ownership: What is it, really?
TopicsConcept of vacation ownershipVarious vacation ownership productsResort life-cycle theory
Concept of Vacation Ownership
• Timesharing = the act of sharing vacation time at a luxurious resort facility
• Timeshare consumer purchases the right to occupy a vacation-type home/unit for a set period of weeks
• Home-type unit but no day to day maintenance usually associated with home ownership
• Resort offers high quality recreational and leisure services
Timeline of vacation ownership industry
1964 – Ski resort in the Alps
1970’s – converted hotel projects in USA
1980’s – lots of unethical developers selling non-existent properties
1983 – first timeshare law passed in Fla, USA
1984 – Marriot entered timeshare industry
1990’s – public trading of timeshare companies
1992 – Disney and Hilton enter industry
Canada Timeshare Act, 1992
1999 – Alberta Fair Trading Act (Timeshare contracts regulation)
2005 – Ontario Consumer Protection Act, 2002
2003 –Timeshare companies publically traded
Vacation Ownership Product Mix
By Time By Legality By FacilityTimeshare Deeded Mixed-Use Timeshare
Resorts
Fixed Week Right to Use Fractional Timeshare Resorts
Float Week Leasehold Private Residence Clubs
Point
Purchase
Vacation Ownership Product Mix
• Timeshare– Consumer has access to
vacation accommodation sold by weeks, allowing access to a specific unit and all resort common areas
• Fixed week– Consumer has access to
vacation accommodation and resort useage for a set week each year for duration of contract
• Float Week– Consumer has access
rights to a specific unit for a specified range of weeks within a year
• Float unit– Consumer’s usage period
(week) is fixed but the actual unit used may vary, but must be of same class/type (i.e. one bedroom) as per contract
Vacation Ownership Product Mix
• Points Purchase– Consumers purchase points not weeks– Each point has a predetermined value which is used for vacation
club usage– Points can be used for various vacation club products e.g.
cruises, golf– Highly customer focused but complex to manage
Vacation Ownership Product Mix
• Deeded– Owner receives title for the property– Has legal ownership for period of use– Can use property in perpetuity– Can will the property– Can sell the property
Vacation Ownership Product Mix
• Right to Use– Owner is given
contractual rights to use facility for specified period (e.g. 20yrs) at which time the contract terminates
• Leasehold– Similar to Right to Use– At end of lease
property reverts back to developer
– Leasehold period of use is shorter than Right to Use
Vacation Ownership Product Mix
• Mixed Use Timeshare– Combination of a traditional
resort and a timeshare resort
– Part of facility operates as a traditional resort with full amenities e.g. restaurants, spa, gym
– And another area operates as under an ownership model
• Fractional Timeshare Resorts– Upscale product where
owner owns high number of weeks e.g. 3 – 12 weeks
• Private Residence Clubs– Offer services similar to
country clubs– May have golf courses, pro
shops, dining– Larger accommodation
units
Vacation Ownership Design
Campus style resort with 2 bedrooms, 2 bathrooms
Golf oriented resort units have 2 bedrooms with 2 beds each to accommodate foursomes
Vacation Ownership Design
1990’s townhouse units in clusters around small pools. Smaller resorts
2000’s large resorts developed in phases900 units or more
Butler’s Product Life Cyclefor
Tourism Product Development
Exploration
Involvement
Development
Consolidation
Stagnation
Decline
Sustainable Growth
Rejuvenation
Butler’s Product Life Cycle
• Exploration– Interest in new travel area
emerges– Product brands and service
quality levels are established
– Pricing is set to ensure consumer interest
– Distribution is selective and focuses on the primary target markets
– Promotion techniques are geared to the early adopters of the product
• Involvement– The developer refines their
marketing and sales approach to increase the identified potential customer to the area
– Includes onsite and offsite marketing programs
Butler’s Product Life Cycle
• Development– High level of product and
service development– Developer drives consumer
demand by moving the price point upward
– Marketing and sales is high but now uses market penetration strategies relevant by each target market
– Rapid increase in sales and profits
• Consolidation– Market has now matured in
both level of competition and consumer demand
– Marketing is key to developer’s success
– Tactics include product differentiation, lower pricing
Butler’s Product Life Cycle
• Stagnation– Very low cost and product
delivery– Sales have peaked– Profits begin to level off
• Decline– This phase can be
impacted both positively and negatively depending on previous competition levels
– Developer may introduce new versions of product, new distribution methods, price reductions to rejuvenate interest
– If these are not successful then arrival levels to area will drop
Levels of Timeshare Products
• 5 levels– Luxury
• $20,000 per interval
• Penthouse, 1,500 sq ft +
– Up-market• $15,000 - $25,000
• One room unit 1,000 sq ft or two room unit 1,800 sq ft
– Quality• $9,000 - $17,000
• One room unit, 800 sq ft or two room unit, 1,400 sq ft
– Value• $7,000 - $10,000
• One room unit, 800 sq ft or two room unit, 1,000 sq ft
– Economy• $5,000 - $8,000
• Studio, 600 sq ft, one room unit, 900 sq ft