Learn How to Grow Your Business from the Experts

Learn How to Grow Your Business from the Experts

Did you know that only about 50% of small businesses are able to last three years or longer? Do you want to be one of the businesses that is to succeed, profit, and grow? 

We know that you do! That’s why we partnered with Steve Strauss, USA Today’s small business columnist, to create a guide dedicated to helping you own a successful business. 

If you want to be successful you need to learn from those who have been successful in the past. They have lived and worked through the same path you’re about to go down and this ebook helps you take lessons from their successes and failures without having to go through the same struggles yourself. It doesn’t matter what type of business you are about to start, the lessons are the same! Click on the link below and learn how you can run a business that is as successful as possible. The timeshare industry has gone from being reviled as a giant scam to a linchpin in the hospitality industry. In fact, sales volume in 2014 was $7.9 billion, with $1.9 billion in rental revenue, according to the American Resort Development Association. Occupancy for the year was 78 percent vs. 64 percent for the hotel side of the business.

Gordon Gurnik, president of RCI, a timeshare vacation exchange company, the timeshare industry generally is strong right now because of actions taken during the recession. “It really focused itself on efficiency and what it needed to do to grow in the global downturn and coming out of that,” he said. “Especially the strong companies and the larger companies and certainly the branded companies have done very well coming out of that downturn and have had really good performance over the last couple of years.” Howard Nusbaum, CEO of ARDA, said a major factor behind timeshare’s success is that the Street has really fallen in love with it. That’s because during the downturn it saw that vacation ownership consumers were very credit-worthy, he said. “Even in the darkest days, nine out of 10 times, timeshare owners were current with their mortgages. That isn't because we have some kind of secret sauce,” he said. “That's just because our average purchaser owns a home, is married, went to college, has a good credit rating and they're not going to allow their credit history to be impacted over a fixed note for seven years and $20,000.” That success with Wall Street has worked hand in hand with the availability of financing, which David Gilbert, president of Interval International, a timeshare membership and leisure services company, said is one of the key drivers in vacation ownership. "The positive news for developers is that the financial markets have reopened," he said. "The recovery of the real estate market and overall health of the U.S. economy, including the improvement in employment rates and financial health of consumers, are also important factors."

Joining forces
One of the most significant trends in the timeshare industry is consolidation. "We began to see the first wave of consolidation during the recession when companies that didn’t have the financial wherewithal to operate without access to capital were acquired by competitors," Gilbert said. "We’re also seeing some of the early entrepreneurial developers who have enjoyed success for decades looking for exit strategies. And, of course, there are acquisitive companies who are actively looking for growth opportunities." The biggest recent deal, announced at the end of October, involves Interval Leisure Group acquiring Vistana Signature Experiences, formerly Starwood Vacation Ownership, the timeshare branch of Starwood Hotels & Resorts Worldwide. The value to Starwood is $1.5 billion. Vistana's 22 resorts brings ILG's portfolio to 200 managed resorts. ILG is the parent company of Interval International and owns and manages the Hyatt Residence Club and Hyatt Vacation Ownership programs, which it purchased in 2014. Then in November, timeshare developer Diamond Resorts International announced it is purchasing Intrawest Resort Club Group for $85 million. The acquisition of Intrawest's nine properties will bring Diamond Resort's portfolio to more than 100 properties.

"Some of the recent news has been pretty significant both in our industry and the lodging side and I think it shows a commitment of companies to continue to expand and grow and gain efficiencies but also to consolidate customer bases that can be beneficial," said Ed Kinney, VP of corporate affairs and communication for Marriott Vacations Worldwide Corporation. "In a large sense, people want that piece of mind and comfort of knowing of what they're going to get. I think the consolidation will start to establish some of that, where the consistency will be more prevalent and larger in quantity."
Franz Hanning, president & CEO, Wyndham Vacation Ownership, said consolidation is attractive for a number of reasons.

"There's always going to be that feeling that consolidation brings scalability and it brings the ability to leverage your fixed cost into a much broader company. Like most companies or most businesses, size matters," he said. "The fact that you can offer your customers more choices and more places to go vacation, you're going to continue to see some consolidation in our business here."
Gurnik said that like in the broader hotel segment, timeshare sees cycles of consolidation over time.

"You'll still see some consolidation in the next couple of years in the industry," he said. "There's a lot of people interested in the timeshare industry and interested in investing in it. As long as that's true, I think there will be some deals that happen."

Adapting in 2016
Gilbert said the weakness in the economy in many regions, such as Latin America and Europe, presents challenges. The industry is also working to create a viable secondary market for inventory that’s no longer being utilized. "And, of course, we’re closely watching the 'shared economy' models that are disrupting the traditional hospitality sector," he said. "We believe that customers who are attracted to vacation ownership prefer the consistency of quality and professional management offered by our industry." According to Hanning, the challenge for Wyndham Vacation Ownership is to adapt its product to the next generation of owners. "The thing that excites all of us about the millennials and the people coming up this next generation is that the whole concept of sharing is their DNA," he said. "When you start talking to them about timesharing, that concept is totally something they're on board with because they're already doing that. They've grown up on Facebook, they've grown up with Uber, they've grown up on Twitter. "There is much more opportunity for our products as long as we adapt it and modify it to the ways that they're looking to experience your product. I think there's a lot of runway for us here."

Nusbaum agreed that getting millennials to understand perpetuity is a certainly a challenge, as well as the way the industry sells to them. "The old-school timeshare sales process was very programmed and scripted and was a process, where I think millennials like to look on their phone and they want to compare. They want to be educated. They're skeptical. They want to co-create," he said. "They don't want me to come in and say, 'Here is your vacation.' They want to look at all you offerings and say, 'I want one from A, and two from B, and 3 from C, and I only want to use it every third year.' We have to get better at co-creation and transparency." According to Gurnik, the industry needs to continue to focus on driving innovation. "The actual, physical experience, that idea of extra space and the amenitized properties that people build today, those will still continue to resonate very strongly with the up-and-coming consumer," he said. "But it's about the service delivery and the interaction that timeshare companies have with consumers that everyone will continue to need to evolve and really focus on how we do that and doing that very well to continue to compete."