Vacation Ownership What Is It Really
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Transcript of Vacation Ownership What Is It Really
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Vacation Ownership: What is it, really?
TopicsConcept of vacation ownershipVarious vacation ownership productsResort life-cycle theory
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Vacation Ownership Design
1990’s townhouse units in clusters around small pools. Smaller resorts
2000’s large resorts developed in phases900 units or more
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Butler’s Product Life Cyclefor
Tourism Product Development
Exploration
Involvement
Development
Consolidation
Stagnation
Decline
Sustainable Growth
Rejuvenation
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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
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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
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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
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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