Hotel Prices

[davemy]

If you haven't priced out Hotel Rooms lately you should. It might make you feel a little better about your Maint. Fee.

 

[wmgjr]

If you haven't priced out Hotel Rooms lately you should. It might make you feel a little better about your Maint. Fee.

I've come to believe mf are a data point driving hotel prices. The big names with heavy presence in timeshare always want to make sure we're saving at least a few hundred just to feel good about our ownership on the worst days.
And competitors use their data points if they're not in timeshare.
Just my thought

 

[n42]

I
I've come to believe mf are a data point driving hotel prices. The big names with heavy presence in timeshare always want to make sure we're saving at least a few hundred just to feel good about our ownership on the worst days.
And competitors use their data points if they're not in timeshare.
Just my thought

ARDA recently reported that annual TS sales are around $10 billion, whereas AHLA reports that annual hotel sales are estimated at $352.3 billion in the US alone. Relatively speaking, timeshares are a small pie. It is more likely that hotel prices help to inform TS maintenance fees, rather than the other way around.

 

[Sandy VDH]

ARDA recently reported that annual TS sales are around $10 billion, whereas AHLA reports that annual hotel sales are estimated at $352.3 billion in the US alone. Relatively speaking, timeshares are a small pie. It is more likely that hotel prices help to inform TS maintenance fees, rather than the other way around.

MF should be based on the actual $$ cost to run things, even along with a Management fee %, even bad debt, and reserve fees. Hotel room pricing is a lot more about profits and scarcity. You also have to figure that TS run at a occupancy rate much higher than hotels. Hotels have to be priced to make up for the fact that the average hotel occupancy rate in the US is 44%. So you have to price the one unit sold to cover your loses on the other 56% the resource goes without any revenue. TS just don't have to do that.

 

[Sugarcubesea]

If you haven't priced out Hotel Rooms lately you should. It might make you feel a little better about your Maint. Fee.

@davemy , I so agree, I travel for work, and staying at a mid level hotel like a Hampton Inn or a HIlton Garden Inn are now at $190 to $280 a night in the two spots I fly to the most Atlanta and Phoenix for work

 

[pedro47]

We just price a Marriott hotel in Virginia Beach, VA. The hotel price was over $300 per night (taxes not included) and not even an ocean front view.

 

[wmgjr]

ARDA recently reported that annual TS sales are around $10 billion, whereas AHLA reports that annual hotel sales are estimated at $352.3 billion in the US alone. Relatively speaking, timeshares are a small pie. It is more likely that hotel prices help to inform TS maintenance fees, rather than the other way around.

Why are we comparing sales to maintenance fees?

 

[CO skier]

ARDA recently reported that annual TS sales are around $10 billion, whereas AHLA reports that annual hotel sales are estimated at $352.3 billion in the US alone. Relatively speaking, timeshares are a small pie. It is more likely that hotel prices help to inform TS maintenance fees, rather than the other way around.

You are comparing apples and oranges. The $10 billion TS sales are essentially "membership fees"; this compares with $0 hotel membership fees.

The $352.3 billion are nightly hotel revenue. This is the equivalent of TS annual maintenance fees calculated on a nightly basis, which is in addition to the TS membership fee.

My timeshare system has an annual budget based on actual operating costs to run the whole thing. The cost of a hotel room anywhere does not enter into the calculation.

 

[dioxide45]

I've long thought that Marriott Vacations does plump up the rental rates they charge for Vacation Club properties on Marriott.com as sales fodder. They can then make it look like timeshare ownership is much cheaper. That said, I haven't seen a sales presentations in years where they tried to compare timeshare ownership to the cost of booking hotels. The math doesn't work out as much today as it did 15-20 years ago.

 

[davemy]

I love how topics or threads get side tracked all the time. The point is Hotel rates are ridiculous for places we all want to vacation. Plain and simple.
For example, look up the Courtyard on Hilton Head Island from May to October or the Holiday Inn on Palm Beach in Aruba.

 

[n42]

You are comparing apples and oranges. The $10 billion TS sales are essentially "membership fees"; this compares with $0 hotel membership fees.

The $352.3 billion are nightly hotel revenue. This is the equivalent of TS annual maintenance fees calculated on a nightly basis, which is in addition to the TS membership fee.

My timeshare system has an annual budget based on actual operating costs to run the whole thing. The cost of a hotel room anywhere does not enter into the calculation.

Interesting chart I found on ARDA's website, which shows that 90% of timeshare revenue comes from sales/financing, and only 10% comes from management fees, etc:

 

[n42]

I love how topics or threads get side tracked all the time. The point is Hotel rates are ridiculous for places we all want to vacation. Plain and simple.
For example, look up the Courtyard on Hilton Head Island from May to October or the Holiday Inn on Palm Beach in Aruba.

Why do you think this is? From my perspective, there is ample competition in most markets. Hotel rates appear to be largely determined by supply/demand.

Marriott's profit margin in 2024 was 36%. This is a healthy margin, but not excessive IMO. If the market demanded more affordable accommodations, then it would require hotels to reduce costs in order to maintain margins.

 

[dioxide45]

Why do you think this is? From my perspective, there is ample competition in most markets. Hotel rates appear to be largely determined by supply/demand.

Marriott's profit margin in 2024 was 36%. This is a healthy margin, but not excessive IMO. If the market demanded more affordable accommodations, then it would require hotels to reduce costs in order to maintain margins.

Marriott's profit however isn't necessarily based on hotel rates directly. Marriott earns profit from management and franchise fees. It would be more interesting to know what the profit margins are for the hotel operators or REITs that own the hotels.

 

[n42]

Marriott's profit however isn't necessarily based on hotel rates directly. Marriott earns profit from management and franchise fees. It would be more interesting to know what the profit margins are for the hotel operators or REITs that own the hotels.

Good point. According to "Understanding the Economics of Hotels" from Wolfgramm Capital:

After all of revenue and expenses are accounted for, select service hotel operators can expect to generate somewhere in the mid- to high-30% range in terms of profit.