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New ARDA industry whitepaper - "Navigating the Future of Timesharing"

TUGBrian

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Another publication from ARDA that makes for some interesting reading and discussion!

(link to free pdf below)



The white paper provides insight into the evolving world of vacation ownership and the factors that are driving the continued evolution of the $35.7B industry.

here is an alternate link if the one above does not alllow you to download it:

 
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geist1223

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This might sound all great but some of the reality is that Companies such as Wyndumb can not even create/development a working WEB Site after almost 3 years of releasing it. The Younger more Technology Wise Generation will not put up with this incompetence.
 

gravityrules

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Selected items from this report:

10 million US households own a TS product or 1 in 13. This statement aligns with the other previously released ARDA report.

That % seems surprisingly high to me.

ARDA pres says this is a $35.7 billion industry, RCI director says it is a $21 billion global industry with $10.5B of that in the US, $6.2B in Mexico, $2B in Brazil.
75% of Mexico owners are from outside that country.

About 2/3 of the 1500 US resorts are not affiliated with 'the hotel and hospitality brands'. I assume that refers to 'the big 3', add HICV in there too if you want.

This report does posit continued consolidation or closings of independent resorts.
 

TUGBrian

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the 37.5 billion was a new number for me too....
 

jp10558

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They're maybe half way there IMO. At least for me. While they think it's less about larger / better accommodations than a hotel, when it comes down to it - that's and being cheaper are the main underlying value vs hotels. The on premises resort amenities and activities, especially ones included in the stay however you're staying are what differentiate a timeshare from an AirB&B. Having free minigolf, or ping pong, or pool tables, free movies, cheap activities etc. All the way up to some of the paid hiking with a llama or chairlift up a mountain, the pools and hot tubs, ideally adding saunas and maybe paid spas etc. Flexibility is important, but I'm pretty happy with the existing models. The only pain point is the very high exchange fees via RCI and II. This doesn't matter much for the big hotel brands as they can have low or free exchange fees inside their systems. But the independents NEED the exchange companies to be good IMHO, and really I'm still surprised that no one has disrupted the timeshare exchange duopoly. If it's true that ~70% of the actual resorts are independent, ARDA (or a management company or a new group those resorts should really want) ought to sponsor someone making a web app to do exchanges for sub $40 IMO. There's no reason it should cost more using a modern cloud hosted system. If GrubHub and DoorDash and 50 other companies can overlay millions of take out places that are all independent at a per order fee of around $6 - this ought to be a solved problem.

The above is a technology investment, but it's not a huge one. But forming a independent replacement at a much more attractive price than RCI or II will let the independents stay relevant for flexibility.

For the big players, given 2 of them each bought an exchange company, it's clear that they don't see the exchanges as really relevant to their strategy. It seems more likely that they're wanting to just take out what made up for not having a system from independents. Otherwise they'd be driving down costs rather than up.

On the use points for cruises and other experiences, I know that sells well, but I think pretty quickly anyone will work out it's way more effective to just pay cash. I again wonder about the surveys and such being reality because the idea that someone is buying a timeshare more for the "club" or "experiences" seems pretty niche. It's like buying a car for the satellite radio. I just doubt large masses of Millennials and GenZ want to plunk down tens of thousands of dollars to join any club or get a small discount or easier access or something to a future concert that you hope is for someone you want to see where it makes some sense to use the TS to get access.

As to the percentage of people owning a timeshare, I wonder if most people don't talk about it. I'm kind of "ashamed" to mention it for the first time to other people. I've been berated in the past to never buy a timeshare (before I owned one) and I've heard a lot of negative talk about them from people who don't know I use them.

I think they're right about expanding internationally, but they got to do it while keeping it in their system(s) rather than adding on ever more limited exchanges over top. Like it needs to just be part of HGVC / Club Wyndham / Worldmark etc. Or they just need to run it through the traditional sort of exchange systems. Almost no one is excited about 6 month out leftovers once they learn anything or try and actually use "the other locations". They're right that they have to keep at least some sort of value for the cost.
 

gravityrules

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I suspect the 1000 or so independent resorts may have less 'keys/weeks' than the 500 affiliated resorts. Independents tend to be smaller.


Do those top-line numbers represent revenue? sales?
 
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"There's a growing attraction to brand affiliations that align with a person's lifestyle,” and there has been for 30 yrs or more.
Even the "brand-conscious" people must know they've reached low marginal reality on that one. The brands that matter change, but the concept can't still be growing.
Anybody got examples of creative new "brand affiliations that align with a person's lifestyle”? Maybe costco shoudl design a machine thta will de-bag and de-bone one of its bagged birds, and then the TSs can put it in the full kitchens.
 

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I've been berated in the past to never buy a timeshare (before I owned one) and I've heard a lot of negative talk about them from people who don't know I use them.
LOL. My wife laughed at me when I came home from HI and said I had the name of a broker (Judy, though I ended up using Diane) and I was going to buy 1 (or 2 or 3 but TMI)
 

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Companies such as Wyndumb can not even create/development a working WEB Site after almost 3 years of releasing it. The Younger more Technology Wise Generation will not put up with this incompetence.
Somebody showed me the RCI site a long time ago. I thought it was a joke. I still do. The entire industry seems to be that way. I don't get it; however, they are smart enough to not let people use their sites til they have already ponied up and become a member.
I'll say this for the HGV site: it looks crude, almost cartoonish, but it works fine, otehr than the login page(s), which seem to depend on some kind of state-machine of the combo of browser and "path taken to get there".
 

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"many companies face the challenge of structuring their data correctly so they can fully embrace AI and other technological advancements."
"our industry is still in the data cleanup phase."
They really are slow-followers in the world of IT, and they know it.
 

jp10558

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"There's a growing attraction to brand affiliations that align with a person's lifestyle,” and there has been for 30 yrs or more.
Even the "brand-conscious" people must know they've reached low marginal reality on that one. The brands that matter change, but the concept can't still be growing.
I think they have to be pointing at the culture war political stuff that flares up every now and then. I wouldn't want to touch that with a 10ft pole if I was a public company, or really any company that had something to sell that had ANY chance of NOT being "written off by 30% of the population" for something that has 0% to do with the business model.

Even outside the fraught politics, the only way I could see this making any sense for accommodations is if you're actually having multiple "fictional" brands like Hilton or General Motors. I.e. you have a "brand" for as many "lifestyles" as you can afford to duplicate the accommodations in an area. I HGV thinks the partnership with Great Wolf Lodge adds something to somebody, but you've really got to be into them to spend the points they cost. Like Disney fan levels IMO, and I doubt GWL has that pull.

I feel like the Internet (for me anyway) has really destroyed a lot of brand value. Amazon especially in products.

All of the above being said - Timeshares sell enough vague, untrue, smoke and mirrors fluff already, why not have the themed sales rooms for "adventure people","beach people","young families",[insert made up brand category here]...
Somebody showed me the RCI site a long time ago. I thought it was a joke. I still do. The entire industry seems to be that way. I don't get it; however, they are smart enough to not let people use their sites til they have already ponied up and become a member.
I'll say this for the HGV site: it looks crude, almost cartoonish, but it works fine, otehr than the login page(s), which seem to depend on some kind of state-machine of the combo of browser and "path taken to get there".
I feel that way more about SPX. RCI I get a lot of value from their cash deals.
 

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LOL. My wife laughed at me when I came home from HI and said I had the name of a broker (Judy, though I ended up using Diane) and I was going to buy 1 (or 2 or 3 but TMI)
Yours too?

I found TUG first (well after my wife) and she thought I was insane. Her first TS trip was to the Elara 56th floor, she almost could have been sold retail.

Now its only my inlaws who tell me, you know you have to pay every year for the TS MFs.. right? We smile and nod.

Crazy thing is i know a few people who own TS, based on my disclosure. My CPA (can do math and saw the value) and Friend who owned a Free Lifeimte HK with his mom. His wife hates TS, but then again she doesn't want to learn how best to use what they have. After her vacations she seems like upset.

Still trying to share the TUG, but that's a whole other level of TS!
 

rickandcindy23

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Yours too?

I found TUG first (well after my wife) and she thought I was insane. Her first TS trip was to the Elara 56th floor, she almost could have been sold retail.

Now its only my inlaws who tell me, you know you have to pay every year for the TS MFs.. right? We smile and nod.

Crazy thing is i know a few people who own TS, based on my disclosure. My CPA (can do math and saw the value) and Friend who owned a Free Lifeimte HK with his mom. His wife hates TS, but then again she doesn't want to learn how best to use what they have. After her vacations she seems like upset.

Still trying to share the TUG, but that's a whole other level of TS!
Cynical in-laws? I think you should invite them along sometime.
 

jp10558

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I have to say, most people who come along generally think the MFs to places to stay or the cash rates are good deals. They're just allergic to the commitment which I kind of understand. While they're OK with subscriptions to say Netflix, or Amazon Prime they can also cancel them "easily".

Then there are the people who can't get away for a week every year due to kids, financials, jobs not letting them take vacation etc.

I think this is some of what the "Vacation Clubs" idea in the paper is trying to deal with, where you pay MFs when you go, but don't otherwise. Of course, it seems like those would have to be of far less value, because they'd not have a known "sales rate" and therefore be more like a likely really expensive discount booklet you buy... I never got much out of the "entertainment books" of coupons the fund raisers used to sell. And the push for "All Inclusive" - is that really of interest to a wide swath of people? The example AI fees on RCI I've seen make even my most extravagant eat out all the time and dinners at fancy restaurants trips look cheap. I suppose it's the alcohol, which I don't drink so never buy and most people I go with wouldn't really binge on that to make up the cost.
 

gravityrules

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Does this paper represent the direction TS companies want the industry to go more than what the customer wants?

The questions in surveys are often leading ... and result in predetermined outcomes.
 

jp10558

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Does this paper represent the direction TS companies want the industry to go more than what the customer wants?

The questions in surveys are often leading ... and result in predetermined outcomes.
I don't know about that - I think TS companies were recognizing MZ (millennial and genz) were less interested in the "old" TS idea of fixed week fixed resort. Hence all the points products. Apparently the points still don't seem "flexible" enough? What seemed against the common wisdom was the TS owners now trending younger rather than the assumed aging out of large swaths of the ownership. IDK how true it is, that could be statistical flim-flammery.

To me, given the salespeople can seemingly sell the current systems at the insane retail prices, IDK what the TS companies are seeing as the problem, unless they're faking all their stats in the recent surveys.
 

gravityrules

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The direction described is well beyond the 'points/weeks' discussion.
Experiences and the 'country club' social pitch is another level of abstraction from 'lodging'.
 

jp10558

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The direction described is well beyond the 'points/weeks' discussion.
Experiences and the 'country club' social pitch is another level of abstraction from 'lodging'.
Yea, I think the 'country club' thing is something people talked about at the traditional weeks resorts where you might see the same people year after year. Under the various floating and points systems, I wouldn't expect to see the same people, and TBH I've never really seen many people at the resorts when I've gone. I don't do pools though. I wonder how "social" any of the big systems are.

The experiences yea, that's so abstract and I think I said before, I really wonder how many people are finding that as compelling as the companies seem to want them to. I think various credit cards have tried to sell that stuff too, and it's never been interesting to me. I guess the various travel agencies they're bolting on to the systems are the practical part of this supposed "more valued than lodging" pitch? I mean, having cool stuff to do at the resort is nice, but unless they mean beaches or skiing as an "experience"...
 

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"There's a resurgence in country clubs"
Is this true?
The Wall Street Journal did a story in April that touched on this.

This story focused on golf:

"Consequently, the National Golf Foundation has seen a shift toward younger private golf club members on the heels of the pandemic. Since 2019, the number of golfers at private golf clubs has increased by approximately 25%, from just under 1.5 million to 1.9 million, according to the NGF. Adults under the age of 50 comprise 60% of those memberships, with young adults, ages 18 to 34, representing about 30%. The latter can include adult children of members, typically up to a certain age."
 

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Selected items from this report:

10 million US households own a TS product or 1 in 13. This statement aligns with the other previously released ARDA report.

That % seems surprisingly high to me.

ARDA pres says this is a $35.7 billion industry, RCI director says it is a $21 billion global industry with $10.5B of that in the US, $6.2B in Mexico, $2B in Brazil.
75% of Mexico owners are from outside that country.

About 2/3 of the 1500 US resorts are not affiliated with 'the hotel and hospitality brands'. I assume that refers to 'the big 3', add HICV in there too if you want.

This report does posit continued consolidation or closings of independent resorts.
Interesting stats indeed. We can certainly read quite a bit and speculate which strategies might emerge to "grow the pie" from the point of view of the developers. No AI needed here. Yet, it's common knowledge that economic conditions - local, regional or global along with demographic changes of current and potential new "participants" seem to have historically overshadowed all others as factors even if those factors might be stable. While vacationing may be a "right, not a privilege" may not be a universally held belief. The vacation industry is sensitive to the amount of disposal income available for any one persona or a family i.e. via real time spending or savings

Depending on whose stats we consider, Americans either account for 1/2 to 1/3 of the industry. Then when considering the demographic progression from the baby boomers to the younger generations with differing priorities when it comes to vacationing, the industry must provide the mechanism to "reimagine" the concept of vacationing with an experience of sorts or they will never be able to sell product to these newer groups of customers. They know how navigate the web and search for bargains. Price does matter. What is the experience worth? etc. Then, if they do, the location will matter. In this regard, we would consider secondary factors such as travel costs, especially when dealing with international locations. Then comes the next factor, namely, the local conditions of the nation. For example, leadership issues related to stability of the local economy and safety for residents and tourists. Can vacation ownership growth in a nation where there has been a longstanding Level 4 alert by the US Department of State? It matters to me. But, my demographic is irrelevant for the purpose of growth. Then, what does matter? I guess we'll find out soon enough.
 

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Not everyone wants to vacation with their mother in-law or even their mother.
 

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I don't know about that - I think TS companies were recognizing MZ (millennial and genz) were less interested in the "old" TS idea of fixed week fixed resort. Hence all the points products. Apparently the points still don't seem "flexible" enough? What seemed against the common wisdom was the TS owners now trending younger rather than the assumed aging out of large swaths of the ownership. IDK how true it is, that could be statistical flim-flammery.

To me, given the salespeople can seemingly sell the current systems at the insane retail prices, IDK what the TS companies are seeing as the problem, unless they're faking all their stats in the recent surveys.
Agree. For the industry to move forward and grow, at least in America, it must adapt by offering product that the MZers will be willing to purchase. I cannot imagine how this newer demographic, despite their savvy use of technology, is willing to play the "points and exchange game." In addition, I do not believe they are interested in financial obligations that have no end for which it is impossible to budget for. Those MZer that I have talked to about the TS industry are not at all thrilled learning that a HOA, mostly controlled by the developer and not the "owners" have no veto power in the majority of resort systems. Of course there is more. Nevertheless, the industry must pivot and "reimagine" itself to cater to the needs of a newer generation of vacationers. Will this be done by tweaking existing products still based on the legacy platform or will an entirely new product with activities (adventures) and experiences (much like cruise ships have done) to attract a newer and younger demographic? In my mind the latter seems to be more attractive
 
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