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The Value of Vacation

ARDA posted the following blog on its web site, VacationBetter.org and is encouraging resorts to spread the word. This is not copyrighted material; ARDA prepared it for your use. So, use away! The site also has infographics that might be useful in promoting sales/resales.

How do you place a value on vacation?

Do you measure a vacation’s value by finding a good deal on airfare? Getting a chance to relax? Spending precious time with your loved ones? Chances are, it means different things to different people. Over the last decade there have been numerous studies conducted to measure the value of vacation. The good news is that the research has found vacations are good for you – that taking regular time away has positive effects on health, wellness, job performance, relationships and lifestyle.

The bad news is that millions of Americans each year choose to ignore the evidence. Last year, 169 million Americans did not take all of their earned vacations days last year!

In a new infographic from the American Resort Development Association (ARDA), taking time to get away has important health and lifestyle benefits that, if neglected, can lead to negative consequences. Ever hear of burnout? Yes, research has found that people who don’t take time to reset their batteries are more likely to suffer from burnout. Everything from work performance, added stress, strained relationships and decreased mental stamina are among the many negative results from not taking time to get away from it all.

The timeshare industry and its owners say that in addition to the lasting health benefits, the pre-paid nature of ownership guarantees that you will vacation at least once a year and ensures you take future vacations. In fact, owners save $18,160 over 18 years of vacationing with timeshare, compared to an average hotel vacation over the same time period.

But the real value of taking regular time off with loved ones is the special memories it creates. How do you place a value on that?

ARDA’s Social Media “Listening” Program

ARDA’s Social Media “Listening” Program

The American Resort Development Association (ARDA) has spent the last several months listening online to social media to learn what timeshare owners, guests and prospects are saying about the product. One of the reports resulting from the project is called the HARK Report. According to ARDA, “[The HARK Report] does not include any hard data or suggestions for what to do with the information, but rather is meant to spark ideas and prompt discussion among our members.” Nevertheless, The report does offer a number of ideas for resorts to consider when hoping to promote sales, rentals or owner  occupancy.

Here are the observations and ideas produced in the April 2015 HARK report:

Observation #1: People LOVE being able to cook on vacation.

Idea:

  • Offer content on how to get the most out of your timeshare kitchen.

Observation #2: People don’t like how time consuming and far in advance they have to plan.

Ideas:

  • Offer suggestions for making this process easier.
  • Explore why planning in advance can be fun and improve the vacation experience.

Observation #3: Family traditions keep people going year after year, and involve more than the location.

Ideas:

  • Consider a marketing campaign about how timeshare helps create family traditions.

Observation #4: People want to know how to use their timeshare after the prime “family vacation” years.

Ideas:

  • Offer suggestions for how to use a timeshare alongside a changing family.
  • Suggestions: Moms’ weekend away, kids’ trip, traveling abroad with older kids, visiting college students overseas during their study abroad semesters, sports club retreats, etc.

Observation #5: They appreciate having space to spread out rather than cram into a hotel room.

Idea:

  • Offer content to build on this primary value proposition about timeshare. [Says the HARK Report organizer, “People WANT us to listen online.”]

The May 2015 report conclusions:

Observation #1: Timeshare makes vacationing a financial possibility for larger families.

Ideas:

  • With the ability to add space without adding to the annual cost, families can grow without the cost growing too.
  • A prepaid vacation that grows with your family.

Observation #2: When offering advice to others on how to vacation on a budget, people suggest gifting or renting timeshares.

Ideas:

  • Why not give someone a prepaid vacation?
  • Great for those early on who can’t afford one yet. From parents to their kids, the gift of a vacation.

Observation #3: Location is everything to timeshare owners.

Ideas:

  • When consumers love a location, timeshare makes it easy for them to go back.
  • How can they go exactly where they want to go?

Observation #4: There is still appeal in going to the same place every year.

Ideas:

  • Discuss the perks of knowing your vacation as well as you know your home.
  • Answer the question: How can they experience the same place differently every visit?

Observation #5: When people explain the benefits of timeshare, they consider it the best of all worlds.

Ideas:

  • Create a visual comparison of what’s similar and what’s different from other lodging options.

The June 2015 report offers observations about what is being discussed on social media sites, without adding additional ideas:

  • The topic of sales is popping up more and more.
  • Current owners sing the praises of timeshare, while suggesting people look at resale options before buying directly from a developer.
  • Sales techniques seem to be producing some off-putting results, in and out of the sales office—including online.
  • Location continues to be of significant importance, with many suggesting a “try before you buy” rental option for at least a year before making a purchase.
  • Timeshare employees remain an important, integral part of the overall vacation experience for guests & owners, as unique and interesting people who also provide a useful perspective on the location around them.
  • Bloggers are reminding readers: there is no perfect time to take a vacation and the best vacation is the one you actually take.
  • They are also asking how you view your vacations: As an annual week of family bonding or a financial burden?

Among ARDA’s several projects aimed to educate the consumer about timeshare is VacationBetter.org, which they launched several years ago. This is a good resource to give to prospects who want a third-party authority to learn about vacation ownership. While you’re at it, why not go to Facebook and “Like” ARDA’s consumer Facebook page? ARDA is the only trade association we have in this business and their staff is dedicated, hard-working and committed to making our business more acceptable to consumers. Not a member? Sign up here and tell them “Sharon Scott sent me.” I’ll buy you a drink at the next convention!

What in the [Timeshare] World Are We Thinking?

[Excerpts of this post appear in the July 2015 edition of Resort Trades (ResortTrades.com). Below is the full article.]

Michael Szwajkowski photo

Szwajkowski, Executive Vice President, Capital One, voices optimism for 2015.

“With significant debt capital available in the bank and capital markets, we expect developers to move forward with financing their growth plans, and our Vacation Ownership Survey reflects that industry posture,” said Michael Szwajkowski, Executive Vice President, Capital One.

Financial holding company Capital One Financial Corporation (www.capitalone.com) conducted a survey of timeshare professionals on emerging trends and industry insights at the recent ARDA World 2015 conference in Orlando. Szwajkowki’s observation followed findings like these:

• 33 percent of those surveyed cited construction and development lending as most important for the industry, nearly triple the 12 percent response in last year’s survey.
• 30 of respondents expect the trend of renovation and modernization of existing properties to gain the most momentum in 2015, markedly down from last year’s 51 percent response.
• 50 percent of industry professionals expect points-based structures to generate the most interest in the next year, followed by travel club memberships (32 percent).

This was music to Capital One’s ears and it’s music to ours, too. These survey results lend credibility to our former supposition that there was an increase in optimism at ARDA World this year. Many timeshare industry professionals expect sharply increased demand for construction loans in the coming year. Last year, working capital loans were pretty much topping the list of ‘must-haves.’ This year they were cited as most important by only 27 percent of respondents, a decrease of more than 40 percent from the prior year. This would seem to indicate that resorts are more and more operating in the black, at least those resorts able to afford the ticket price to attend the convention. The bank reported 94 percent expected consumer interest to be stronger or on par with the past year, while 6 percent anticipate a decline. (Wouldn’t it be interesting to question the 6 percent?)

Thirty percent of respondents expect the trend of renovation and modernization of existing properties to gain the most momentum in 2015, markedly down from last year’s 51 percent response. This is of particular interest as our industry grapples with maturing resorts slipping further into decline. On the other hand, it could be that many of last year’s respondents achieved their funding goals and financing has become more readily available.

“The timeshare market appears to be getting stronger in the United States and abroad,” said Jim Casey, Senior Vice President, Capital One. “Capital One is well-positioned to work with developers to take advantage of consumer confidence in the industry.”

To which we would only add, “Hear, hear!”

Life After ARDA World 2015: Reflections

ARDA World 2015 is over. (Many attendees’ hangovers linger on, however, as I write this.) It’s time to ponder what we learned. The Opening General Session on Tuesday certainly made a positive Act One. In Act One, Scene One, we greeted this year’s crop of LEAPsters. These are the recipients of an AIF educational program who are sponsored by their employers to undertake a year-long program of study. We applaud the ARDA team for a really great program that is grooming tomorrow’s leaders in the industry.

One of LEAP’s projects was to design an investigative educational session, the Legacy Resort Management Forum, to discuss the top concerns of maturing resort HOAs and managers. Data gathered from a survey of resort managers showed these to be 1) the increasing rate of owner defaults in payment of maintenance fees, 2) the rising costs of maintenance fees and 3) resales. Forum participants discussed possible remedies including resorts offering a variety of activities and services to earn additional revenue; resorts providing assistance to owners who wish to sell their timeshares including crafting a classified ad and finding advertising agencies; permitting owners to stagger payments of their annual fees and communicating more clearly with boards to explain the importance of increasing maintenance fees.

Jan Samson of VRI made an interesting comment about this last point. She observed that frequently a resort’s HOA is proud to announce they avoided increasing maintenance fees, perhaps at the cost of needing to defer maintenance. We agree with her advice to continuously point out to boards the long-term benefit of staying competitive with hotels and other resorts. If this means you must increase maintenance fees, then managers need to educate their constituency about why it is vital to the health of the resort.

Dale Goodman of Goodmanagement said their resorts have a policy of making at least one change every year to keep looking fresh. One year they’ll change the carpeting, another year they will replace appliances, etc. In this way, owners will continue to see more clearly where their maintenance fees are going.

During the general session, ARDA President Howard Nusbaum listed the association’s most recent accomplishments, among which was to undertake a “listening” project to track and answer consumer questions and concerns about timeshare. The association is fully committed to assisting developers’ sales and marketing efforts through the activities of its Reputation Management Department and their achievements are impressive.

Also in the forefront at ARDA this year was The Starwood Vacation Club spinoff from its publicly held parent company. We remember the buzz created when Marriott Vacation Club became an independent entity. Today, that company’s sales and financial viability appear to be stronger than ever. We’re expecting to see similar results from Starwood (or whatever their new name might eventually be). Head of the new independent will be Matt Avril, who has shown himself up to the task many times in the past. It will be an interesting phenomenon to watch.

Another interesting change in the vacation ownership industry lately has been the consolidation of development companies into less than ten major entities, with the emergence of a group of secondary controllers of rental inventory. That’s why Resort Trades has committed itself once more to supporting the organization representing these companies, the Cooperative Association of Resort Exchangers (C.A.R.E.). Linda Mayhugh of Advantage Travel has been nominated to be the next chair of C.A.R.E. and will most likely be inducted during its May 2-5, 2015 conference at the Westin Annapolis. Look to C.A.R.E. to soon discuss a name change to reflect the evolution of this 60-year-old non-profit organization. Whereas formerly, it was made up of smaller, independent developers looking to exchange inventory, C.A.R.E. now is made up of resort professionals involved in moving inventory.

Attendees at the meeting were estimated to be 2,500, with 99 exhibit booths, many of them first-time exhibitors. It is vital to retain these first-timers as active, participating members of ARDA. During a meeting of the Suppliers Council, Chair Jordan Beckner who owns Fiberbuilt Umbrellas & Cushions commented that he did not begin to get full value from his ARDA membership until he started getting involved by serving on committees and councils. We will be following up with many of these ‘newbies’ to share ideas on how to get the most out of their ARDA experience. We need to continue to support the association in any way possible for the excellent work it does for us all.

Tuesday’s general session paid homage to companies that had supported building the coffers of ARDA ROC, the ARDA Resort Owners’ Coalition. Resorts participating in the program request small donations from timeshare owners as part of their annual maintenance fee billing process. The funds are then used to support lobbying efforts in their interest. This process is strictly regulated by Federal law, by the way, before anyone begins to think moneys are going to pad the pockets of the Big Seven or any other company.

Prior to the introduction of the keynote speaker, Jay Baer, a digital marketing expert, we enjoyed an very creative and entertaining video featuring outgoing ARDA Chairman Franz Hanning, president & CEO of Wyndham Vacation Ownership who shared the myriad number of responsibilities imposed on an ARDA chairman. Hanning passed the baton to the newly appointed chairman, Stephen P. Weisz, RRP, head of Marriott Vacations Worldwide Corporation.

Baer shared some of his insight into optimizing your online world through using smart marketing, which he described as being about help, not hype. “If you’re wondering how to make your company seem more exciting, you’re asking the wrong question,” he said. “You’re not competing for attention only against other similar products. You’re competing against your customers’ friends and family and viral videos and cute puppies. To win attention these days you must ask a different question: “How can we help?”

ARDA Then And Now

In 1989 on my first day of work as membership director at the American Resort Development Association ARDA (then called ARRDA for the inclusion of the word, residential), my boss, Cynthia Huheey, and then-president Tom Franks began to explain “timeshare” to me. It was a business about which I was unfamiliar and, in fact, what little I had heard was not very positive. Over the next few years ARDA  and its volunteer officers and board of directors faced down challenges: There were a number of crooked marketers selling ‘vaporware,’ plus one of the biggest scandals occurred in California when a company called Glen Ivy sold the same inventory to multiple customers.

For the most part it was an energy-charged, positive period encouraging creativity among entrepreneurial developers, marketers and exchange companies. Marketers were in their element: sending direct mail, opening off-premises sales booths in high-traffic tourist areas and employing contests to gather names and phone numbers. And of course there were those who sought to hoodwink the crowd.  It was the Wild West and ARDA served as posse for the straight-shooters by denying membership to unethical players.

With limited consumer protection in place at the time, Tom, Cynthia and our highly respected legislative affairs person Stephany Madsen helped lobby larger developers and marketers to self-police the industry to shut down miscreants. As I remember it, ARDA did it all with a team of less than ten people. We each did the work of two or three. (Today, ARDA has approximately 30 employees.)

A tribute to ARDA’s success was the entrance into the market by publicly-held hoteliers including Disney, Hilton, Marriott and Hyatt and with them, the decade of consolidation. The new millennium witnessed the growth of large companies becoming public and performing asset-backed securitizations. These larger developers provided a clearer field of play for smaller, independent developers and with them, brought greater security for a handful of specialty lenders. Interestingly, the recent recession separated the wheat from the chaff, both among developers and lenders. Resort operators with sound marketing practices who set higher credit score standards and their lenders were the victors.

These days ARDA continues to face down threats, most of them in the form of governmental groups looking to double-tax timeshare owners. Typically, owners hold an interest in real estate that is often held in a trust in exchange for vacation points, which can be put to use for greater flexibility when they don’t wish to visit their “home resort.” One of ARDA’s never failing duties is to explain to bureaucrats that owners pay property taxes and should therefore be exempt from transit occupancy taxes charged to hotel guests.

When I left ARDA’s employ in 1992, there were approximately 800 corporate members – just about the same number as today. The majority – approximately 80 percent – of ARDA’s corporate members are suppliers and vendors if one includes resale, exchange and management companies in addition to those who provide everything from finance, marketing and legal services to mattresses and outdoor furniture. In essence the value ARDA provides to its members comes from participation in the annual spring convention and the fall conference. Attendees come to discuss deals, find new business or, simply, to remind one another they are still viable.

Amazingly, the ARDA events continue to witness the nascence of creative new ideas, such as new pay-for-service arrangements whereby established developers provide sales and marketing services for resorts no longer in development. If you could time-travel to past ARDA conventions, the attire of the attendees would indicate where you were on the timeline: Gold chains and white bucks signified the late 80s/early 90s’ mavericks; three-piece designer suits befitted the heyday of the late 90s until shortly before the recession. These days, ‘resort casual’ signifies a more self-assured, confident group intent on making sound business decisions, rather than an impression.

With the economic crisis now in the rear-view mirror, today’s attendees most likely will continue with a no-nonsense approach by bringing thoughtful, inventive ideas that innovate new ways to promote the vacation lifestyle. It would be unfair not to mention the ARDA team’s innate sense of dedication to improving the lives of their members and member resorts’ customers. There are more than 2,000 trade associations operating in the Washington, DC area. It’s doubtful that many of them share this level of commitment.

How can you get the most from ARDA in 2015?

Lena Combs

Lena Combs, CPA

I asked my clients at Averett Warmus Durkee (AWD) CPAs how they plan to get the most from their participation in the Washington, DC-based timeshare trade association, the American Resort Development Association (ARDA). One of the firm’s partners, Lena Combs, says she and another partner, Tom Durkee, are fully committed to another year of service to the to the timeshare industry through volunteer work with the Over the years, the two have increased their participation by taking on an ever-escalating workload, which now includes four ARDA committees.

“I find the HOA Outreach Committee very interesting,” says Combs. “Its programs are focused on providing resources and education to legacy resorts. Another committee I particularly enjoy is the Meetings Committee, even though it’s hard work. We meet three times a year and spend many, many hours working on formulating content for the annual convention educational sessions, both before and during our meetings as a group.”

“Participating in ARDA’s leadership requires attending meetings several times a year, speaking at industry conferences and writing articles about our area of specialty for Resort Trades, Developments magazine and other publications,” adds Lena. “But it’s well worth it as we grow our own knowledge and expertise while helping improve the business environment for the industry.”

Tom serves on the Finance and Research committees. These two have learned that greater involvement in the trade association gives them access to decision-makers from the major development and management companies. A supplier looking to do business with this select group of professionals can expect to increase networking opportunities by participating in ARDA committee and council meetings.