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!”

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