Introduction
In the ever-evolving landscape of the hospitality industry, resort developers are constantly seeking innovative ways to attract guests and ensure sustained revenue streams. One strategy that has proven to be not only resilient but also profitable is the incorporation of timeshare programs. In this blog post, we'll navigate the terrain of timeshare benefits, providing valuable insights for resort developers looking to elevate their success in the industry.
Stable Revenue Streams
According to ARDA (American Resort Development Association), the global timeshare industry saw a 5.6% increase in sales in 2020. In a more recent report prepared by Deloitte the quarterly timeshare sales volume was up in Q2 2023 when compared to Q2 2022 increasing 3.4 percent from $1,892.8 million to $1,956.6 million, demonstrating its resilience in challenging economic times.
Timeshare agreements provide developers with a predictable and steady income, creating a foundation for financial stability even during market fluctuations.
Increased Property Value
The 2023 State of the Vacation Timeshare Industry, reported that sales volume increased by 30% to $10.5 billion in 2022, recovering fully to the level seen before the impacts of the COVID-19 pandemic. This along with the average transaction price in the U.S. now at $23,940 highlights the growing perceived value of vacation ownership.
By integrating timeshare options it enhances the perceived value of the property, attracting a diverse range of buyers and investors.
Enhanced Customer Loyalty
A study by Ernst & Young found that 80% of timeshare owners would recommend vacation ownership to others.
Timeshare fosters a unique sense of customer loyalty. Owners often return to the same resort and become staunch advocates, driving referrals and promoting the property through word of mouth.
Operational Efficiency
Resorts with integrated timeshare models often experience higher occupancy rates compared to traditional hotels. In 2022 the average occupancy of a timeshare resort was 77%, compared to 62% hotel occupancy, according to Smith Travel Research, whilst rental revenues increased by 21% in 2022 totaling $2.7 billion
Elevated occupancy rates lead to improved operational efficiency, reducing the impact of seasonality and optimizing overall performance.
Global Market Reach
Whilst the majority of timeshare industry activity takes place in the USA which is contributing over $10.5 billion per year to the U.S. economy (ARDA) the timeshare industry spans across 121 countries according to a recent global survey.
Resorts can leverage timeshare offerings to attract an international clientele, expanding their market reach and fostering a global brand presence whilst allowing resorts to diversify their revenue streams, tapping into a lucrative market while providing diverse vacation experiences for guests.
Conclusion
In the realm of resort development, the strategic incorporation of timeshare programs is not just a trend; it's a proven pathway to success. The vacation ownership industry's consistent growth, coupled with the numerous benefits it brings to developers, underscores the resilience and profitability of the timeshare model. Resort developers keen on not only weathering industry changes but thriving in them should consider the valuable advantages that timeshare arrangements bring to the table.
As the vacation ownership industry continues to evolve, embracing the timeshare model may very well be the key to unlocking enduring success in the competitive hospitality landscape.
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