TIMESHARE INDUSTRY ENTERS NEW ERA
Source: ARDA
March 15, 1999
Under the influence of major hotel company brand affiliations
and the influence of the capital markets, the timeshare industry has finally entered a new era of respectability.
$1.3 billion has been raised through the capital markets for the industry since 1993, with more than $700 million
of that figure coming in the last 12 months. Companies such as Fairfield Communities, Signature Resorts, Vistana,
Bluegreen, Trendwest and Silverleaf have experienced dramatic growth in stock offerings-- regardless of when these
companies actually began to be publicly traded.
Wall Street has embraced timeshare companies lately. Signature raised more than $500 million in its initial public
offering in 1996. Fairfield, which has been traded publicly for some time, has raised $125 million, and Silverleaf's
IPO in 1997 netted it $61 million. The acceleration really took off between 1995 and 1997, when the industry went
from $200 million market capitalization to $3 billion market capitalization.
Yet, according to Rip Gellein, chairman of Orlando-based Vistana, the market is largely untapped. Gellein estimates
that only 4 percent of the potential market of those who can afford to purchase a timeshare have done so. In the
United States and Canada the timeshare industry has just recently shed an unsavory image-- an image created in
large part by the high pressure sales tactics of its early days. Now, with a new found respectability and favorable
market conditions, there are many who think the industry is poised to mature.
According to American Resort Developement Assn. (ARDA), the five main reasons that people purchase timeshare are: