The Timeshare Beat: Jerry Sikes; Conclusions

As usual, I attended the most recent (2006) version of the American Resort Development Association (ARDA) Convention and Exposition. Two specific presentations stood out in my mind; The first was an educational session titled 'Know Today's Owners to Prepare for Future Buyers' and the second was the Breakfast of Champions that featured a presentation by Daniel Ruettiger. That name is not familiar? How about Rudy?

"It took years of fierce determination to overcome obstacles and criticisms, yet he achieved his first dream - to attend Notre Dame and play football for the Fighting Irish. He was the only player in the school's history to be carried off the field on his teammates' shoulders."

The educational session was a panel with Scott Berman, a partner with PriceWaterhouseCoopers as moderator and three exceptional speakers - Ann Barker the Director of Consumer Insight for Starwood Vacation Ownership, Inc., Howard Bendell the Director of Market & Research Analysis for Interval International and Dick Ragatz the President of Ragatz Associates. The basis of the session was recently completed Consumer Focused Industry Research.

First let me relate what I thought was one of the highlights... When Ann took the podium, she pointed out that this session was one of only two educational sessions where the term 'Owners' was used in the title. (I searched my program and could not find the other one.)

Anyway; during the presentations it was pointed out that 47% of all recent sales were in the Secondary Market and of the 53% purchased from Developers, 67% were with some form of points. This was emphasized to indicate the continued growth of the point type timeshare/vacation ownership plans. As you are aware the primary pitched used by many Developers to sell consumers a points based program is that of flexibility. When asked by the moderator of the panel to describe flexibility as it is used in our industry, the panel members struggled to answer. One could conclude that if industry experts were uncertain about this industry darling, so too would be the consumers.

The results of the aforementioned Consumer Focused Industry Research could have been interpreted another way and would have made for a very interesting discussion. Assume that 100,000 was the number of weeks (or week equivalents in points) that were involved in the study period reported during the presentation. Then, according to the data provided, 53,000 were purchased from Developers and of those approximately 35,500 were of the points variety. This would indicate that Developers sold approximately 17,500 traditional weeks. The overwhelming majority of these traditional weeks must have been some by the few Independent Developers, because almost all the Major Branded Developers only offer the consumers points based plans.

Assuming that the overwhelming number of transactions in the Secondary Market (47,000) were not involving point based plans, it would appear that consumer preference tilted toward the more traditional weeks format 64.5% to 35.5%. Back in 2002, the same Consumer Focused Industry Research indicated that, of all the transactions 67% were between the Consumer and the Developer and only 33% were within the Secondary Market. The conclusion could be drawn that, within a three year period, a 14% market swing has occurred away from the developer only offering the points based product and toward those Developers and the Secondary Market offering the traditional weeks format. If you take into consideration that well over 25% of all transactions made between the Developers and Consumers are actually between Developers and existing Timeshare / Vacation Ownership owners, the appeal of the points based plans to the general consumer may be well below that being proclaimed by those drawing the comparison. A different conclusion altogether...

I don't know how long ago it was when I first sat in a theater and watch the movie RUDY. I can remember that it was one of those movies that I sat still until all the credits had rolled. Could be, that I was just waiting for the tears in the corner of my eye to dry. Sitting in the audience at the Breakfast and hearing Rudy speak about his real life was even better than the movie. Every bit of the passion that got him to his dream is clearly obvious in every word he spoke about that dream. As it were, when Clark, Jodi and I were returning to Phoenix that afternoon, Rudy was setting in our row and we had the opportunity to enjoy his company for the 48-minute flight. He was on the way to Memphis, Tennessee for another speaking engagement. One of the things we talked about was keeping our dreams alive. Rudy gave us a couple of his of his insights: Excuses will kill your Dream. "What we're really talking about here is commitment. Until you make a commitment to your Dream, it's not really a Dream ... it's just another fantasy full of excuses. Fantasies don't come true because they're not real; we're not committed to them. When we make commitments, we eliminate excuses and they become Dreams ... and Dreams are definitely real." And Focus on your Dream and Never Quit. "It is always too soon to quit. If you quit, you can't succeed. By achieving your Dream you will be an inspiration to others. You will set the example and make an enormous impact on the world. Make it happen!"

FINAL THOUGHT

I have come to the conclusion that it's very important for our industry to never again have only one educational session at an ARDA Conference that uses the word Owner. Out of that conclusion and with the inspiration of Daniel "Rudy" Ruettiger. I have a new dream, that dream is to establish a situation where timeshare owners have a direct link to the timeshare / vacation ownership through ARDA via the new Resort Operations Council. It took years of fierce determination to overcome obstacles and criticisms, yet Rudy achieved his first dream - to attend Notre Dame and play football for the Fighting Irish. When his time came he was ready and he sacked the quarterback in the last 27 seconds of the only play in the only game of his college football career. I don't have years and years to work at achieving my new dream, however I do have the determination to overcome whatever obstacles come my way as well as the criticisms of my peers and those whose interests I serve.

JS 4/06