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With Regards: Archives ~ |
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| Jerry Sikes,
RRP / CHA, is President of Professional Resort Operators, Inc., Scottsdale, Arizona. He has 35 years in the Hospitality
Industry / 25 years in Timesharing, and is the current Co-Chairman of ARDA Arizona as well as Chairman of the Arizona
Timeshare Management Association. Jerry is a frequent guest speaker regionally and nationally on all aspects of
Timeshare Management and a frequent contributor of articles for industry publications. Email: boyjerry@cox.net
Phone 480-947-3300 Fax 480-947-6853 Web site: http://www.protimeshare.com
"Things will probably come out all right, but sometimes it takes strong nerves just to watch." -Hedley Donovan- The soothsayers in the industry formally known as Timesharing have long foretold that Vacation Ownership has run its course and that the coming thing is something called Flexibility. They indicate that the current trend, fad, vogue, style, thing, rage, mode, fashion, craze, or furor will not be the traditional 7 day vacation. This prognosis was of course the result of employers all over the world eliminating the vacation benefit for their employees. No longer is the standard a week's vacation after one year on the job and 2 weeks after two years. Such benefits have become passé. Family togetherness is no longer a part of family values. Added emphasis on this projection came from the elimination by Cruise Lines worldwide of the 7 day cruise from their itinerary and increasing the number of 1 or 2 day cruises they offer. Confirmation was added to this forecast when the Airline Industry major carriers reduced their fares for 1 or 2 day turnarounds made no more than a day or two prior to traveling and added penalties for those passengers who booked reservations more than 6 months ahead of their travel date and planned to remain at their destination more than 5 days. These prophesiers anticipated that any reference to the term "week" during a sales presentation would result in an objection which could not be overcome, thus acceptable conversion ratios could not be achieved. One of the most visible sales trainers stated the following in a recent industry publication: "Scratch the words 'weeks', 'two-bedrooms', 'red time' from your selling repertoire when discussing the product offering." This Flexibility syndrome is said to be unlimited. Part of its abnormalities is that it includes many activities formally purchased by cash or credit card, at the spur of the moment. Such as Rental Cars, Jeep Tours, Hotel Rooms, Theater Tickets, Dinner Out and other items of enjoyment now require advance planning and the use of currency other than cash. Those extolling the virtues of Flexibility indicate that it is ideally suited for the current needs of the Market because those in the Market desire to make several short sojourns rather than one or more 7-day-long vacations. That the consumer has neither the time nor inclination to do more than skim the surface of experience and that the volume of experiences achieved is the thing. Therefore, because of this market shift, owning a 7 day use period at a Timeshare Resort will not fill the Markets current or future needs, nor will the configuration of the plans built around the 7 day use plan provide the desired Flexibility. They indicate that the Market demands the opportunity for a weekend stay at a destination resort, a day or two on another occasion at a Name Brand Hotel somewhere in the world, and the opportunity to use the remaining prepaid parts of the new Vacation Ownership plan to obtain the benefits of other consumer products. There are those of us who contend that the current and future Market has been misread. That the current trend toward several short breaks from the routine being experienced, and which in turn indicates the desire for greater Flexibility, is not an indication of wants or needs but rather the result of current necessity. In the late 60's, only about one-third of the families contained working couples. The man, who was generally the primary bread winner, typically had employment which afforded a week or more of paid vacation and enough disposable income to spend that time on extended trips to the beach, the mountains, visiting major attractions or foreign countries. Because the spouse did not work outside of the home almost nothing interfered with that opportunity. Between 1970 and 1995 the average weekly wages in the United States fell almost 16%. For the working man, the hit was over 22%. Consequently, by the mid 80's, increasing costs and lower wages required that two-thirds of married couples had to work full time to maintain their standard of living. Currently, for over 70% of those married couples between the ages of 19-55, that standard of living is one considered to be middle class. While the purchase of a year-round second home was probably not affordable, with both adults in the family working full time most were able to stay about even and the purchase of a week or more at a Timeshare Resort seemed to be an attractive hedge against future downturns in disposable dollars. During this period time became a factor. The average work week and commute time was continuing to rise. The juggling of work schedules, daycare, activities, meal preparation, yard work, and planning vacations became a hassle. Drive to locations, shorter trips, and weekend getaways seemed the only way to release the stresses of day-to-day pressures. Products and services such as, nannies, personal trainers, personal shoppers, lawn & pool services, and Jenny Craig, which removed some of the decision making stress became extremely attractive. Little wonder that the Market has been misread. The Flexibility issue did not exist because it was what the consumer and potential Vacation Concept buyers desired, it was there because it was temporarily necessary. The lethal combination of less dollars and time coupled with more stress and the sure volume of baby boomers created an illusion for those who were intent on expanding into new markets. Yes, Vacation Clubs and Point based products achieved a degree of success and their gains in the Market Place (about 25% of current sales) have achieved a self fulfilling prophecy. However, what is the real message being sent by the Market place? It is anticipated that in the next 10 years the average family income will rise to over $70,000, almost double the current standard. Fewer and fewer households will require two wage earners to maintain the middle class lifestyle and a great majority of women will leave gainful employment. The return of a full-time manager to the household will greatly reduce demand for timesaving services and subsequently, the added stresses. No longer being pressed for time and with more than adequate disposable dollars, (the home bound spouse may well be adding to those disposable dollars with some type of cottage or e-commerce activity) these families will no longer want to skim the surface of experiences, they will want to immerse themselves fully and completely. Those individuals who fall between the ages of 55 - 65 will become the fastest growing segment of the Americas' population between 2000 - 2010. This is also the age when the majority of Americans retire with not only a nest egg plus, but a reasonable expectation of good health. These will be highly active individuals deeply involved in community and not nearly as prone to moving into "retirement communities" as their predecessors. They may not want to leave their established home, but they will want to engage in the creative use of their newly found discretionary time and disposable dollars. The Market will be made up of 50 million singles between the ages of 19 and 39, 40 million adults over 40 (2/3rds of whom live alone) and 110 million families. These young, healthy, vibrant, well educated and affluent members of the Market will not be long content with a product which, while offering the illusion of greater flexibility, requires the consumer to play within a set of rules totally controlled by the Brand. The Market will quickly identify that Flexibility carries with it a price, not only in dollars but in the intrinsic value or the most basic foundation beyond the fantasy being presented at the point of sale. That intrinsic value being the underling ownership of real property and the power of control which comes via a vested interest. Final thought Scottsdale Camelback Resort (SCR) in Scottsdale, Arizona is typical of the product which new thinking, by those who tout the New Leisure Industry, have decreed to be outdated. SCR was a purpose built Timeshare Resort which offered to the consumer a deeded interest in a fixed 7 day interval, in a fixed villa which fitted their family requirements. The product was quickly absorbed within the market and became one of the few Timeshare Developments which achieved a 100% sellout. By 1990 the property was under the control of its collective owners via the Scottsdale Camelback Resort Association, Inc., its member elected Board of Directors and being operated by an independent Professional Management firm. Today the Resort offers the following degree of flexibility, beyond the opportunity to occupy their fixed 7 day interval in their fixed villa, to its deeded owners. The opportunity to exchange for another location - via Resort affiliation with the two major exchange firms (RCI and II) via individual memberships, a small independent firm which requires no membership and internally for a different use period or villa at SCR. This exchange opportunity is exceptional because the facilities at SCR and the level of staff services allow the resort to maintain both the RCI Gold Crown and the II 5 Star rating, there is no off season, and the demand for inbound exchanges far exceed the supply. The opportunity to exchange their SCR Interval Interest for a Cruise via Resort affiliation with Ice Gallery as well as both RCI & II. The opportunity to rent their deeded interest via the HOA operated Rental Program, in any given year when occupancy or exchange is not an option. The opportunity for additional SCR occupancy via Bonus Time and the opportunity for additional occupancy of other similar Resort accommodations via affiliation with VRI's Vacation Tyme. The opportunity to purchase additional Interval Interest at SCR via the exclusive on-site resale program offered by Desert Vacation Realty or the opportunity to sell the Interest they own through DVR if they so choose. The opportunity to access most other consumer products such as Rental Cars, Hotel accommodations, Jeep Tours, Hot Air Balloon Rides, Cattle Drives, Horseback Rides, Float Trips, Concert Tickets, Dinner Reservations and much more through the SCR Concierge desk. So what's the Point! The point is that an exceptional degree of Flexibility can be achieved without the benefit of a single one, and that’s no MYTH. That the astute consumer in the Market today, tomorrow and for the foreseeable future can and will identify the intrinsic value of the underlying ownership of real property and the power of control which comes via a vested interest. And that if the developers in the New Leisure Industry fail to offer opportunities such as the traditional timeshare deeded interval interest because they have misread the Market or do not want to give up the control which comes via Club rather than Deed, the consumer will find what they want within the RESALE MARKETPLACE and on the INTERNET. PS: This resale marketplace marketer may well be that spouse who is no longer required to work outside the home however, who is engaged in e-commerce from their home office. |
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