Timeshare’s moment in Asia is here but industry must tread ‘mindfully’
Barry Robinson: “The value of the shared ownership model is easier to measure and more compelling than ever.”
By Barry Robinson, 30 June 2023
With the second half of the year now upon us and leisure travel certainly on the rise globally, I’m struck by the pace of change and the positive progress that is being made as players throughout the experience economy – from entertainment to fashion, F&B and more – are joining forces with hospitality brands in new ways to meet the expectations and match the lifestyle preferences of a new generation of travelers.
Somewhat ironically, the need not only to recover but to future-proof the industry has forced us to get back to basics in terms of how we create value across the ecosystem to consistently surprise and delight at every touch point. Cross-sector collaboration is accelerating our ability to do so.
At the same time, continued uncertainty post-pandemic has made people everywhere very clear about their priorities, and they are not willing to compromise. Importantly, many have lost patience with the unexpected downsides of online marketplaces, citing high cleaning fees, difficult hosts, safety issues, and even discrimination, as reasons to return to established names they trust that give them the peace of mind and personal service they deserve.
All of this, combined with cost pressures including but not limited to the price of flights and hotel rooms, have made the value of the shared ownership model easier to measure and more compelling than ever. As people look to inflation-proof every aspect of their life, they are willing to pay upfront to lock in today’s rates for tomorrow’s travel by buying a vacation club. The financial benefits, along with the lifestyle freedom that such memberships can provide when used wisely, make them appealing in today’s blended travel, work-from-anywhere world.
Timeshare’s time to shine
So, in many ways, it seems that timeshare’s time has truly come. Since 2021 the segment has experienced strong year-on-year performance with big names like Disney, Hilton, Marriott, Holiday Inn and Wyndham representing about 80% of the sales worldwide. And we are continuously seeking opportunities for growth in new markets.
From China and Japan to Indonesia and Thailand, Asia remains a focus for expansion despite continued uncertainty and restrictions in some places, based on the sheer volume and economic impact that still make it attractive for businesses in every industry.
Realizing the region’s true potential, however, requires a mindful – if not artful – approach, as the building blocks for a thriving timeshare industry specifically are not yet set in stone. These range from setting up frameworks that both support sustainable businesses and protect consumers, to enforcing safe work environments with progressive attraction, development and incentive programs that truly empower frontline staff and entice them to stay, all of which will take time.
Truly understanding the local attitudes and appetites, and adapting your vacation ownership offering accordingly, is more than half the battle. For example, Asian travelers tend to seek value for money, caring about amenities and high-touch service more than “the comforts of home” like kitchens, or large spaces that appeal to American or Australian guests and which have typically been timeshare’s main drawcards. They also expect returns on their investments, and new ownership models in the region offer them beneficial interest in club assets.
In Japan, taking long holidays is less common, and short getaways domestically are the norm. Balancing cultural nuances like these while catering to tourists or club members from international markets becomes especially challenging. This, compounded by the pent-up demand post-Covid, make having a robust portfolio with ample inventory of various property types at exciting destinations key.
Power of partnerships
To achieve this, mixed-use resort development partnerships with club and hotel inventory have proven to be both practical and successful. This model presents numerous benefits for all parties – enhancing the end-to-end experience for guests while boosting yield and reducing risk for developers, owners and tenants alike. Hotel owners receive the backing of an international brand and a cooperative management style that provides promotional support, cost-sharing and continuous refurbishment to maintain high quality standards. F&B and retail outlets receive a more consistent flow of customers and revenues since occupancy rates in vacation ownership units average 86% or more year-round compared to an average 70% occupancy rate in APAC.
Whether across industries or within hospitality, I believe partnerships can fundamentally change the game for timeshare. To fully capture Asia’s golden market opportunity in the long run and sustain momentum in the next six to 18 months, however, we must build a high degree of trust at all levels across the ecosystem – from family units to government bodies. Balancing the natural impulse to rush to market with a high degree of integrity, a healthy sense of realism and a heartfelt respect for the local communities will help us minimize risk and make the most of this unique moment in time.
ABOUT THE EXPERT
Barry Robinson is president and managing director of international operations, Wyndham Destinations at Travel + Leisure Co, where he leads the company’s Asian expansion from Singapore