July 2010 Developments - 48

Research
T
he soon-to-be-published State of the Vacation Timeshare Industry: United States Study, 2010 edition, provides an overview of important summary information on the U.S. timeshare industry for the year 2009. The report focuses on three major areas of data for the timeshare industry, answering some important questions: Industry Overview—How many timeshare resorts are there, and how big are they? How many weekly (or points-equivalent) timeshare intervals are owned? How has the industry changed over time? Industry Health—How many timeshare intervals were sold, and for how much? How much do resorts charge annually for maintenance? What is the occupancy rate? Are certain segments of the industry faring better than others? Industry Outlook—How many units are planned for construction? What are recent growth trends, and what do they suggest for the near future in the industry? The primary data source for the results is a survey of timeshare resorts and management companies. Ernst & Young LLP conducted this survey on behalf of the ARDA International Foundation (AIF). Of the 1,548 timeshare resorts identified, 646 responded—a 42-percent response rate. Of these 646 responding resorts, 529 belong to a family of ten or more resorts, while 117 belong to a family of less than ten resorts.

Joe Callender

Latest AIF Release: 2010 State of the Industry
Figure 1: Industry Overview 2009
Number of resorts Number of units Average resort size Intervals owned 1,548 170,232 110 units 7.2 million

Figure 2: Industry Health 2009
Sales volume Intervals sold Average sales price Annual maintenance fees Occupancy rate
translates to an average price of $20,468 per interval. The average price actually represents a slight increase from 2008 because the industry mix of sales shifted toward the higher end in 2009. In 2008, 45% of responding resorts reported an average sales price of $20,000 or more; in 2009 that percentage increased to 60%. The occupancy rate at timeshare resorts for 2009 was about 80 percent. This compares to a 55 percent occupancy rate at U.S. hotels.1 Timeshare owners’ use of the product has not diminished significantly—an indication of the attractiveness of the product. Maintenance fees at timeshare resorts average $674 per interval annually. The average fees are $462 for intervals in studio units, $572 for intervals in onebedroom units, and $777 for intervals in two-bedroom-plus units. This does not include amounts collected for property taxes, special assessments, or contributions to reserves.
1 STR Trend Report, Smith Travel Research, April 2010.

$6.3 billion 306,188 $20,468 $674 per interval 79.70% Key Characteristics
Having a general picture of the overall industry’s size and health, the next step is to segment the resorts by important characteristics. These include resort size, sales volume, resort type, geographic region, and average sales price. The following observations emerged from that analysis: Smaller resorts have slightly higher average occupancy than large resorts—larger resorts have higher maintenance fees. Almost 96% of resorts had annual sales of less than $25 million—about 60% reported no sales volume. Average sales price tends to be higher at resorts with higher levels of sales volume. The most common resort type is the beach resort. Golf and theme park resorts tend to be the largest; island resorts are the most expensive and have the highest occupancy.

Overall Size & Health
There were 1,548 timeshare resorts nationwide as of year-end 2009; at these resorts, there are about 7.2 million weekly intervals owned. The average resort has about 110 units. The timeshare industry experienced a 35% decline in annual sales volume in 2009. Given the difficult economic environment experienced in all industries, this is not surprising. In 2009, timeshare developers sold approximately 306,200 intervals for a total of $6.3 billion, which 48

Developments • July 2010

July 2010 Developments

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