Chapter 8
The Uniqueness of Timeshare
Resort Operations
Explain the major differences in the
way traditional resorts/hotels and
condominiums operate with
respect to the role of:
Guest/Owner Characteristics
Marketing
Reservations
The Front Office
Housekeeping
Maintenance and Engineering
Accounting and Finance
Guest/Owner Characteristics
The target market for timeshare ownership is the growing
masses of middle-aged baby boomers who want the
advantages of owning a resort property without the
headaches.
People purchase timeshares for one or more of four
reasons:
– Flexibility over when, where, and how they vacation.
– Economics—Owners report they save money over the
long term.
– Certainty about the availability and quality of popular
resorts.
– Safety and secure environments for family vacations.
Guest/Owner Characteristics
(cont.)
Owners give three reasons as to why they
hesitated before buying.
– financial
– concern about using the timeshare enough to justify
the expense of the purchase
– the resort experience will not meet the expectations
created during the sales presentation
Two areas of concern to owners are the actions
of their homeowners’ association and their
annual maintenance fees.
Guest/Owner Characteristics
(cont.)
In terms of activities, skiing, golf, sightseeing
and beach/waterfront activities are more
important to timeshare owners while
entertainment, shopping and dining are
more important to hotel guests.
Marketing
Resorts offer timeshares in a variety of formats.
Over 90 percent sell interval interests in
increments of one week of use each year or as
points offerings.
The standard type of ownership is the deeded
week, offered by almost 90 percent of resorts.
Marketing (cont.)
The way timeshares are marketed depends on the
motivation of the potential investor/guest.
– Home from home occasions
– Swapper occasions
– Activity occasions
– Family holiday occasions
The most popular marketing programs for selling
timeshare products are referrals in-house guests,
telemarketing and direct mail.
Reservations and Front Desk
Front office procedures at whole and interval ownership
resorts have much in common with those at traditional
resorts.
Reservations at a traditional resort might come in via a tollfree number or direct calls from prospective guests while,
at interval ownership resorts, they can also come from an
exchange company or a vacation club.
Reservations and Front Desk
(cont.)
In a traditional resort, the number of rooms
available for rent is determined by management
while, in a vacation ownership resort, the number
of units available is determined by the number of
owners who want to rent or exchange their units.
The person reserving the unit may own a specific
unit, own the right to stay in an unspecified unit, be
the guest of an owner, or “just” be a regular tourist
looking to stay at a resort.
Reservations and Front Desk
Employees who take reservations at vacation ownership
resorts have a much more complicated task than do their
counterparts at traditional resorts, which feature few room
types.
Some resorts have separate check-in facilities for owners.
Work patterns at interval ownership resorts differ from
those at both whole ownership or traditional resorts. At the
former, guests check in and out on turnover days.
Housekeeping
The principal differences are in:
Size and Location of Units:
– Most vacation ownership units have two bedrooms
and two full baths and can sleep up to six people.
– Public spaces in a vacation ownership resort can
include hospitality areas consisting of a check-in
desk, concierge desk, and cashier, game rooms,
restaurants, and stores.
– The lobby must be able to accommodate large
numbers of people and luggage during weekly arrival
and departure times.
Housekeeping (cont.)
Size and location of units:
– The outdoor landscape is important to creating an
ambience that enhances the overall experience of the
guest.
– While a standard room can be cleaned in 30 minutes,
it may take up to 90 minutes to clean a condominium
unit.
– The problem is not just the size but also the
complexity of the cleaning task.
– While hotel rooms are located in an enclosed
building, condominium units in a resort may be
spread over several acres.
Housekeeping (cont.)
Arrival and Departure Patterns
– In a traditional hotel, guests come and go during the
week. In a vacation ownership resort, most guests
arrive and depart on the same day. All units in the
property have to be cleaned in a matter of hours.
Staffing Patterns
– Many housekeepers are needed—but for only one
day a week.
Owner Relations
– Some owners develop strong feelings toward the
person taking care of their unit and want assurance
that that individual will always handle their unit.
Maintenance and Engineering
Because of the interest and involvement of owners, there is
more pressure on the maintenance department of a
vacation ownership resort compared to a traditional
property.
Because units are not standardized, it is difficult to specify
the same bedding, seating arrangements, and decor for
each.
In ownership condominiums, the maintenance function is
often run as a break-even proposition.
A system has to be set up to ensure that all work is
properly billed.
Accounting and Finance
Seventy percent of all timeshares are financed internally
with down payments ranging anywhere from 10 to 30
percent and the remainder financed with an interest rate
much higher than if financed through a bank.
Timeshares generate returns of more than 20 percent.
Developers not make money from timeshare sales they
also generate revenue from interest they receive on five- to
seven-year loans they make to timeshare buyers.
Timeshare developments generate revenue after the
development is complete through timeshare management.
Accounting and Finance (cont.)
On turnover day, all units have to be cleaned in a
matter of hours.
Interval and whole ownership resorts rarely
overbook. Advance deposits and full payment on
arrival are common.
Key control can be a problem at interval resorts.
Large whole ownership resorts have a separate
department dedicated to owner relations.
Accounting and Finance (cont.)
Ownership properties have different accounting
needs compared to traditional hotels.
The essence of condominium and timeshare
management is about revenue sharing rather than
merely adding up posted numbers. Owners
expect to receive the correct amount of rental pool
income from their units on a monthly basis since
they are paid based on a formula based on the
percentage of their possession in the timeshare
agreement.
Accounting and Finance (cont.)
While hotels keep two types of accounting records
– one for guests in the form of guest accounts or
folios – and one for business, condominium
resorts need three sets of records:
– Guest (unit-renter) accounts for each guest
– Owner accounts are unique to resort
condominiums
– Owners association accounts are used to
prepare budgets and financial statements for
the owners association
The End!