ARDA: only 32.9% of Timeshares are used by owners or their guests

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

ARDA Industry Fact Sheet

I have always felt strongly that timeshares were meant for exchanging and not using. Some have quoted that up to 70% of certain resorts are bought to use. And, the conventional wisdom that many on these boards offer is to buy where you will use.

Well, across all 1668 Resorts in the US in 2004, only 32.9% of units were occupied by owners or their guests. If you net out guests, which could have been renters, then the number is even lower.

Exchangers made up 33.4% occupancy. So, the average resort has as many exchangers and owners staying at the resort. Remember, some of these exchangers may actually be renters since I'll bet RCI and the resorts count their renters as exchanges.

Renters make up a surprising 12.3% of the occupany. Probably more given that a portion of exchangers and guests of owners are probably renters.

The occupancy rate of the average timeshare resort is 85.6%. I believe that this 14.6% vacancy rate is what allows timeshare exchange to work.

Relating this back to Resort Group theory, what should happen over time is owners will occupy a higher percentage over time since they will be booking their own units across multiple resorts. So, they are still opting to visit new places, but they will still own. And, the percentage of exchange will go down since rentals will continue to increase through resort group and private rental programs. Of course, that means that exchange share of resort occupancy will decrease. This will be a very easy way to determine whether or not Resort Group theory holds water. We will know in 5-10 years of watching this data.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Good logic, but it doesn't address the real reason for non-occupancy- it's low and mid season where demand is low. Not many people want to experience Maine coastal or Cape Cod in February and internal exchanges are not going to change that.

ARDA Industry Fact Sheet

...The occupancy rate of the average timeshare resort is 85.6%. I believe that this 14.6% vacancy rate is what allows timeshare exchange to work.

Relating this back to Resort Group theory, what should happen over time is owners will occupy a higher percentage over time since they will be booking their own units across multiple resorts.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Who prepared this ''fact'' sheet? Was it Raggatz and Associates, a wholly owned subsidiary of RCI?

This reminds me of a previous post purporting to represent numbers on some subject on ALL resorts in North America. When I talk to three or four resort managers and NONE of them got surveyed, I know that contention is nothing but crap. It would appear that whoever compiled the numbers probably took a sample and made a projection from that sample. An unreprentative sample would produce an unrepresentative result. Does this ''fact'' sheet have anything at all about the methodology of obtaining these purported ''facts''????

Compiling statistics like this, which most resorts don't exactly keep at their fingertips, is certainly something that would not slip the mind of a resort manager.

I suspect there are probably regional differences in the percent used by owners as opposed to the percent exchanged, but in a past thread someone with knowledge of an Orlando resort said their numbers were not far from those of the OBX.

[CaliDave Super Moderator Find all posts View Profile Close CaliDave]

I know the statistics for my resort.

99% occupancy from May - Sept
91% remainder of the year

24% of weeks are exchanged or not used by owners
4% are no shows
remaining are used or rented by owners or guests

89% of weeks during summer are used or rented by owners.

Being on the beach in So Cal .. I think my resort is an exception. We really don't have a big offseason. I think 90% would be considered pretty good year round for most resorts.

These are what I remember off the top of my head.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Who prepared this ''fact'' sheet? Was it Raggatz and Associates, a wholly owned subsidiary of RCI?

This reminds me of a previous post purporting to represent numbers on some subject on ALL resorts in North America. When I talk to three or four resort managers and NONE of them got surveyed, I know that contention is nothing but crap. It would appear that whoever compiled the numbers probably took a sample and made a projection from that sample. An unreprentative sample would produce an unrepresentative result. Does this ''fact'' sheet have anything at all about the methodology of obtaining these purported ''facts''????

Compiling statistics like this, which most resorts don't exactly keep at their fingertips, is certainly something that would not slip the mind of a resort manager.

I suspect there are probably regional differences in the percent used by owners as opposed to the percent exchanged, but in a past thread someone with knowledge of an Orlando resort said their numbers were not far from those of the OBX.

It's funny how you only agree with facts that support your assertions and you challenge the veracity of others. I am going to buy the report to find out what it says.

This data was published on the ARDA website.

Here is the source of the data:

State of the US Timeshare Industry, 2005 Editions
Published and sponsored by ARDA and the ARDA International Foundation, 2005. Conducted by American Economics Group. Executive Summary: Members $25; Non-members $50. Full report: Members $100; Non-members $200.

This report presents data and estimates regarding a number of key characteristics of the vacation ownership industry in the United States. Characteristics described in this report include the number and location of resorts, number of units, resort occupancy, average week prices, average maintenance fees, number of weeks owned, number of owners and more.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Since this report includes both data and estimates, and all resorts were not surveyed, it is clear that the numbers cited are estimates rather than data. The only question is what methodology they used, particularly how they composed their sample. It will be interesting to see what the report says.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Except for the period between Thanksgiving and the beginning of Spring Break (not including Christmas and New Years), your resort's number seem relatively close to those of the resorts I am familiar with on the OBX.

I know the statistics for my resort.

99% occupancy from May - Sept
91% remainder of the year

24% of weeks are exchanged or not used by owners
4% are no shows
remaining are used or rented by owners or guests

89% of weeks during summer are used or rented by owners.

Being on the beach in So Cal .. I think my resort is an exception. We really don't have a big offseason. I think 90% would be considered pretty good year round for most resorts.

These are what I remember off the top of my head.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

How did they get their data?

I have some doubt on it. On the same page, this is their finding on 2003

Purchase Motivation: Why Consumers Buy Timeshare**

Flexibility (including location, unit size & season)
Opportunity to exchange into other resort locations
Certainty of quality accommodations
Credibility of the timeshare company

I will think they use a sample pool, and their data is from mini-system group, I doubt if they really get all the data from each resorts.


Jya-Ning

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

I think only this data is trustworthy

US Industry Snapshot (2004)*

1,668 resorts located in 47 States
Average size of a timeshare resort is 94.4 units
2004 sales volume - $7.87 billion
Average price of a timeshare week/points equivalent - $15,789
3.9 million U.S. households own timeshare
5.8 million U.S. timeshare weeks owned

States With Most Timeshare Resorts
State Resorts % of Total
Florida 376 22.7%
South Carolina 130 7.8%
California 126 7.5%
Hawaii 91 5.5%
Colorado 90 5.4%


Even assume the exchange / owner usage percentage is right, it means the whole exchange companies can get no more than 50% of the available units, and that is 2.9 M U.S. timeshare weeks. Or about 58,000 units all years. or like 580 hotels total. And USA has most TS around. I believe Comfort Inn has over 4,000 hotels around.

Jya-Ning

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

At formerly Embassy Po`ipu, 40% of intervals are used for exchange. At the time that number was provided, the resort was about 90% sold out.

[Bill4728 Super Moderator Find all posts View Profile Close Bill4728]

States With Most Timeshare Resorts
State Resorts % of Total
Florida 376 22.7%
South Carolina 130 7.8%
California 126 7.5%
Hawaii 91 5.5%
Colorado 90 5.4%

Our TS databse only has 119 S. Carolina resorts. Where are the other resorts?

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I have some doubt on it. On the same page, this is their finding on 2003

Purchase Motivation: Why Consumers Buy Timeshare**

Flexibility (including location, unit size & season)
Opportunity to exchange into other resort locations
Certainty of quality accommodations
Credibility of the timeshare company

I will think they use a sample pool, and their data is from mini-system group, I doubt if they really get all the data from each resorts.


Jya-Ning

Jya-Ning,

Notice the **, there is a footnote that describes the data source. It is different than the one that I cited.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

US Industry Snapshot (2004)*

1,668 resorts located in 47 States
Average size of a timeshare resort is 94.4 units
2004 sales volume - $7.87 billion
Average price of a timeshare week/points equivalent - $15,789
3.9 million U.S. households own timeshare
5.8 million U.S. timeshare weeks owned

States With Most Timeshare Resorts
State Resorts % of Total
Florida 376 22.7%
South Carolina 130 7.8%
California 126 7.5%
Hawaii 91 5.5%
Colorado 90 5.4%


Even assume the exchange / owner usage percentage is right, it means the whole exchange companies can get no more than 50% of the available units, and that is 2.9 M U.S. timeshare weeks. Or about 58,000 units all years. or like 580 hotels total. And USA has most TS around. I believe Comfort Inn has over 4,000 hotels around.

Jya-Ning

Exactly! The fact you point out demonstrates that timesharing exchange is very tiny relative to the hotel rental market.

My claim has always been that

a) once a family stays in a timeshare on vacation, they will overwhelmingly prefer the timeshare to a hotel room.

b) timeshare rentals will be a product substitute for hotel rooms.

c) dumping cheap timesharing rentals will never be able to soak up all the available demand for hotel rentals in given areas, so it will NOT have any noticable impact to accommodation rental rates.

d) the natural result of such cheap timeshare rentals will serve to educate more consumers to the benefits of timesharing, not destroy it. It will therefore expand the timesharing market, not reduce it. Especially since those guests will not believe that the firesale rates will continue, but they know that they will be vacationing in the future.

In addition, if timeshare units are product substitute for a much larger hotel market, then branded hotels have an intrinsic advantage in converting those hotel users into timesharers with the right resort group product. That is what is driving their growth.