US Timeshare Industry Continues Strong Growth with 2005 Sales of 8.6 Billion

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

from ARDA.

The US owners
2006 (Jan) - 4.1 million, 2005 - 3.87 million, 2004 - 3.4 million, 2003 - 3 million

The industrial sale
2006 - 8.6 B, 2005 - 8 B, 2004 - 6 B, 2000 is a little over 4 B. Growth rate over 12%

Total units
2006 - 154,439, of them 22,424 is newly added in 2005 and 23,578 will be expected to add in 2006

The average price of a timeshare interval or points equivalent in 2005 was $16,278, an increase from $15,789 in 2005.

Sale growth 9%, Owner growth 6%. Unit growth 14%. interval price growth 3%.

Interval price growth is less than the real estate growth. Unit growth more than owner growth.

By the way, the Nov 1- 3 2006 ARDA fall conference has all Nov 2 Afternoon discuss Resale Market.

Jya-Ning

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

That's good news........I have been hearing about a bunch of people that have purchased timeshares this year.

Every time I am at a party, or gathering, I find out someone else has purchased one. Just a month ago, there were two couples out of 10, that had recently bought their first timeshare. One bought at The Manhattan Club, the other bought in Hawaii. Don't remember the name of the resort.

[Steamboat Bill Banned Find all posts View Profile Close Steamboat Bill]

Is there a breakdow of $ sold per TS company so we can see who the "playars" are?

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

Is there a breakdow of $ sold per TS company so we can see who the "playars" are?

Not in this report. However, if you look at the Wyndham presenation for investor from this thread when they split from Cedant, it lists the following competitors on their VOI (or TS) branch based on their size in the US I guess (pp 36). They are

Wyndham (WYN)
Marriott (MAR)
Starwood (HOT)
Bluegreen (BXG)
Hilton (HLT)

Together, they have about 40,000 units and 1,542,000 Owner (but I am pretty sure Marriott has EU units, so don't know how to interepret it to US only). I have no idea if they pick the right one or not.

That is before Wyndham bought PAHIO.

So you can use the links to look at Yahoo's Finance about their seperate Sec Filing for "Quarterly Report" or "Results of Operations and Financial Condition, Financial Statemen" or "Annual Report" for each one. I am sure they are very close to the general trend.

Jya-Ning

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

Thanks for the info. It would be most interesting to get a some breakdowns on those numbers.

Items that pique my curiosity include:

• The percentage of those sales are in mini-systems or resort gropus vs individual resorts.
• Within the mini's, the breakdown between points-based minis and "conventional" week minis.
• For individual resorts, the percentage of units sold with an attached points program.

I think it would also be interesting to see that info based on both number of units and sales revenue.

I suspect strongly that if we could "lift the curtain", we would find that most of the growth embedded in the figures cited by Jya-Ning is in points-based mini-systems. For high-end sales, I suspect that the breakdown would skew even more strongly toward the points-based minis.

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

The AIF annual benchmark study by PricewaterhouseCoopers

from timesharebeat
or ARDA International Foundation (AIF)

The study, which focused on an industry subset of 46 companies encompassing 293 timeshare resorts in active sales, which compose Companies with resorts that reported 100 or more new sales during 2005
...
The study participants included eight publicly traded companies, or subsidiaries of publicly traded companies, which accounted for 72 percent of net sales reported, and 38 privately owned companies.

This year’s findings reveal a 9.1 percent year-over-year increase in net sales of timeshare resorts in active sales. Half of respondents sold more than 2,500 timeshare weeks during 2005, with the largest companies experiencing the most rapid growth (11.8 percent increase in net new sales).

The weighted average price of a timeshare interval, or week, sold during 2005 was $17,797, reflecting an increase of 3.8 percent over 2004 prices.

Of the $6.1 billion of net new timeshare sales (based on 46 companies, total timeshare sales climbed nine percent during 2005 to $8.6 billion) in 2005 (excluding fractional sales), $5.1 billion (84 percent) was classified as interval week sales, while $1 billion (16 percent) was classified as points sales.

Study results reflect the continued importance of financing provided to consumers at the point of sale. Companies reported financing 72.9 percent of the dollar value of timeshare sales in 2005, compared to 69.7 percent in 2004. The remainder of the sales was cash or cash-out within the first 90 days. The average interest rate on new consumer loans in both 2004 and 2005 was 13.9 percent, and companies reported receiving average down-payments equal to 14.9 percent of the contract price.

8% of these companies are outside of USA

Don't know how these companies see the selling weeks as point base or week based. And don't know the ratio of point based interval vs week based interval, so very hard to guess the growth rate.

However based on the 1st study the sales is around 1 B (less than) at 1985 and around 4 B (over) at 2000. The growth rate will be around 10%, and that period should be most fix or week unit. I would think the growth rate between point and week should be somehow similar with points a bit higher.

Jya-Ning

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

$5.1 billion (84 percent) was classified as interval week sales, while $1 billion (16 percent) was classified as points sales.

This number seems odd. Of the 5 big companies list by Wyndham, I believe all except Marriott is selling points. Since top 8 companies sell for 72%, I will assume it should at least contribute 40% of the sales. So it should be over to 3B in point sale. Even if you only count Wyndham and Bluegreen as the only point resort in the top 5, it should still over 1.5B sale.

For 2005, 72.9% sales are through financial. and the rate is 13.9%. the values is $17,797. Or for the 1st year, the room charge based on finacial interest along will be $1,800. Ouch

Jya-Ning

[BoardGirl Senior Member Find all posts View Profile Close BoardGirl]

Yeah, my eyes popped out of my head at the avg of near $18k for ONE WEEK financed at 13.9!! HOLY CRAP! Hard to believe anyone would accept an interest rate like that, and on such a big purchase.

Next stat I'd like is how many of the people that bought the avg week at the avg interest rate kept their week, but never used it in any way (didn't deposit, didn't rent, just didn't do anything with it). I guess I'm trying to find someone guilty of pissing away money. Then begging them to adopt me.

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

from timesharebeat
or ARDA International Foundation (AIF)



Don't know how these companies see the selling weeks as point base or week based. And don't know the ratio of point based interval vs week based interval, so very hard to guess the growth rate.

However based on the 1st study the sales is around 1 B (less than) at 1985 and around 4 B (over) at 2000. The growth rate will be around 10%, and that period should be most fix or week unit. I would think the growth rate between point and week should be somehow similar with points a bit higher.

Jya-Ning

I didn't think any breakdown would be available as I mentioned. I was just mentally thinking what information I would like to have if it were available.

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

Next stat I'd like is how many of the people that bought the avg week at the avg interest rate kept their week, but never used it in any way (didn't deposit, didn't rent, just didn't do anything with it). I guess I'm trying to find someone guilty of pissing away money. Then begging them to adopt me.

Don't think there will be such stat However, you can find occupancy statistic. It usually around 85%. Last year, it went to 90%. Probably make some guess like assume the unoccupant is evenly distributed or they are all the people that borrow the money to start with.

Based on these occupancy report, in 2005, the average timeshare visitor party spends $1,334 per timeshare vacation. And that probably includes MF, entertainment, travel, meal. Or assume 1/3 expense is MF + exchange cost ($450), $1,800 is way too much.

Jya-Ning

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

I didn't think any breakdown would be available as I mentioned. I was just mentally thinking what information I would like to have if it were available.

I don't expect to see any report to have the break down as you mentioned, although it does sounds a good break down. I will guess ARDA probably will have that. But it probably will cost few dollars to get, and probably will hidden in one of their reports. This report happen to come out, and together with the public company's SEC finacial report, it probably can help avg Joe to guess better.

For fun, I will do a pure guess

The percentage of those sales are in mini-systems or resort gropus vs individual resorts.

Based on the 2nd report (which cover 6.1 B of all 8.6 B sales)

The study participants included eight publicly traded companies, or subsidiaries of publicly traded companies, which accounted for 72 percent of net sales reported, and 38 privately owned companies.
and
This year’s findings reveal a 9.1 percent year-over-year increase in net sales of timeshare resorts in active sales. Half of respondents sold more than 2,500 timeshare weeks during 2005, with the largest companies experiencing the most rapid growth (11.8 percent increase in net new sales).

I will guess all public traded companies will be in mini system. But the unidentified company will not be mini-system. Some private own company may also has mini- system (like silverleaf), so mini system has at least 72% of 6.1B or their sales are over 4.3B or 50% of all sales.
and the largest companies will have 11.8% increase with total 9.1% increase. Or the mini will have aound 11% increase. And if they are 50% of all sales, the other non-mini only increase by 7% (probably because it is hard to find money to build new inventory). With real estate become hot in 2004, 2005, the trend will more likely be worse.

Within the mini's, the breakdown between points-based minis and "conventional" week minis.

Just WYN and BXG along is over 1.5 B from their financial report. I am not sure if Hilton or Starwood has mixed point and "conventional" week. If they don't, then these 4 companies will close to 3 B in sales. Which leave convention week mini somewhere 33% of all mini system sales.

For individual resorts, the percentage of units sold with an attached points program.

This one probably will have to look at RCI report. However, since the report put only 1 B in point sale, I will assume the point sale they put is the RCI point week, if that is the case, it is 1B / 6.1B or 16% of all sales.

Just for fun

Jya-Ning

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

Starwood 3Q 2006

Starwood reports its 3Q 2006 yesterday.

Excluding residential sales, contract sales at vacation ownership properties increased 13.5% when compared to 2005. Reported revenues from vacation ownership and residential sales increased $22 million when compared to 2005. Strong increases in revenues from vacation ownership sales were partially offset by a decline in residential sales.

However, seems like their overall 2007 does not seems to be a good year.

Jya-Ning

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

Not really. A trip to the caribbean can cost up to $ 1,500 per party (of 2) just for transportation. I don't think I've ever gone to Mexico for a week where it cost me less than $ 1,800 for 2 and that's why I now only go for a minimum of 2 weeks. If you look at some of the all-inclusive rates, they might show well above the average amount spent per week per party. Of course taking a bunch of kids to Orlando could really break the bank.

Based on these occupancy report, in 2005, the average timeshare visitor party spends $1,334 per timeshare vacation. And that probably includes MF, entertainment, travel, meal. Or assume 1/3 expense is MF + exchange cost ($450), $1,800 is way too much.

Jya-Ning

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

Of course taking a bunch of kids to Orlando could really break the bank.

I know that feeling I don't know how ADRA come out that $1,334 number. $1,800 is just a guess of a person if finance TS through developer, that is what they will pay in interest. I assume $1,334 is the total cost, so it includes lodge, entertainment, travel. I still can not figure out that number, either that or I need to figure out why when I travel, I spend much more than than in avg. Maybe most people know some trick to get cheap ticket here and there.

Jya-Ning

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

WYN and Marriott 3rd Q

Revenue from time-share sales and services also fell 5 percent due to the timing of developments.

* Growth in the number of exchange members, vacation rental transactions
and average price per rental, helped to fuel a 10% increase in Vacation
Exchange and Rental revenue compared to the third quarter of 2005

* Continued growth of the Vacation Ownership business, with gross vacation
ownership interest ("VOI") sales increases of more than 20% compared to
the third quarter of 2005 driven by increases in tour flow and volume
per guest

When you look at Internet start to hit every family, you think it should change the TS industrial as whole, yet, it looks like the old selling method is still working
Jya-Ning