VACATIONS Time-share resorts see a rise in sales
The industry is moving on to beaches as its next focus.
ST. PETERSBURG TIMES
NORTH REDINGTON BEACH, Fla. -- Jack Hogg spent $95,000 tying up the penthouse at the Grand Shores West Resort here for 13 weeks every winter.
His two-bedroom time-sharing unit has a sweeping view of the gulf, a wet bar, a chandelier hanging over the dining room table and a Jacuzzi tub.
"I've stayed at the Don Cesar and rented condos at Hilton Head, but nothing compares to this," said the 73-year-old Canadian insurance broker, who has spent 10 winters at the time share. "It's cheaper than a hotel room. I know exactly where I'm going when I leave Ottawa for Florida every winter. This feels like home."
Recession, terrorism and war may have sent the tourist industry reeling the past two years. But time-sharing resorts barely missed a beat. While the hotel business slumped, sales of time shares rose 14.5 percent to $5.5 billion in 2002, and unit sales volume increased 7 percent, according to the American Resort Development Association, the industry's trade group.
"We had some cancellations when the war began, but it quickly stabilized. We lost no sales," said John Burlingame, who heads Hyatt Vacation Ownership, which has eight resorts and is opening four more this year. "A few years ago people were ashamed to say they worked in time sharing. Now it's a viable part of the hotel business."
Cleaned up its act
Once the tawdry stepchild of the hospitality business, the time-sharing industry claims it has largely cleaned up its act since the hardball, frequently questionable sales tactics of the 1980s. While a time share usually proves an abysmal investment that's harder to ditch than a winter cold, the industry has found a loyal and growing audience. Together, major hotel companies control more than half the market. Marriott and Hyatt even mix time-share villas into some of their new conventional hotel resorts.
The hotel chains aren't just fearful of losing hotel regulars who switch to time share. They're salivating over estimates that only 5.3 percent of the time-share market has been tapped. The average buyer is 55 years old, an age 75 million baby boomers will reach in the next 20 years.
Florida has 27,600 time-sharing units, more than any other state. About 70 percent of them are in Orlando, where every hotel and shopping center seems to have someone swapping discounted theme park tickets to anyone willing to endure a sales pitch.
The worst of the high-pressure tactics disappeared when Florida law gave buyers a 10-day cooling-off period to cancel a sale. Now 40 percent of time-share buyers are already owners.
After concentrating on ski resorts and entertainment spots such as Orlando and Las Vegas, the industry is shifting to beaches.
Time sharing has morphed several times in its first 39 years. In the old days, complexes sold a deed to use a suite for the same week every year.
Now, most of them sell points loaded down with a bewildering set of fees, waiting lists and rules on cashing them in. Buyers can vacation at their "home resort" or at others owned by the same chain or pay still more fees to swap among 5,400 time-share resorts spread around the world through two big exchanges.
Originally conceived by Walt Disney Co.'s time-sharing unit, the points systems added flexibility. Now owners can split vacations into shorter trips taken any time of the year. They can stay in any price range. Some hotel chains convert time-sharing points into currency that can be spent in their hotels.
"You can even cash in points for airline tickets, cruises and other travel services," said Marianne Myers, president of American Vacation Resorts.
The big-name hotel chains are credited with leading the industry to ease off the hard sell. But potential buyers evidently think there's still room for improvement. According to one survey in 2002, about 23 percent of customers had a negative perception of the time-share industry before hearing a sales pitch. After a sales pitch, that rose to 40 percent.
"The industry is still not doing it right," said Richard Ragatz, the market researcher. "They need to be more subtle and not fall into the trap of pressure, pressure, pressure."