Home Sweet Time Share
Vacation retreats go upscale as hotel chains cash in on their growing popularity
Further cleansing the time-share image has been the participation of marquee hotel chains like Hilton and Marriott. The latter was the first to jump into the game back in 1984. Not only did their presence lend the reputation of established brand names, but it also provided more stable financing for new developments. "The hotel companies have really changed the face of time shares away from the high-pressure sales tactic," says Joseph Greff, a lodging analyst with Bear Stearns. Today, the big three hospitality companies in the time-share industry, Marriott, Hilton, and Starwood, account for a third of all domestic sales.
So far, the hotel chains' foray into time shares and their fractional cousins has proved a reliable source of income. "This is about capturing the customer for a lifetime," says Raymond Gellein, CEO of Starwood Vacation Ownership. "It's a huge brand-extension strategy." Internal surveys at Marriott point to the same conclusion: Those who own a time share with the company are more likely to be repeat customers at its hotels.
Stable flexibility. Perhaps most important, the time-share segment seems to be immune to the roller-coaster ups and downs of the general hospitality industry. While hotel occupancy dropped dramatically after 9/11 and took the next two years to fully recover, time-share occupancy slumped for only two months before hitting previous marks. Last year, occupancy rates at time-share properties hit nearly 85 percent.
All this is good news for potential time-share owners, too. Hotel brands have helped introduce new options. "In the early days, it was commonplace to sell a fixed week in a fixed unit," says Stephen Weisz, president of Marriott Vacation Club International. "An owner would buy the third week in June at unit No. 7." Now, prospective buyers can choose from an array of choices, depending on where they want to vacation, how long they'd like to stay, and how much they have to spend. Those with six-figure incomes and up can opt for the superluxurious fractional model, which typically allows owners longer stays at exclusive properties. Run by operators like the Four Seasons and Ritz-Carlton, which started offering fractionals in 1999, these properties tout features like heated marble floors, plasma TV s, and concierge services. Many fractionals will even stock up on groceries or take the skis out of storage, all before an owner arrives for vacation.
Even the basic time share has diversified, offering owners more-creative ways to get the most out of their reserved weeks. Many time-share operators now allow owners to split weeklong stays among more than one property, make use of a smaller property for a longer period of time, or trade their time shares for use of properties across the world.
Robert Osborne and his wife bought their first time share from Marriott 15 years ago in Palm Springs, Calif. The couple typically stuck with the unit they purchased, finding it difficult to trade for weeks in other locations. Today, using improved trading systems, the Osbornes frequently head off to other destinations. The couple, who have since bought additional time shares with Starwood and Marriott, have found that the increased availability of time shares has broadened their horizons. "As soon as a new property opens up, we're thinking: Should we go there?" says Robert Osborne, 65, a retired naval officer. They have traveled through Europe and Mexico, all by using their time-share weeks.
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