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2012 AIF World Wide Shared Vacation Ownership Study Reinforces Link Between Owning and Vacationing with Promising Signs for International Growth

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2012 AIF World Wide Shared Vacation Ownership Study Reinforces Link Between Owning and Vacationing with Promising Signs for International Growth 

By Darla Zanini & Lan Wang

July 31, 2012 

AIF Research

The ARDA International Foundation’s (AIF) newest research offers an insight into the international shared vacation ownership industry. Having data on the size of the industry, composition, and performance in regions around the world will be valuable information for our members as growth strategies and product innovations are developed.

With 5,300 resorts in 108 countries, we know that the industry has a significant footprint. But when we look more closely, we learn that global shared vacation ownership supported more than 1.1 million jobs and generated over $45 billion in direct economic outputnearly $114 billion when including indirect and induced impacts.  

The study surveyed owners in 24 different countries and found that nearly two percent of households (20 million owner households) own at least one timeshare product, and that 81 percent of owners vacationed in the past year. The global occupancy rate remained strong through the recession and on average trended near 76 percent, outpacing the worldwide hotel industry occupancy rates.

Our three-year analysis revealed impressive stability through a global financial crisis. Sales in 2010 held steady after a 27% drop in 2009. In some regions—particularly Asia, Central and South America, and Africa—sales volume actually increased from 2008-2010.

Resort locations and market representation should not come as a surprise. North American properties represent 46 percent of the total market, followed by Europe with 25 percent, Central and South America with 10 percent, Asia with 6 percent, the Caribbean with 5 percent, Africa with 4 percent, and Australasia (Australia, New Zealand, the island of New Guinea, and neighboring islands in the Pacific Ocean) with 2 percent.

The research also found that 80 percent of the properties outside the U.S. offer traditional interval weeks, 28 percent offer biennial products, 27 percent offer points-based products, 27 percent offer trial memberships, 16 percent offer fractional or Private Residence Club ownership products, and 9 percent offer triennial products.

Other findings include data about new ownership and market growth. Future generations of timeshare owners will likely expand to numerous countries, with particular emphasis on Brazil, Russia, India, and China where there is a growing middle class. The survey found that the global industry is diverse in its makeup, resilient, and our owners are optimistic about the industry’s future.  For more information, please visit the AIF Section of www.arda.org.

 

The Timeshare Industry Makes a Huge Impact

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The Timeshare Industry Makes a Huge Impact 

By Darla Zanini 

July 18, 2012 

AIF Research   

We just wrapped up our Economic Impact Study conducted by Ernst & Young, which looked how the timeshare industry impacted the economy in 2011. In a wordsignificantly! 

The industry contributed an estimated $70 billion in consumer and business spending to the national economy, which includes a total of 493,000 jobs with $23 billion in income. Our leadership at ARDA was very happy to see these numbers.  

As ARDA CEO Howard Nusbaum said, “We aren’t just bringing people a better way to vacation, we are making a serious bottom-line economic impact.” 

The impact of the timeshare industry on the U.S. economy extends beyond timeshare resorts, to include the economic impacts of sales and marketing offices, corporate operations, construction of new resorts, renovation of existing resorts, and the significant impact of expenditures of vacationers during timeshare stays. This study estimates the comprehensive private and public sector benefits generated by the timeshare industry. 

Combined direct, indirect, and fiscal impacts in 2011 included $70 billion in consumer and business spending, 493,000 full- and part-time jobs, $23 billion in salaries and wages, and $7.7 billion in tax revenue. There are over 194,200 units in 1,548 timeshare resorts in the United States, encompassing a significant portion of the U.S. hospitality industry. 

Spending by timeshare owners and guests during timeshare stays was estimated at $9.3 billion in 2011. About $1.5 billion was spent on-site at resorts, while $7.8 billion was spent off-site in the communities where the timeshare resorts are located. 

In addition to private-sector benefits, the timeshare industry contributes significantly more federal, state, and local tax revenue per employee than the average industry, totaling $7.7 billion in 2011.  

This reportalong with the recent reporting that the overall travel industry has been creating jobs 26 percent faster than the rest of the economy since March 2011*, creating 271,000 new jobs in that timegives us continued optimism about our industry. 

For a full copy of this study, please contact me at dzanini@arda.org. 

 

* U.S. Travel Association 

Capital Markets—They’re Back!

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Capital Markets—They’re Back! 

By Howard Nusbaum

July 10, 2012 

AIF Research 

It was just a couple of short years ago that seven of the ten dependable timeshare lenders withdrew from finance. It was a bleak scenario that many in our industry hoped would never happen.

Luckily, this year paints a brighter picture. ARDA’s International Foundation (AIF) has just released its latest Financial Performance study, and the numbers look very healthy. Here are a few facts from the study:

Hypothecation of receivables: The average interest rate and average advance rate increased when compared to 2010. The average interest rate increased by 0.3 percentage points from 5.6 percent to 5.9 percent. The average advance rate has increased 1.4 percentage points from 79.2 percent to 80.6 percent. Eighteen respondents provided information on hypothecations of receivables that occurred during 2011, totaling $693 million.  

Portfolio sales and securitizations: For respondents that reported securitizations in both 2010 and 2011, the average transaction size of securitizations and advanced rates increased, while average interest rates declined. The average transaction size of reported securitizations increased 5.1 percent from $245.0 million to $257.4 million. The average advance rate has increased 13.0 percentage points from 81.2 percent to 94.2 percent. The six separate securitization transactions reported by survey respondents in 2011 represented a total value of $1.4 billion, measured as the gross value of the sales contracts securitized.  

These stats indicate positive movement in our industry. As you know, the environment certainly has changed and I believe it’s for the better. New lenders have entered the financial marketplace, like Capital One. Some regional and local banks have gotten involved, too. And, of course, the security markets are once again providing financing to the vacation ownership industry’s largest developers on favorable terms. All of this is improving the environment and outlook.  

Timeshare buyers are paying larger down payments and have much higher FICO scores than five years ago. Timeshare receivables have also performed well throughout, and certainly much better than other classes of loans like credit card, auto, and student loans.

We are looking forward to this trend continuing and believe that it will. For more information on the study, please contact Darla Zanini at dzanini@arda.org.