How to Turn Payments into a Competitive Advantage in the Vacation Ownership Industry

Insights for this month’s article are provided by Liam Walsh, VP Travel, Flywire and John Willman, Treasurer and Senior VP of Mortgage Services.

Question: How can companies transform payments from a pain point into a competitive advantage in the vacation ownership industry?

Flywire’s VP of Travel, Liam Walsh, knows that timeshare owners increasingly prioritize technology in their vacation ownership experience. Wifi availability, for instance, is on par with having access to restaurants for 2,500 timeshare owners recently surveyed by ARDA. They also say that the quality of technology in a timeshare unit matters as much as the room layout, and is more important than anything else – including the number of bedrooms, kitchen appliances, bathrooms and kitchen size.

For companies, this means that innovating with technology is important to attracting and retaining timeshare owners from the U.S. and abroad. While most operators understand this, there is one area they are overlooking that presents a competitive advantage – creating parity between domestic and cross-border payment processes.

International vacation ownership is steadily increasing. A full 13% of operators surveyed by ARDA in 2023 said their owners live outside of the United States. Four years earlier, that same survey pegged international ownership at 11%. Plus, small changes bring outsized improvements to international owners and operators, who are not worrying about or chasing late, missing, or short payments.

So, how can operators make the payment experience for mortgage/loan, maintenance and dues payments feel the same whether owners are within driving distance of their timeshare or a 13-hour plane ride away? Walsh shares a few insights below:

The payment experience for international timeshare owners must improve

Because they are most often billed in USD, the onus is on the timeshare owner to figure out FX conversion and the most cost-effective payment method. They often lack good options: paying by wire is manual and slow, paying with an in-country card adds fees, and foreign exchange adds cost for each. For the operator on the other side of that transaction, things are not much better. Most timeshare operators are maintaining separate relationships with multiple card acquirers and banks, thinking it is the only way to accept payments in a secure and compliant way. Without a single integration point into the system of record, they must track payments and payment data from multiple sources. That wastes time because they are left to manually match payments to the right invoices and/or chase down payments that are late or short due to FX.

How are operators reducing the friction from the process of getting paid?

For one premiere, decades-old timeshare resort operator, where roughly 10% of owners/members are international, small changes can go a long way to improve the international ownership experience. Having the ability to invoice in USD allows owners to see what they owe in their home currency. They can pay online, have lower FX fees, can track their payments and have peace of mind they have been delivered. For the operator, automation and transparency improves efficiency and cash flow. A sophisticated automation and data-rich payment reporting streamline that is integrated with the timeshare operator’s system of record, is crucial for success.

Enable a consistent experience for domestic and international owners

88% of travel providers in a survey commissioned by Flywire said they think their customers experience some pain when it comes to paying. That is not surprising, given that 68% said they have not fully digitized their payment experiences.

For timeshare members and owners, Flywire provides a simple way to pay. Flywire integrates with existing systems and automates payment status updates. This cutting-edge payment technology gives global owners access to the most relevant payment methods in their local currency and payment method. Learn more here.

John Willman, Mortgage Accounting Treasurer and Senior VP of Mortgage Services at Westgate Resorts, also recognizes the opportunities for improvement in the payment space.

In the vacation ownership industry, processing international or “cross-border” payments can be complex and challenging for both companies and customers. Additionally, processing fees are higher than domestic payments due to risk and additional fees from providers. This complexity stems from the high-value nature of transactions, frequent international payments, currency conversion issues, and varying legal and financial regulations across countries. This is a challenge for Timeshare Developers, HOAs and their Management companies. However, rather than viewing payments as a pain point, these various companies can transform this critical function into a competitive advantage by leveraging specialized payment platforms.

Streamlining Cross-Border Payments

Processing payments from buyers who reside in different countries leads to issues related to currency exchange, banking and credit card fees, and international transfer delays. A third-party company can help eliminate these barriers by offering payment solutions, which are specific to the buyer’s home country. This enables customers to pay in their local currencies, reducing conversion costs to both the timeshare owner and the company collecting the payment and providing transparency on exchange rates.

Enhancing Customer Experience with Flexible Payment Options

Another way companies can gain a competitive edge is by offering flexible payment options. Vacation ownership customers, who often make large financial commitments, value the ability to choose how and when to pay. Using sophisticated technology that supports various payment methods, from credit cards and bank transfers to digital wallets and alternative payment platforms, gives customers the flexibility to select their preferred method. This flexibility not only accommodates a wider range of customer preferences but also makes the payment process more convenient and efficient, while also reducing costs for companies.

Ensuring Compliance and Security

The vacation ownership industry is subject to many legal and regulatory requirements, particularly when it comes to financial transactions. It’s important that companies navigate this complex landscape by ensuring compliance with international payment regulations, including meeting strict security standards, protecting sensitive customer data and preventing fraud. This not only minimizes the risk of financial loss but also builds trust with customers, as they are assured their payments are secure and compliant with legal requirements.

Gaining Data Insights and Improving Efficiency

Finally, companies must have real-time tracking and reporting, allowing them to monitor payments, identify trends, and optimize their payment processes. This data can be leveraged to make informed business decisions, such as identifying popular payment methods or understanding seasonal trends. By improving payment efficiency, companies can reduce overhead costs, enhance cash flow management, and improve overall financial health.

In an industry where customer experience is paramount, streamlining payments and giving customers choice, while reducing processing costs can be a key differentiator that drives long-term success.