Predictions for the Future of Timeshare

Insights for this month’s article provided by John Staten, President and Chief Executive Officer at Holiday Inn Club Vacations Incorporated and Jared Saft, Chief Business Officer at Westgate Resorts

Question: What will the industry look like in 5-10 years (e.g., products, players, etc.) and how does the industry keep evolving to meet the needs of consumers?

In the last several years, the vacation ownership industry has undergone numerous evolutions to meet the needs and desires of travelers. As we look ahead to the future of the industry, leaders are weighing in on how it will continue to evolve and what catalysts will prompt change over the next decade.

John Staten, President and Chief Executive Officer at Holiday Inn Club Vacations, shares his predictions about the future of the industry below:  

• The industry will keep growing at a healthy pace and keep attracting younger customers. This sector has a track record of growing by double digits following major economic upheavals (i.e., the 2008 financial crisis, or the pandemic), and it is expected to continue doing so. A large part of this growth is coming from younger vacationers who are prioritizing flexibility and experiences over other considerations. At Holiday Inn Club Vacations, we’re responding to these changing preferences in a variety of ways. One example of our efforts is the addition of the new, single-family residences to our portfolio in 2024. These expansive suites can sleep up to 20 members of a family, which we hope will encourage multigenerational travel while still providing all the comforts of home. 
• The recent trend of consolidation will continue unabated, and there will be a bigger gap between branded and non-branded companies. Larger and branded providers have a natural advantage in providing access to a diverse set of vacation options.  While greenfield developments will still play an important role in enhancing the appeal of the portfolio (Holiday Inn Club Vacations is currently investing in several greenfield opportunities in some of the top vacation spots in North America), there is indisputable momentum behind consolidation.Additionally, over the next 10 years, we can expect to see the lines blur between traditional master hotel brands and vacation ownership brands. This may spur further consolidation in the hospitality sector, as some of the brands that spun out their vacation ownership businesses may look to reconsolidate in order to extend their networks and product offerings.
• Customer Experience (CX) will be a key differentiator. Not surprisingly, today’s customers want to engage with providers on their own terms. Customers expect their experience to be seamless, and self-service is not only preferred, but expected. This is why Holiday Inn Club Vacations has made customer centricity a cornerstone of our strategy, and, as a result, why we have been recognized for stellar customer service by J. D. Power two years in a row.  CX will also become more focused on the entire experience, not just the in-room or resort experience. Companies that refuse to accept this new reality may find themselves out of business or irrelevant in the coming years.       To quote our founder, Kemmons Wilson, “You cannot procrastinate. In two days tomorrow will be yesterday.” We take his words to heart, and at Holiday Inn Club Vacations, our commitment to innovation and adaptability reflects our dedication to providing a fresh, engaging, and relevant experience for both existing and future members.

Several of these themes are echoed by Jared, Saft, Chief Business Officer at Westgate Resorts, who believes that the only constant in the vacation ownership industry is change – change in the type of ownership products sold, change in the number of companies operating in the space, and change in the quality of the products member companies have provided to our owners. More from Jared is below:

Finally, the product structure itself is evolving. ARDA has led the way on developing the regulatory and tax framework necessary to explore alternative forms of ownership structure. From short term products, to membership and subscription clubs, member companies have begun to explore variants to the existing product mix – an experiment that will only grow over the next decade.That evolution will likely mean the sales and exploration process will soon not only match a prospective owner with a desired location, but will also match them with the right product type. Some owners may be comfortable with a deed in perpetuity, while others might prefer to see a product that has more flexibility in its terminability or something that allows them to weave in and out of ownership.Whatever new owners’ desires might be, tomorrow’s industry will have the right vacation options available.

As John mentioned, consolidation will continue as a theme both between developers and management companies as well as industry service providers. If you examine the history of business, all industries go through a similar life cycle of entrepreneurship, explosive expansion and mature consolidation as products and players get refined.Consolidation is a sign of a healthy industry moving capital efficiently. It brings consistency of service delivery and ubiquity of quality, both of which I believe will be major themes that continue to playout over the next five to ten years and will lead to higher owner satisfaction rates.  While the number of operators in the industry may be smaller ten years from now, the base of owners, the satisfaction rate and the quality of the resorts will continue to grow.

The nature of the resort experience will evolve. When timeshare began in the 1980’s, most products consisted of a condo and a pool for an owner to stay in while they were at the beach or visiting a theme park. In a way, the resort experience was incidental to the experience offered by the location the owner was visiting. But, the evolution of the product will continue as new timeshare resorts morph into experience-based destinations, with activities programs and amenities that rival any vacation option available.While it was once foreign to imagine visiting Orlando only to spend a week exclusively at the resort, today’s timeshares offer enough experiences, amenities, food & beverage and activities to keep owners engaged without ever feeling the need to leave the property. The growth of that experience will continue to drive owner satisfaction and reinforce the value proposition.Additionally, we will see more urban timeshare destinations as the nature of what we offer continues to change to meet consumer desire.