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Time share

  1. 1. The Uniqueness of TimeshareThe Uniqueness of Timeshare Resort OperationsResort Operations COMPILED BY, Sunil kumar
  2. 2. Explain the major differences in theExplain the major differences in the way traditional resorts/hotels andway traditional resorts/hotels and condominiums operate withcondominiums operate with respect to the role of:respect to the role of: Guest/Owner CharacteristicsGuest/Owner Characteristics MarketingMarketing ReservationsReservations The Front OfficeThe Front Office HousekeepingHousekeeping Maintenance and EngineeringMaintenance and Engineering Accounting and FinanceAccounting and Finance
  3. 3. Guest/Owner CharacteristicsGuest/Owner Characteristics The target market for timeshare ownership is the growingThe target market for timeshare ownership is the growing masses of middle-aged baby boomers who want themasses of middle-aged baby boomers who want the advantages of owning a resort property without theadvantages of owning a resort property without the headaches.headaches. People purchase timeshares for one or more of fourPeople purchase timeshares for one or more of four reasons:reasons: – Flexibility over when, where, and how they vacation.Flexibility over when, where, and how they vacation. – Economics—Owners report they save money over theEconomics—Owners report they save money over the long term.long term. – Certainty about the availability and quality of popularCertainty about the availability and quality of popular resorts.resorts. – Safety and secure environments for family vacations.Safety and secure environments for family vacations.
  4. 4. Guest/Owner CharacteristicsGuest/Owner Characteristics (cont.)(cont.) Owners give three reasons as to why theyOwners give three reasons as to why they hesitated before buying.hesitated before buying. – financialfinancial – concern about using the timeshare enough to justifyconcern about using the timeshare enough to justify the expense of the purchasethe expense of the purchase – the resort experience will not meet the expectationsthe resort experience will not meet the expectations created during the sales presentationcreated during the sales presentation Two areas of concern to owners are the actionsTwo areas of concern to owners are the actions of their homeowners’ association and theirof their homeowners’ association and their annual maintenance fees.annual maintenance fees.
  5. 5. Guest/Owner CharacteristicsGuest/Owner Characteristics (cont.)(cont.) In terms of activities, skiing, golf,In terms of activities, skiing, golf, sightseeing and beach/waterfront activitiessightseeing and beach/waterfront activities are more important to timeshare ownersare more important to timeshare owners while entertainment, shopping and diningwhile entertainment, shopping and dining are more important to hotel guests.are more important to hotel guests.
  6. 6. MarketingMarketing Resorts offer timeshares in a variety of formats.Resorts offer timeshares in a variety of formats. Over 90 percent sell interval interests inOver 90 percent sell interval interests in increments of one week of use each year or asincrements of one week of use each year or as points offerings.points offerings. The standard type of ownership is the deededThe standard type of ownership is the deeded week, offered by almost 90 percent of resorts.week, offered by almost 90 percent of resorts.
  7. 7. Marketing (cont.)Marketing (cont.) The way timeshares are marketed depends on theThe way timeshares are marketed depends on the motivation of the potential investor/guest.motivation of the potential investor/guest. – Home from home occasionsHome from home occasions – Swapper occasionsSwapper occasions – Activity occasionsActivity occasions – Family holiday occasionsFamily holiday occasions The most popular marketing programs for sellingThe most popular marketing programs for selling timeshare products are referrals in-house guests,timeshare products are referrals in-house guests, telemarketing and direct mail.telemarketing and direct mail.
  8. 8. Reservations and Front DeskReservations and Front Desk Front office procedures at whole and interval ownershipFront office procedures at whole and interval ownership resorts have much in common with those at traditionalresorts have much in common with those at traditional resorts.resorts. Reservations at a traditional resort might come in via a toll-Reservations at a traditional resort might come in via a toll- free number or direct calls from prospective guests while,free number or direct calls from prospective guests while, at interval ownership resorts, they can also come from anat interval ownership resorts, they can also come from an exchange company or a vacation club.exchange company or a vacation club.
  9. 9. Reservations and Front DeskReservations and Front Desk (cont.)(cont.) In a traditional resort, the number of roomsIn a traditional resort, the number of rooms available for rent is determined by managementavailable for rent is determined by management while, in a vacation ownership resort, the numberwhile, in a vacation ownership resort, the number of units available is determined by the number ofof units available is determined by the number of owners who want to rent or exchange their units.owners who want to rent or exchange their units. The person reserving the unit may own a specificThe person reserving the unit may own a specific unit, own the right to stay in an unspecified unit, beunit, own the right to stay in an unspecified unit, be the guest of an owner, or “just” be a regular touristthe guest of an owner, or “just” be a regular tourist looking to stay at a resort.looking to stay at a resort.
  10. 10. Reservations and Front DeskReservations and Front Desk Employees who take reservations at vacation ownershipEmployees who take reservations at vacation ownership resorts have a much more complicated task than do theirresorts have a much more complicated task than do their counterparts at traditional resorts, which feature few roomcounterparts at traditional resorts, which feature few room types.types. Some resorts have separate check-in facilities for owners.Some resorts have separate check-in facilities for owners. Work patterns at interval ownership resorts differ fromWork patterns at interval ownership resorts differ from those at both whole ownership or traditional resorts. At thethose at both whole ownership or traditional resorts. At the former, guests check in and out on turnover days.former, guests check in and out on turnover days.
  11. 11. HousekeepingHousekeeping The principal differences are in:The principal differences are in: Size and Location of Units:Size and Location of Units: – Most vacation ownership units have two bedroomsMost vacation ownership units have two bedrooms and two full baths and can sleep up to six people.and two full baths and can sleep up to six people. – Public spaces in a vacation ownership resort canPublic spaces in a vacation ownership resort can include hospitality areas consisting of a check-ininclude hospitality areas consisting of a check-in desk, concierge desk, and cashier, game rooms,desk, concierge desk, and cashier, game rooms, restaurants, and stores.restaurants, and stores. – The lobby must be able to accommodate largeThe lobby must be able to accommodate large numbers of people and luggage during weekly arrivalnumbers of people and luggage during weekly arrival and departure times.and departure times.
  12. 12. Housekeeping (cont.)Housekeeping (cont.) Size and location of units:Size and location of units: – The outdoor landscape is important to creating anThe outdoor landscape is important to creating an ambience that enhances the overall experience of theambience that enhances the overall experience of the guest.guest. – While a standard room can be cleaned in 30 minutes,While a standard room can be cleaned in 30 minutes, it may take up to 90 minutes to clean a condominiumit may take up to 90 minutes to clean a condominium unit.unit. – The problem is not just the size but also theThe problem is not just the size but also the complexity of the cleaning task.complexity of the cleaning task. – While hotel rooms are located in an enclosed building,While hotel rooms are located in an enclosed building, condominium units in a resort may be spread overcondominium units in a resort may be spread over several acres.several acres.
  13. 13. Housekeeping (cont.)Housekeeping (cont.) Arrival and Departure PatternsArrival and Departure Patterns – In a traditional hotel, guests come and go during theIn a traditional hotel, guests come and go during the week. In a vacation ownership resort, most guestsweek. In a vacation ownership resort, most guests arrive and depart on the same day. All units in thearrive and depart on the same day. All units in the property have to be cleaned in a matter of hours.property have to be cleaned in a matter of hours. Staffing PatternsStaffing Patterns – Many housekeepers are needed—but for only oneMany housekeepers are needed—but for only one day a week.day a week. Owner RelationsOwner Relations – Some owners develop strong feelings toward theSome owners develop strong feelings toward the person taking care of their unit and want assuranceperson taking care of their unit and want assurance that that individual will always handle their unit.that that individual will always handle their unit.
  14. 14. Maintenance and EngineeringMaintenance and Engineering Because of the interest and involvement of owners, there isBecause of the interest and involvement of owners, there is more pressure on the maintenance department of amore pressure on the maintenance department of a vacation ownership resort compared to a traditionalvacation ownership resort compared to a traditional property.property. Because units are not standardized, it is difficult to specifyBecause units are not standardized, it is difficult to specify the same bedding, seating arrangements, and decor forthe same bedding, seating arrangements, and decor for each.each. In ownership condominiums, the maintenance function isIn ownership condominiums, the maintenance function is often run as a break-even proposition.often run as a break-even proposition. A system has to be set up to ensure that all work isA system has to be set up to ensure that all work is properly billed.properly billed.
  15. 15. Accounting and FinanceAccounting and Finance Seventy percent of all timeshares are financed internallySeventy percent of all timeshares are financed internally with down payments ranging anywhere from 10 to 30with down payments ranging anywhere from 10 to 30 percent and the remainder financed with an interest ratepercent and the remainder financed with an interest rate much higher than if financed through a bank.much higher than if financed through a bank. Timeshares generate returns of more than 20 percent.Timeshares generate returns of more than 20 percent. Developers not make money from timeshare sales theyDevelopers not make money from timeshare sales they also generate revenue from interest they receive on five- toalso generate revenue from interest they receive on five- to seven-year loans they make to timeshare buyers.seven-year loans they make to timeshare buyers. Timeshare developments generate revenue after theTimeshare developments generate revenue after the development is complete through timeshare management.development is complete through timeshare management.
  16. 16. Accounting and Finance (cont.)Accounting and Finance (cont.) On turnover day, all units have to be cleaned in aOn turnover day, all units have to be cleaned in a matter of hours.matter of hours. Interval and whole ownership resorts rarelyInterval and whole ownership resorts rarely overbook. Advance deposits and full payment onoverbook. Advance deposits and full payment on arrival are common.arrival are common. Key control can be a problem at interval resorts.Key control can be a problem at interval resorts. Large whole ownership resorts have a separateLarge whole ownership resorts have a separate department dedicated to owner relations.department dedicated to owner relations.
  17. 17. Accounting and Finance (cont.)Accounting and Finance (cont.) Ownership properties have different accountingOwnership properties have different accounting needs compared to traditional hotels.needs compared to traditional hotels. The essence of condominium and timeshareThe essence of condominium and timeshare management is about revenue sharing rather thanmanagement is about revenue sharing rather than merely adding up posted numbers. Ownersmerely adding up posted numbers. Owners expect to receive the correct amount of rental poolexpect to receive the correct amount of rental pool income from their units on a monthly basis sinceincome from their units on a monthly basis since they are paid based on a formula based on thethey are paid based on a formula based on the percentage of their possession in the timesharepercentage of their possession in the timeshare agreement.agreement.
  18. 18. Accounting and Finance (cont.)Accounting and Finance (cont.) While hotels keep two types of accounting recordsWhile hotels keep two types of accounting records – one for guests in the form of guest accounts or– one for guests in the form of guest accounts or folios – and one for business, condominiumfolios – and one for business, condominium resorts need three sets of records:resorts need three sets of records: – Guest (unit-renter) accounts for each guestGuest (unit-renter) accounts for each guest – Owner accounts are unique to resortOwner accounts are unique to resort condominiumscondominiums – Owners association accounts are used toOwners association accounts are used to prepare budgets and financial statements forprepare budgets and financial statements for the owners associationthe owners association
  19. 19. The End!The End!

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