Vacation ownership also known as timeshare, offers the opportunity to share the ownership of vacation accommodation generally resorts or condominiums in popular domestic or international tourist destinations. Typically, the vacation accommodation is shared by multiple owners who hold the right to use the property for a specific period of time in a year. Property owners can either use a specific unit of the resort or the total property during an allotted period of time.
Time share accommodation is the most profitable sector as the owner holds rights for a specific period of time mostly for a few weeks in a specific season. In order to capitalise on the increasing popularity of time share accommodation, major international hotels have also entered this sector and are developing a full range of offerings in various destinations. There are three main types of vacation ownership in the industry including fixed week, floating week and points based system. Under fixed week system, the owner generally holds the rights of a particular apartment in a resort for the same period of time each year. In a floating week system, unlike in fixed week, the owner can change the time of holiday each year based on the availability. Under the points based system, owners often have an advance reservation for a particular destination and own “timeshare points” instead of accommodation units and can redeem these points at various destinations.
Vacation Ownership: Market Dynamics and Restraints
The robust growth of the vacation ownership industry is mainly attributed to growing population of high net worth individuals across the globe. According to the world wealth report, there were around 720,000 new high net worth individuals in 2015 and this number is projected to increase further at a significant rate. Further, vacation owner accommodations provide more in-room amenities such as kitchens and laundry facilities and offer spacious floor space compared to other traditional hotels. Factors such as high occupancy rates, increasing revenue per available room and average daily rate compared to traditional hotels have boosted the growth of the timeshare accommodation industry.
However, huge competition from regional players as well as international players can impact the growth of the vacation ownership sector in the short term. In addition, annual maintenance cost is involved in vacation ownership accommodation, which may increase each year whether the accommodation is used or not. In addition, finding skilled staff is another restraint in the vacation ownership sector. Further, the players in the timeshare accommodation industry have to adopt innovative strategies in order to strengthen their marketing processes.
Vacation Ownership: Regional Outlook
Regarding geography, the global vacation ownership sector has been categorised into seven key regions including North and Latin America, Eastern Europe, Western Europe, Asia Pacific excluding Japan, Japan, and the Middle East & Africa. North America is the leading region in the world followed by Europe and Asia Pacific. North America is expected to witness significant growth as the hospitality and leisure industry is evolving and tourists are seeking new and unique vacation experiences. The Asia Pacific region is expected to increase at an exponential rate due to growing ultra-high net worth individuals and increasing tourist arrivals in the region. China and India are the leading contributors to the growth of the timeshare accommodation sector in the Asia Pacific region.
Vacation Ownership: Forecast Analysis
As the travel and tourism industry is increasing the popularity of timeshare accommodation has increased and several timeshare accommodation exchange organisations have entered the market. The exchange organisation enables consumers to exchange their vacation accommodation with another timeshare owner accommodation at a different place. Globally, Resort Condominiums International and Interval International are the popular organisations that offer timeshare exchange services. According to the Resort Condominiums International website, the company has 38 million members with 35,000 exchange options spanning around 108 countries.
Vacation Ownership: Key Players
Some of the major players of the global vacation ownership industry include Hilton, DeVere, Marriotts, MacDonalds, Starwood Hotels, Resorts Worldwide and Westgate.
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