You recently came back from a vacation, and you are already making plans for the next trip. Some of the best moments in life are indeed experienced when one is on vacation, and with all the work one does throughout the year, rest and some fun are deserved. Vacation ownership can be defined as owning a timeshare. The size of this industry across the world is estimated to be $550B. On top of that, the size of the hospitality sector in the United States is about $218B. It has been growing at a rate of 6% per year for the last ten years. As a result, this is regarded as one of the most attractive and large markets for investors and many suppliers and supporting sectors. These range from real estate and financing to furnishings and room décor, marketing, and food and beverages. On the other hand, it is a complex sector with many features; this article examines a more focused method for vacation ownership research since, thus far, research in this sector has been disparate and sporadic.
Overview of Vacation Ownership
Vacation ownership is normally a deeded ownership (such as a house) where you buy a portion of your favorite resort. The “pie’s piece” is normally sold in weekly increments but is normally transformed into points that can be used worldwide. Vacation ownership comes with many benefits. One of the great things about timeshares is that they provide prospects of traveling from coast to coast (Lamprecht, 2019). On the other hand, some brands can offer opportunities of traveling abroad, too; vacation ownership can make the dream of traveling around the world a reality. Vacation ownership involves owning structures and other shared investments where the owners have diverse views or opinions regarding property management policies. It means an individual owns time at their preferred resort with a preferred brand.
Vacation ownership is all about prioritizing vacations. However, what that means is making agreeable time and time-fun for yourself or for those you love. It paves the way for households from all corners to take a reasonably priced vacation without necessarily preceding luxury. There are several types of vacation ownership, including weeks-based and points ownership. Additionally, there are several types of owning like a deeded timeshares (owned in perpetuity), right-to-use, and leasehold (such as DVC, which means that the ownership goes back to the brand after some given time). Each member in vacation ownership is given a particular amount of rights or time to the unit and extra benefits and perks. Vacation ownership has vacation exchange networks utilized by the resort to pave the way for their members to travel across the globe. Lamprecht (2019) asserts that timeshares are situated in some luxurious places worldwide, allowing members to be given VIP treatment when they take a trip to coveted holiday destinations. In most cases, one needs to be enrolled in a membership arrangement with a vacation firm or have a deed to a unit at a resort. The owner can use their points-based membership to take a trip to another resort within their network of the brand.
According to Ristova et al. (2018), vacation ownership might be an efficient way if one plans on vacation budgeting yearly. Most of the vacation clubs via Disney, Marriot, Hilton, and Wyndham pave ways to choose travel. One requires paying annual maintenance fees on their ownership. On the other hand, you could significantly equate these to what you could be paying timely in the mission of finding a new resort per year. The choices and the freedoms are among the main benefits of vacation ownership. In today’s world, most programs of vacation ownership or timeshares are not just based on points, but they are also in the style of a vacation club. In other words, owners can usually visit other hotels within their brand’s network by utilizing their points. Vacation ownership can be a big fit for all sorts of travelers. Whether you like taking a trip to the same resort, beach, or city every time, or you are craving for a change, timeshares will never disappoint; they provide the flexibility of changing your mind (Vella, 2017). Vacation ownership is beneficial to the owners since there are many available options. One can start by selecting their favorite brand, whether Hilton, Disney, Marriot, or Wyndham. Once you pay for the membership, an arena of vacation options is open to you that are not to a certain extent like anything else.
As mentioned earlier, vacation ownership and timeshare are substitutable terms. Vacation ownership refers to what you ultimately get when you have a timeshare; you own your vacations. You do not have to wonder when your next vacation will be, if you can book accommodation, or if you will be able to book a room for everyone. Vella (2017) claims that vacation ownership helps individuals in controlling their vacations. One owns it because they will have a real deed for their property. On top of that, having a timeshare means that one can sell it. Often, the cost is one of the determining factors that make many persons not make yearly vacations. However, when a person is a member of a vacation club or they own a timeshare, they have locked upcoming vacations at the prevailing prices.
Challenges
In the recent past, people across the world have been in the know of a sad story of a vacation ownership scam that has affected clients in many ways than they could ever imagine. In other words, some individuals are spoiling the industry, making clients go away because of the challenges they face at the end of the day (Ristova et al., 2018). Effective marketing is among the significant features as far as failure or success of the sector is concerned. Challenges faced by investors in the sector include a negative image of the sector. Some dishonest individuals have tarnished the sector’s image for vanishing after collecting membership fees from the clients, thus creating a negative image. This has brought several difficulties to convince potential clients to buy membership unless a dependable brand supports the firm at hand.
Another challenge is a large advance payment. As upfront asked for paying membership fee is considerably large, it significantly decreases the market’s total size for potential clients. The industry experience is substantially intangible as a courtesy, friendliness; comfort, among others, can only be experienced but not evaluated. As a result, marketers are faced with complexities in convincing potential customers since they cannot carry the product they are selling but can only show videos, pictures, or create a mental picture. As vacation ownership is about selling a product that will be used in the future, and most of us consider the future to be uncertain, it creates a conflict in the client’s mind on whether or not to buy the product.
Other Areas of Hospitality
In the recent past, we have observed an actual change with the rise of the sharing economy upsetting traditional industries and compelling conventional industries to make an about-turn on their business models. The hospitality sector has been among the major targets in the disruption, with new models evolving quickly, resulting in a range of new investment prospects. Condo-hotel, a cross between a condo and a hotel, is an example of such investment opportunities (Stoch-Chyc, 2019). A condo hotel can be defined as a building used as both a hotel and a condominium. Typically, condo hotels are developed high-rise buildings that are operated like resorts. They pave the way for the sale and private ownership of the hotel’s rooms, with maintenance and management is taken care of by the hotel. As a result, rather than just renting a hotel room, the person who purchases the room converts into the room’s owner. Condo hotel’s arrangement allows individuals to pay for their vacation days in advance while buying a real estate piece.
According to Stoch-Chyc (2019), the buyer gets the deeded ownership of the hotel’s room under the condominium contract while the hotel is left with the management responsibility. Additionally, the buyer can use the room on some days during the year. They have the right to rent out the condo when they are not using it and leverage the management and marketing done by the hotel ultimately. In other words, the buyer owns a piece of the hotel and will receive part of the benefits realized for its use. The condo-hotel model is typically employed in areas like a resort location where condominium tenure must be used part-time. On the other hand, condo hotels are faced with challenges of business complexities and legal complexities, although the model is considered to be here to stay.
Conclusion
Vacation ownership can be defined as owning a timeshare. It is normally a deeded ownership (such as a house) where you buy a portion of your favorite resort. It involves owning structures and other shared investments where the owners have diverse views or opinions regarding property management policies. Vacation ownership might be an efficient way if one plans on vacation budgeting yearly. It is beneficial to the owners since there are many available options. It has vacation exchange networks utilized by the resort to pave the way for its members to travel worldwide. A condo hotel is another model that operates like vacation ownership. They have developed high-rise buildings that are operated like resorts. They allow for the sale and the private ownership of the hotel’s rooms, with maintenance and management taken care of by the hotel. Thus, instead of renting a hotel room, the person who purchases the room converts into the room’s owner. On the other hand, the two models are faced with various challenges such as business and legal complexities that keep off potential clients.
References
Lamprecht, I. (2019). Overhaul of vacation club and timeshare industry on the cards. Personal Finance, 2019(456), 9-10.
Ristova, C., Koteski, C., Dimitrov, N., & Jakovlev, Z. (2018). Defining the timesharing hotel industry. SocioBrains, International scientific refereed online journal with impact factor, 5(52), 26-30.
Stoch-Chyc, H. (2019). Condo hotels as a way to invest in new market challenges. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 63(9), 185-199.
Vella, A. (2017). The future of the vacation ownership industry in the Maltese islands (Bachelor’s thesis, University of Malta).
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