Variety of areas attracting resorts, owners

Variety of areas attracting resorts, owners

William Atkinson

Timeshare executives and others in the industry give similar answers for what’s hot in timeshare locations.

“When I think about what’s hot, while there are some notable exceptions, I think more along the lines of drive-to destinations than fly-to destinations,” said John Burlingame, executive v.p. of Hyatt Vacation Ownership, which is based in Chicago. “One reason is because of what has been taking place in the travel industry the last few years and with the changes in terror alert status. People are becoming more comfortable driving to locations.”

Another reason, he said, is that drive-to markets with well-conceived resorts and good amenity packages will appeal to people on a year-round basis.

“We are seeing increasing demand in almost all areas, whether it is a destination resort or a regional resort,” said Kathy Conroy, managing director of Miami-based HVS Timeshare Consulting. “We have clients doing projects in both of these venues.”

When it comes to specific popular locations, the most frequently mentioned were Orlando and Las Vegas [“Orlando, Las Vegas hubs for growth, demand,” Oct. 4 issue, page 30]. In third place was Hawaii.

“One exception to my point that drive-to destinations are more popular than fly-to destinations is Hawaii, which continues to be one of the strongest ownership markets in the world,” Burlingame said.

“Hawaii is red hot, but it is difficult to enter because of product cost,” said Dave Gilbert, v.p. of resort sales and marketing for Interval International, an exchange company based in Miami. “Hawaii remains a strong market, continuing to do good numbers each year,” Conroy said. “However, it has the same problem as California, which is that strong demand exists, but it is difficult to find locations and deal with high costs and zoning issues.”

“Some brands have experienced spectacular success in Hawaii in the last five years,” said John Sweeney, chairman and c.e.o. of Global Resorts International in Las Vegas. “However, Hawaii has always been long on demand and short on supply.”

In regard to zoning, Sweeney has a more optimistic take than some other observers.

“The resistance of the zoning and planning people has weakened to some degree recently, primarily as a result of the impact of 9/11,” he said. “They realize that they need to feed the economy.”

The southwestern region of the United States came in fourth place.

“One market that is extremely hot is Arizona,” Gilbert said. “There is a lot of new business being generated there.”

“Phoenix and Scottsdale are becoming hot, as are other markets that are being fed by California,” Sweeney said.

California as a whole is hot, but suffers from a supply problem.

“In California, demand is much greater than availability,” Conroy said. “The problem is finding a location so you can develop the product.”

Florida still has strong demand, Conroy said.

“A lot of people continue to be interested in vacation ownership in Florida, especially in the beach areas,” she said.

After Florida, the Carolinas are becoming good markets, according to Gilbert.

“Myrtle Beach [S.C.] is one of the top growth markets,” according to Sweeney.

Another location mentioned was Colorado.

“Aspen, Beaver Creek, and Breckenridge continue to be very hot, despite the fact that skier days have declined,” Burlingame said. “The reason they remain hot is that people are doing more things in the mountains all year round. It’s not uncommon for people from Miami to visit these locations in the summer.”

On the international front, destinations being visited by U.S. travelers seem to be doing well, according to Gilbert.

“The reason is that these travelers tend to be reliable from a payment standpoint,” he said.

The most popular destinations, he said, include the Caribbean and Mexico, especially Cabo San Lucas, Puerto Vallarta and Cancun.

One new trend is increasing popularity in some urban timeshare destinations.

“Certain urban areas are seeing some growth, such as New York and Boston, where some hotels are setting aside floors as timeshares,” Sweeney said. “These aren’t growing as strongly as some people predicted, but there is still some potential.”

“We are starting to see expansion in some second-tier markets, especially urban markets, such as San Antonio [Texas], Charleston [S.C.] and Savannah [Ga.],” Gilbert said.

Cooler destinations

When it comes to areas that are less hot, observers emphasized that there are no areas that are quickly getting cold. It’s just that a few areas are not growing as rapidly as they once did.

“The Northeast market in general has always seemed to be the most sensitive to the economy-increases in fuel costs, layoffs, etc.,” Gilbert said. “However, our clients seem to be doing well in this area.”

“The Poconos [in Pennsylvania] and Catskills [in New York] may have cooled off a bit,” Burlingame said. “One reason may be because they are older resorts and perhaps don’t offer the same amenities that newer resorts do. They may offer skiing, but it’s not a Colorado ski experience.”

In addition, he said, people who are attracted to the Poconos and Catskills might not be as affluent as people who are attracted to Aspen.

“Markets don’t seem to be growing much in New England, the upper Atlantic states, the upper Mid-Central states and the Midwest in general,” Sweeney said. “Regional resorts are popular when the weather is nice, but destination resorts do well year-round.”

Despite a few regions not growing as rapidly as they once did, the industry as a whole is healthy, according to Sweeney.

“About 4 percent of income-eligible households currently own timeshares,” he said. “We estimate, as do some other research people in the industry, that the potential is 12 percent, so we’re only about one-third of the way into the potential.”

hmm@advanstar.com

COPYRIGHT 2004 Advanstar Communications, Inc.

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