View Report Details Vacation Ownership (Timeshare) Industry Report ----------------------------------------2015
View Report Details Executive Summary One of the major pieces completing the travel industry structure includes the ‘Hospitality Segment’ which stands out as a significant and important sect of the overall travel industry. Hospitality sector in itself comprises of various sub segments like lodging, vacation exchange and rentals, and vacation ownership. Vacation ownership, also known as timeshare, continues to lead in the hospitality and leisure industry with steady growth, as a large part of the industry's constant innovation developed in response to consumer lifestyle needs and vacation preferences. Also, the timeshare product can take one of several forms – fixed week, floating week or membership; however, the basic premise of owning time in a resort or group of resorts remains the same. This sector was once dominated by private developers selling one-week fee intervals, but now includes publicly-traded hospitality companies actively developing a full range of offerings at different price points in resort and urban destinations. An increase in the factors like occupancy rates, average daily rate (ADR), and revenue per available room (RevPAR) have made significant contribution to the growth of the industry. The key factors driving growth of the global vacation ownership industry include rising number of HNWI and employed population, growing demand for leisure and recreation, increasing internet penetration, ameliorating global economic condition and zealous international tourism in the US. Some of the noteworthy trends and developments of this industry are enhanced buyer’s protection, shifting profitability from hotel stays to timeshare buying, growing popularity for eco-friendly timeshare resorts and fast pace recovery of respective industry in the developed markets after recession. However, the growth of vacation ownership market is hindered by a number of factors including stringent government regulations. The report offers an analysis of the vacation ownership market. It discusses major market trends, growth drivers and challenges. The market for vacation ownership is personified by intense competition, with numerous large and regional players competing on the basis of quality and location of timeshare resorts, flexibility of usage, and other services offered by them. Wyndham Worldwide Corporation is the leading player in the global vacation ownership market in terms of revenues, number of resorts, and number of owners. The other leading players include Marriott International, Starwood Hotels, and Diamond Resort International, among others. By combining SPSS Inc.’s data integration and analysis capabilities with our relevant findings, we have predicted the future growth of the industry. We employed various significant variables that have an impact on this industry and created regression models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output, including charts, tables, and tests.
Timeshare model has evolved tremendously over multiple decades, moving from fixed week, floating week fractional units, and ultimately the proliferation of points a more fungible product that benefits both consumers and timeshare developers/operators. Global Hotel Industry - Occupancy Rate by Region (2009-2014) Till 2013, the occupancy rate in Asia Pacific has been leading the board followed by Europe. It was the first time in 2014, when Europe took the lead with a slight rise in occupancy rate above that of Asia Pacific.
%
With lowest occupancy till June 2015 on YTD basis, Middle East holds the highest revenue per room and the average daily rate. Year 2014 marked the rise in number of timeshare owners. X% of new owners made just a single payment to cover their purchase and X% spent US$10,000 or more on their timeshare. 2009 2010 Asia Pacific
2011 Americas
2012 Europe
2013
2014 Middle East/ Africa
Global Hotel Index (YTD June 2015)
Timeshare Industry by Ownership (2014)
S$ U
%
New Owners
Existing Owners
Asia Pacific
Middle East/Africa Central and South Europe America ADR RevPAR Occupancy
%
Hotel rates vary from season to season, however the average rates remain in a range throughout the year. Yearly Average Hotel Daily Rates Worldwide by Region (2012-2015*)
2015*
MEA
2014 2013
Europe
2012
The yearly average daily rates in the Americas was found to be rising yearly from 2012 till date, opposite scenario is observed in the Asia Pacific Region. The beginning of the year 2014 was marked with extreme slash down of monthly average rates for the industry. The major reason behind such an act of the industry was found to be Ebola Outbreak in African Region. As of 2014, X% of the members own one week of equivalent points. Furthermore, X% of owners held two to three weeks in the aforementioned year, signaling a high level of satisfaction.
Americas Asia Pacific US$
Timeshare Industry Products by Type (2014) Monthly Average Hotel Daily Rates Worldwide (August 2013 - July 2015)
Biennials
S$ U
Points Based Products Traditional Weekly Variety
g-13A u -13 Sep ct-13 O v-13 o N ec-13 D -14 Jan -14 Feb ar-14 M r-14 p A ay-14 M -14 n Ju l-14 Ju g-14 u A -14 Sep ct-14 O v-14 o N ec-14 D -15 Jan -15 Feb ar-15 M r-15 p A ay-15 M -15 n Ju l-15 Ju
2-3 Weeks
Asia Pacific
Americas
Europe
MEA
1 Week %
The global vacation ownership industry is recovering at a fast pace and both demand and supply factors are poised to observe substantial growth in the years to come. The US Hotel Industry Revenue and Annual Growth (2009-2014)
n ilo B $ S U
%
The total revenue of the US hotel industry was estimated at US$X billion in 2013, which further inclined to US$X billion in 2014; an increase of X% over previous year. In 2014, the occupancy rate of the US hotel industry was X%, the highest since 2009. An occupancy rate of X% was recorded for the year 2013, marking a sharp rise in occupancy with X% in 2014. The variables were found to be X% correlated with each other implying that with increase in ADR, RevPar automatically increased for the hotel industry in the US. 2009
2010
2011
2012
Revenue
2013
2014
YoY Growth
The US Hotel Industry Occupancy Rate (2009-2015E)
%
Correlation between ADR and RevPAR (2009-2015E)
2009
2010
2011
2012
2013
2014
2015E
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