5.7 Resorts with VRP

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of your portfolio of VRP can be accomplished when you are actually able to build a portfolio.

Take your time. Be methodical and disciplined. Remember, you are playing the long game in this business. It will take several years to build up the portfolio that allows you to engage full time, but I can assure you it is well worth the time and eff ort!

5.7 Resorts with VRP

Now, let’s take a look at one of the fastest growing sectors in the VRP industry: the move by resorts to add single family homes, townhomes, and condominiums (primarily for private owners to purchase) as investments into their hotel inventory. These communities will typically have interior attractions and all the hotel amenities for the VRP guests to use, and several dominant management companies to select that will handle all the Vacation Rental Management and booking for the investors. You’ll learn more about this in Chapter 9.

Your VRP business will center around the developments in some of the most amazing locations on the planet. You will need to have a clear understanding of both residential and resort developments, their attractions and amenities, and the various types of VRP that are available in them.

WEALTH AS A VACATION

Destination and All-Inclusive Resorts Most of these types of homes can be found in communities that are also resort-driven, with mixed amenities. They provide most of a vacationer’s wants, such as food, drink, sports, entertainment, and shopping, right on the premises. A hotel is frequently a central feature of such a resort, but some are condominium complexes that are timeshares, owed fractionally, or wholly owned.

A destination resort is a resort that itself contains the necessary guest attractions including food, drink, lodging, sports, entertainment, and shopping within the facility so that guests have no need to leave the facility throughout their stay. In other words, this type of resort does not need to be near a destination such as a particular town, historic site, natural attraction or theme park to attract its patrons.

Some examples are:

• Atlantis in the Bahamas • Walt Disney World Resort near Orlando, Florida • Port Aventura World near Barcelona on the Costa Daurada in

Spain • Costa do Sauípe in Northeastern Brazil • Laguna Phuket, Thailand • Sun City, near Johannesburg, South Africa

An all-inclusive resort charges a fi xed price that includes most or all items. Most inclusive resorts include lodging, unlimited food, drink, sports activities, and entertainment for the fi xed price. The number of resorts in the United States off ering all-inclusive amenities has decreased in recent years, although cruise vacations (which are generally all-inclusive) have become more popular. We mention these here because many of these resorts are adding VRP off erings and many of the new all-inclusives are integrating VRP into their development plans.

Many resorts now have integrated large, well-organized residential

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areas into their masterplans. These are VRP off erings that include for the homeowner, and the homeowner’s guests renting the home, access to all of the amenities in the resort. Also included are typical hospitality-type services like housekeeping, concierge, shuttle services as well as private chefs and private in-home spa services.

This industry trend has dovetailed with resorts moving to more specialization and including theme park-like attractions inside their gates. Ever since waterparks came indoors and attached themselves to hotels, the hotel waterpark resort industry has continued to grow at an accelerating pace.47 And the average size of these waterpark resorts is getting bigger. In 2004, only one indoor waterpark over 50,000 square feet in size opened. In 2005, three opened. Eight indoor waterparks over 50,000 sf opened in 2006, and another eight opened in 2007. As of March 2019, the United States and Canada had a total of 1,158 waterparks. Thirty-three waterparks opened in 2018.48

These numbers do not include the Crystal Lagoons model of residential vacation home development. Currently, there are over 50 of these amazing water themed communities either already built, being built, or in the planning stage in the United States. This presents a very strong opportunity for the VRP investor.

The Future of Resort Development and Vacations As a VRP investor, it is smart to be aware of trends. Lodging, recreation, and entertainment concepts have merged into one. In urban areas, we now see hotels, recreation, entertainment, sporting activities, shopping, convention centers, and large-scale attractions being combined in mixed-use resort destination developments. In more rural settings, hotels, and indoor-outdoor waterparks are being combined with golf courses, ski hills, conference centers, medical centers,

47. https://www.hotel-online.com/press_releases/release/waterparks-growth-trends-in-2019/ Accessed June 10, 2019. 48. https://www.hotel-online.com/press_releases/release/waterparks-growth-trends-in-2019/ Accessed June 10, 2019.

WEALTH AS A VACATION

casinos, and residential projects as well as second home, vacation home, and resort retirement communities.

Long weekends are replacing long vacations for Americans. A recent NPR story reported that the two-week vacation is disappearing. Instead, employees are using their vacation days to extend weekends and take shorter breaks from the offi ce.49 Mounting pressure for workers to be available to clients around the clock, and more dual income couples, means it can be tough to coordinate vacation schedules due to work demands. More than half of all vacationers will take several short weekend getaways instead of the traditional long summer retreat.

This trend helps explain the popularity of drive-to regional resorts and the rapid growth of indoor waterparks as part of hotels and resorts. Dissatisfaction with the airlines and demand for shorter getaways all contribute to the success of regional drive-to resorts. Multi-generational family gatherings are also more popular. Unlike the typical vacations of the past that involved just the nuclear family, older and younger generations are traveling together more today. In a nation in which families often live in separate states, sharing a vacation is a way for grandparents, parents, and children to book some quality time and make memories.

Several waterpark resorts with large villas (sleeping 12 to 20 people) have reported that these popular units sell out fi rst. As a result of togethering, as it is called, indoor waterparks are being designed for all ages and resorts are responding with packages to please all ages. Indoor waterpark projects are getting bigger. The average size of a hotel indoor waterpark has been steadily getting bigger each year. More and more hotel waterparks are adding meeting space to attract diff erent types of customers during certain low periods throughout the year. And more hotel waterparks are part of larger mixed-use resort projects. In the hotel waterpark resort industry, bigger is better.

49. https://www.npr.org/sections/health-shots/2018/08/20/639551037/vacation-days-pilingup-heres-how-to-get-the-most-out-of-a-short-vacation Accessed June 10, 2019.

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To encourage families with young children to drive up to 200 miles and spend more than $200 a night for a family suite, these resorts off er high entertainment value.

Finally, the savvy VRP owner knows that adventure sports are going mainstream—and from natural to man-made facilities. Activities under this umbrella include surfi ng, skiing, boarding, paddling, rafting, kayaking, rock-climbing, rope-walking and skydiving. While enthusiasts want the real thing, it isn’t always available. As a result, golf simulator technology and the artifi cial rock wall have become popular. Every natural setting has a made-man artifi cial version; today, every outdoor sport has an indoor version located closer to home.