Since the early days of timeshare, the opportunity to exchange the week you own for one across the country or even across the globe has been an essential part of the product. However, today’s huge clubs offer more than ever for timeshare owners who prefer to stay with their own system. And with the never-ending wave of consolidation sweeping the industry, those clubs are only getting bigger.
How are exchange companies responding to this changing environment? To find out, Resort Trades checks in with four exchange company leaders, David Gilbert (DG), president of Interval International; Gordon Gurnik (GG), president of RCI; Justin Hunter (JH), vice president of operations at RTX; and Francis Taylor (FT), CEO of DAE. Here’s what they had to say.
Resort Trades: With consolidation in the industry, many of the clubs now have extensive resort networks for internal exchange. How are you remaining relevant to members of these large clubs?
GG: With today’s consumer expectations, everyone in the industry is looking for new ways to add flexibility to the vacation ownership product to better appeal to current and future generations. Club networks add to that flexibility, and work well with global exchange networks like ours; they are truly complementary products. An exchange network is just able to extend the benefits beyond club options for those owners who are interested in having thousands of travel options in 100 countries.
DG: It all comes down to flexibility, value, and ease of use. We offer our members quality exchange opportunities in more than 80 nations on six continents. And our upgraded Interval Gold and Interval Platinum members have the added flexibility of ShortStay Exchange, which addresses the needs of those who can’t vacation for the traditional week; and Interval Options, which lets members trade their resort time toward a cruise, tour, golf, or spa vacation, as well as a unique Interval Experiences adventure. And that’s just exchange. We’ve also continued to enhance our year-round leisure and lifestyle benefits and services, including access to Getaways — vacation rentals at below-market prices. Of course, we don’t develop benefits and programs in a vacuum — our collective ear is forever to the ground. Through extensive research and customer feedback — especially the insight that we gather from Facebook and our members-only Community forum — we stay attuned to their travel needs and preferences. As a consumer myself, I have to tell you that none of this would matter if we didn’t deliver a seamless membership experience. So we have created an array of digital tools designed to engage members and make it easier for them to plan their vacations. Take, for example, our mobile app, which allows members to search for and book Getaways, access the Resort Directory, view Interval HD videos, create and save a list of favorite resorts, and share resorts with friends on Facebook and Twitter. They can even create alerts for desired vacations
JH: Large clubs can provide a great deal of value to their members but they’re ultimately still limited. By providing timeshare travel opportunities worldwide as well as features such as a deposit life as long as 48 months, RTX can make a club product even more powerful. With features such as discounted hotel stays, weekly stays and car rentals, a club product plus an RTX membership can be a one-stop-shop for all travel needs.
FT: DAE’s position within the exchange space has always been one of ‘additional capacity’ and ‘a complimentary added benefit’ to resort groups and clubs to help supplement their own suite of exchange opportunities. DAE is a consumer focused exchange provider and has worked with individual timeshare owners, along with their resort management company and HOA to ensure the successful confirmation of as many owners’ exchange vacations as we can assist with. Whilst many resort groups and clubs have agreements in place with other resorts outside their own group/club, the fact is that a timeshare owner’s destination and resort of choice often falls outside their own club’s capabilities and internal arrangements. The problem also facing many legacy resorts is that their owners have become disengaged with the exchange process over the years due to rising costs of exchange and membership. With the perceived value in exchange diminishing as a result, this has led to unhappy and dissatisfied owners – hence more delinquent weeks that resorts cannot monetize. This is where DAE has filled a void to help facilitate exchange that meet’s an owner’s needs and returning the value proposition to exchange and vacation ownership in general. By having the attitude of being helpful to the whole industry, it seems more and more opportunities open up for our brand.
RT: At a recent industry conference, a representative of a small independent resort said his exchange company helps him compete with the big brands. What products and services are particularly helpful to this type of developer?
GG: Naturally, the addition of an exchange membership takes a vacation product from having one location to opening up the world of travel with thousands of vacation options, which immediately creates an offer that appeals to more travelers. In particular, programs like RCI Points and RCI Platinum add flexibility and expanded travel benefits, which are major value-adds that help in the sales room at smaller resorts. Beyond that, at RCI we are focused on providing all of our affiliates with resources and services they need to be successful, because when they are successful it benefits all of us. So that includes services like RCI Affiliate Access, which capitalizes on the buying power of our large group of affiliates to provide needed business services at preferential pricing. We also offer revenue management services to assist affiliates with pricing models, which has seen huge success and payoff for those who have participated so far. Other products like RCI Presenter, RCI.com, and RCI LiveStream provide high-end technology resources, which are useful to both large and small properties. And for HOA resorts, which have specific needs that are different from properties in sales, we provide educational materials and in person courses.
DG: You really have to look at both the owner side and the developer side of the equation to completely understand the value that we provide to our clients. First, there’s no question that smaller developers are going to emphasize the depth and breadth of our global network at the point of sale. And speaking of size, our critical mass allows us to offer their owners access to cruise specials; discounts on guided tours, car rentals, and resort and hotel stays; and last-minute bargains, among other valuable travel and leisure deals. This carries over to our support for clients, too. For example, Interval’s Affiliate Advantages provides developers with value-driven programs — from the likes of Bank of America and Entertainment — that help increase resorts’ revenues and maximize marketing and operational efficiencies.
FT: Small resort groups, independent resorts and developers certainly don’t have the strength or financial resources by themselves to be able to add in additional benefits to the same extent as the much larger organizations and multinationals. DAE has a whole suite of business solutions to offer our industry partners to maximize engagement and create revenue. These include marketing assistance, revenue share programs, loyalty and rewards programs, rental distribution, white label exchange services and branded call center services.
JH: Timeshare owners are accustomed to having to pay for a membership and deposit a week before they can even begin searching for an exchange. These are two roadblocks RTX has removed by offering a membership level that is free and allowing the member to search for a week without first providing a deposit, ultimately creating a risk-free transaction. There are many other advantages such as an exchange fee of only $117 and discounted weeks as low as $49.
RT: Does your company have any initiatives to bring new players into the timeshare space?
GG: We believe the biggest obstacle to attracting new entrants into the timeshare space is awareness. To tackle this, we provide educational opportunities throughout the year, ranging from basic information on our websites with calls to action, to robust in-person, multi-day conferences. For instance, we recently held a substantial conference in India that featured educational panels and speakers to introduce the concept to major players in the hospitality space. In Latin America, we hold an annual conference hosting more than 250 tourism leaders in the region to discuss vacation ownership.
DG: In 2016, Interval held its 18th annual International Shared Ownership Investment Conference, which delivers a comprehensive educational and networking program for potential entrants. There are panels on resort financing, sales, marketing, and operations; just as importantly, participants gain valuable knowledge from some of the industry’s most seasoned executives. Another hallmark of the event is strong lender participation, including representatives from financial institutions involved in the business and financiers evaluating the industry. The conference also attracts hoteliers, real estate and property developers, and government officials interested in understanding more about the vacation ownership business model. Over the years, hundreds of hospitality students from several Florida universities have attended workshops and panel discussions to learn more about industry career options. And we’re committed to this being an international event: In addition to the U.S., we’ve held conferences in locations around the globe, from Bogotá to Cape Town to Dubai to Beijing.
FT: We’re always speaking with potential entrants, encouraging them to look closely at bringing their own style and flair to add another dimension to the already highly diversified range of resorts and urban properties. DAE is very active in the Middle East, the Sub-Continent, China and South East Asia. These areas have huge potential to grow and expand their tourism and hospitality sector. Vacation ownership as part of mixed use developments is gaining greater attention from individual developers and well-respected hotel brands in these areas.
RT: What do you see as the future role of exchange in the timeshare industry?
GG: Exchange programs will continue to bring desired flexibility to vacation ownership. This flexibility is becoming increasingly important as Gen X and Gen Y take center stage, with a focus on unique experiences during travel and a desire to explore new and different places each year. At RCI, we will continue to expand our network and global footprint to welcome travelers home in more places than ever, and we will keep our focus on supporting our affiliates as they grow their businesses.
DG: It may be cliché, but variety is the spice of life. Interval provides vacation opportunities all over the world, just as the peer-to-peer companies do. But through our partnerships with world-renowned brands and quality independents, we offer something that the Airbnbs of the world do not: professionally delivered vacation experiences. That’s very powerful, and it’s why I’m more than optimistic about the future of exchange.
JH: The role of exchange in the industry is going to be as important as ever moving forward. However, it must be more diverse, creating competition within the section of the industry and ultimately providing timeshare owners with more options.
FT: From the sales deck where the aspirational desire to travel the world is a big part of the sales presentation, to working with HOAs and resort managers to support and increase owner satisfaction with the product they’ve purchased, and especially to the individual consumer, exchange companies are there to help educate. We’re used as resource centers when consumers have questions about using their timeshare product, and we’re there to build on the tradition of helping hundreds of thousands of families around the world enjoy time away from home and find the balance in their busy lives. Exchange companies are vital. Whether it’s an adventure location to experience something completely out of their comfort zone, spend precious time with family building memories that will last a lifetime, or using timeshare to explore their own countries, ensuring consumers have an affordable option to getaway and have some quality leisure time will always rate very highly.