A quick glance at the media hype surrounding Airbnb, HomeAway and other sharing economy hotel alternatives would lead many to believe that these companies are the founders of a new concept that is revolutionizing the industry. But, in fact, another facet of the hotel industry—timeshare—considers itself the “original” sharing economy, and has the facts to make a compelling case.
First, a little background. The timeshare, or vacation ownership, concept became popular after World War II. Details vary based on the company, but consumers make a one-time purchase of an interval at a resort or some other type of vacation location. Often the amount of time purchased is expressed in terms of “points”—a system that allows owners to increase their accommodation options, locations, amenities and other travel services.
Many resorts offer owners the opportunity to exchange their timeshare or may also belong to an exchange company that handles exchanges on behalf of its members. There are now more than 5,300 timeshare resorts in nearly 100 countries, according to the American Resort Development Association.
Gail Mandel, president and CEO of Wyndham Destination Network, definitely sees timeshare as one of the original sharing economies.
“Long before the ‘sharing economy’ was a buzzword, timeshare developers were innovating in the travel space by enabling travelers to enjoy the benefits of using a vacation property without having to purchase the entire vacation home,” she said. “Then, more than 40 years ago, RCI took the sharing concept one step further with the introduction of vacation exchange, which allowed owners to swap their interval for vacation time at another resort.”
Mandel sand that in Europe, some of the company’s vacation rental brands have been offering professionally managed vacation rental properties for more than 70 years.
“So the sharing economy isn’t new for us; it’s the foundation of our business,” she said.
Apples and Oranges
While timeshare and Airbnb-type companies have a number of similarities, there are differences, and those in vacation ownership point to those differences as advantages.
“There’s a consistency of product depending upon who you go with, which has always been important to people, often brand-specific that dictates a certain level of a brand experience and brand standards,” said Ed Kinney, VP of corporate affairs and communications for Marriott Vacations Worldwide Corporation. “[Also] on the plus side is more people are children of timeshare owners than ever before, and as their parents have gone to a new life stage and they’re coming out of their own, they have a positive relationship and experience with the industry.”
According to Mandel, the big advantage that both timeshare and professionally managed vacation rentals have over peer-to-peer listings is hospitality, customer service and safety standards.
“Travelers booking through peer-to-peer listing sites have virtually no guarantees about what they will find upon arrival, who their hosts are, and if the properties meet safety and cleanliness standards,” she said. “Timeshare units, on the other hand, are hospitality businesses at their core. The properties are run and maintained by professionals, have strict standards for what travelers will experience and find in their accommodations, and follow safety regulations and tax laws.
“The average homeowner on Airbnb may not even be aware of these practices, and that can make for some uncomfortable situations.”
Howard Nusbaum, president and CEO of ARDA, said that he believes Airbnb will actually become an important distribution channel for the timeshare industry when listings comply with timeshare standards.
“HomeAway and Expedia are members of ARDA, we have a program through VacayStay Connect where timeshare resorts can list their product on those sites and harmonize it with them, and I think we offer a better environment because you’re not seeing somebody’s family pictures, you don’t feel like you’re invading somebody’s privacy, you don’t have to worry about cleanliness, or health, or safety, and you still get that condo environment,” he said.
The millennial generation, which is now the largest living generation, is intimately familiar with the sharing economy concept, and attracting this generation will be crucial to timeshare’s continuing success.
The timeshare and exchange model is actually quite appealing to millennials, which makes sense when you think about the fact that they are more interested in travel and experiences than past generations, according to Mandel.
“With timeshare, millennials are able to commit to travel experiences each year, and with the added flexibility that has been brought to timeshare in recent decades, they are able to get the varied and authentic experiences they seek,” she said. “We are already seeing the impact: The American Resort Development Association reports that among new timeshare owners, 30 percent are millennials. In fact, new owners are also 10 years younger on average than the typical timeshare owner, which shows that the products are successfully evolving to appeal to younger demographics.”
Kinney said the points-based products have opened up the window a little wider than previously, but he doesn’t think that the millennial audience has really gotten any traction to the point where it’s coming into its own as the older generations are transitioning out.
“We haven’t gotten that audience in quite yet, though it’s starting to open up a younger group that’s buying timesharing because the points, I think, make vacationing a little more possible for them,” he said. “It really depends on as millennials now start to develop family circumstances and have children and those children are able to travel, I think that they will start to come into their own, but the core millennial group is still a little bit too young for that."
Millennial travelers are going to make the timeshare industry stronger, according to Nusbaum.
“There are millennial travelers, in particular, that want the authenticity of staying in a neighborhood and having a cultural immersion experience when they stay in a lodging property and that’s why they like Airbnb,” he said. “I think you’re going to see [timeshare] companies look to replicate some of those things and do it in a better way.”