Wyndham Sundara Cottages at Wisconsin Dells, in Wisconsin Dells, Wisc. is a Wyndham Vacation Ownership property.
While the dawn of a new year brings glances toward the horizon for the next big thing, there does not seem to be any real threat of a game-changer anytime soon in the vacation ownership industry, according to industry executives. Trends in the industry point to a continued gradual rebound from the lows the industry experienced in Q4 2008 and throughout 2009, according to the American Resort Development Assn.
The most recent performance data speak to this current environment. In 2012 (the most recent annual data available), the industry reported a 6-percent growth in sales volume, which was the largest increase seen since the downturn, according to the State of the Vacation Timeshare Industry: United States Study, 2013 Edition.
The closest contender as “an issue to watch,” it seems, is Airbnb, and even that it is not considered a long-term player, according to Brandon Springer, a multi-unit resort manager for Wyndham Inn at Glacier Canyon, Wyndham Sundara Cottages and Tamarack Resort for Wyndham Vacation Ownership, who also is a contributing author for The National Center of Generational Studies.
Airbnb, which was founded in 2008 in San Francisco, is an online community marketplace for people to list and book accommodations online or from a mobile phone in more than 34,000 cities and 192 countries.
“I can’t sit here and consider that even in three to five years that Airbnb is a player, with its lack of centralization and standardization,” Springer said.
In the short term, the picture for single females ages 18 to 25 is challenged by Airbnb, Springer said.
“For the buying trends in vacation ownership, that’s your bread and butter,” he said. “Newly married females drive vacation ownership business and buying decisions in the household. Airbnb is much more ‘right this moment,’ but long term it’s not a player. In the short term, in the next one to three years, it is a direct competitor with vacation ownership, because our sales are often driven by younger females in the household. However, the desire for vacation ownership increases with family or marriage.”
But the lesson is still there. As Franz S. Hanning, current chairman of ARDA, said in a recent column in Developments, ARDA’s publication: “While some companies only live on in memory, we shouldn’t miss the important lesson left in their wake: lacking the vision to transform as the marketplace evolves will undoubtedly lead us to a similar fate. We must continue to raise the bar and aggressively develop new and innovative products and services that appeal to the ever-changing needs of the next generation.”
Despite the buzz surrounding Airbnb, the more eminent challenge is not so much the unforeseen competitor as it is addressing the need for new customers that are becoming increasingly sophisticated in a post-downturn environment.
Howard C. Nusbaum, president of ARDA, said: “The challenge is, how do we begin now to introduce vacation ownership to new customers without introducing a sales and marketing creep? During the financial crisis, the industry did a better job of refining the fundamentals and there are now green sprouts for attracting new owners.”
The days of cold calls are gone, but the message hasn’t changed, he added. “It’s not a change in the sales pitch, but we can’t afford to spend thousands of dollars on speaking to the unwashed masses. That is not efficient and sustainable. We are now using new media to touch people.”
Entrepreneurship in the DNA of the vacation ownership industry is an important lifeblood, he added.
“Today, there is less capital to fund those sales, the industry is more profitable in each sale and selling is more sustainable,” Nusbaum said. “We are doing better than ever with the hospitality management company aspect of delivering that dream vacation. The arbitrage on loans is now ancillary income and it’s all about service.”
In vacation ownership we see a huge opportunity to market to millennials, Springer said.
“Even for ages 35 and younger,” he said, “we have a desire to travel, not to just stay in a room, on an annual basis.”