New research from PricewaterhouseCoopers shows that the timeshare industry is changing with increased interest from branded hotel groups, a greater focus on mixed-use developments and higher quality, more regulated products stimulating fresh interest from consumers.
While analysts and practitioners broadly agree that the old-style, mass market timeshare product is static, demand for higher-quality, branded products and new styles of timeshare such as fractional ownership and condo hotels is strong.
Liz Hall, Hospitality and Leisure research manager, PricewaterhouseCoopers commented:
'Although the timeshare industry in Europe has not provided the investment returns and industry growth predicted 10-15 years ago, it clearly has a role to play in leisure development.
'Increased regulation, more experienced operators and a more informed public have all contributed to changing perceptions and fostering growth in the timeshare sector.
'You just have to look at the increased investment from the branded hotel chains to realise that the sector is quite buoyant at present.'
The research, published in PricewaterhouseCoopers latest 'Hospitality Directions - Europe Edition,' examines the timeshare sector in Europe including new business models, market trends, owners, the resorts, key players, the rationale for investment and typical financial profiles as well as key issues and future outlook.
It reveals that factors helping to change perceptions of timeshare include:
• New product models: the timeshare industry now encompasses fractional ownership schemes, private residence clubs, points clubs, condo hotels and partial hotel conversions as well as 'classical' timeshare schemes, allowing developers and purchasers a greater selection of opportunities.
• New players: the involvement of some of the major branded hotel companies such as Hilton, Marriott, Disney and Starwood in the US has helped raise the profile and credibility of the sector. In Europe, branded hotel groups are also entering and/or expanding their activities for example, Macdonald Hotels & Resorts, De Vere Resort ownership and Sol Melia.
Liz Hall, Hospitality and Leisure research manager, added:
'Many hotel companies have changed their position from regarding timeshare as a threatening competitor to looking at timeshare as an increasingly attractive means of raising additional revenues.'
Despite the renewed interest in the timeshare sector, the research expects steady rather than rapid growth for the sector over the next five years, which is in line with overall travel and tourism growth rates.
Key findings of the research for the timeshare sector in Europe include:
• 1,450 timeshare resorts
• 3.75 million weeks of accommodation
• 1.3 million timeshare owners in Europe in 2001 (latest available data)
• fewer timeshare owners in Europe now than four years ago
• branded hotel groups now entering the market
• quality standards are rising
• perception of the industry is changing
• new models being developed
• regulation is a key issue and is helping improve the industry
Click here to download Timeshare graph. (Word document 763 kb)
Notes:
1. Definitions:
Classical timeshare schemes - the user purchases an interval, typically in multiples of one week, in a holiday property with the right to use the unit each year, typically for a fixed-term of between 20 and 80 years.
Fractional ownership - a concept also associated with the acquisition of business jet aircrafts or boats. Under the terms, the purchaser acquires part-ownership of the equity in a unit within a given property and typically the fractions purchased are divided into larger proportions of a year than with timeshare.
Condo hotels - a further variant on interval ownership is to be found in the condo hotel model. This offers an equity-based ownership of a unit, typically a hotel room, studio or a one or two bedroom apartment within a hotel setting. The unit owner is entitled to a certain number of days usage and also benefits from rental income when the unit is let to other guests.
Private Residence Clubs - this concept is similar to the fractional ownership model and operates at the most exclusive end of the sector, with costs to match.
2. Hospitality Directions - Europe Edition is available electronically as is the full Timeshare article. Copies for the media are available from Rohan Hutchings, PricewaterhouseCoopers on +44 (0) 20 7804 7509 or rohan.t.hutchings@uk.pwc.com
3. Launched in January 2000, PricewaterhouseCoopers Hospitality Directions - Europe Edition is a biannual research journal, with quarterly forecast updates, offering original research on the European hotel industry. The journal draws on PricewaterhouseCoopers economic modelling skills and industry knowledge.
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