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Capital One: Access to Financing Remains Top Challenge for Timeshare Industry

June 12, 2014, 07:16 AM
Filed Under: Hotel & Resort

Access to financing was cited by 41 percent of industry professionals at the American Resort Development Association (ARDA) World 2014 conference as the top challenge in the timeshare industry this year, according to the third annual Vacation Ownership Survey by Capital One Bank.  In addition, 46 percent of industry professionals expect working capital to be the most important type of financing this year – a dramatic jump from only 4 percent in 2013.

“For the third straight year, timeshare professionals at the ARDA World conference have identified access to financing as the top challenge for their businesses,” said Michael Szwajkowski, Executive Vice President, Capital One Bank’s Commercial and Specialty Finance Business.  “Our Vacation Ownership team works directly with timeshare companies to customize financing solutions that will help them remain ahead of the curve in this competitive market.”

Half of industry professionals surveyed expect the trend toward renovations and modernizations of existing properties to gain the most momentum in 2014, compared to other industry trends such as developers moving to new/emerging markets (22 percent) and increases in new, luxury developments (8 percent).  Interest in affordable developments showed sharp growth; 18 percent of respondents expect growth in new, economical developments to be the biggest trend this year, more than double the 7 percent response in 2013.

“We found more interest in providing affordable options for the vacationing population this year than in prior years, as timeshare professionals expand their customer base beyond luxury vacationers,” said Jim Casey, Senior Vice President, Capital One Bank’s Commercial and Specialty Finance Business. “This could be a positive signal for the economy, as affordable developments become more accessible to the general population.”

Similarly, 57 percent of industry professionals see improved consumer interest in the timeshare market, more than double the 21 percent response from last year. Only 6 percent anticipate a decline in consumer interest.

Forty nine percent of survey respondents expect timeshare sales to be stronger than last year, and 48 percent anticipate sales to be on par with 2013. Last year’s survey revealed a more optimistic sales forecast – 78 percent of those surveyed expected stronger sales than in 2012.
“Industry expectations for sales could be related to increased concerns regarding investor interest, as 15 percent of professionals identified investor interest as a challenge for new developments,” Szwajkowski added. “Capital One Bank aims to lessen concerns regarding new developments by providing a spectrum of financing solutions that can help timeshare companies capitalize on increased consumer interest in the industry.”

The majority (58 percent) of timeshare professionals expect the Florida market to be the most competitive this year, followed by Nevada/Las Vegas (28 percent) and California (12 percent).

Notes on the Survey: Capital One Bank’s Resort Development Survey was conducted on April 7-8, 2014 at the ARDA World conference in Las Vegas, Nevada, to gauge emerging trends and industry insights for the coming year.  The survey was conducted by Capital One Bank’s Vacation Ownership Group, which provides receivables, inventory and working capital loan facilities to timeshare operators across the United States and the Caribbean. Percentages are based on 105 responses.

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