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Capital One: Timeshare Professionals Expect Stronger Demand for Points-Based Products in 2016

June 23, 2016, 07:36 AM
Filed Under: Travel and Leisure
Related: Capital One

More than 95 percent of timeshare industry professionals expect consumer interest in the timeshare market in 2016 will be stronger or on par with the past year, according to the fifth annual Vacation Ownership Survey by Capital One. Nearly three-quarters (74 percent) of those surveyed believe consumer interest in timeshares will be stronger in 2016 — 26 percentage points higher than last year’s survey — and 23 percent expect interest will be on par with the past year. Only three percent anticipate a decline in consumer interest. The survey was conducted at the American Resort Development Association (ARDA) World 2016 conference in Hollywood, Florida.

Nearly two-thirds (64 percent) of industry professionals expect points-based products to generate the most interest in the next year — 14 percentage points higher than last year’s survey — followed by right-to-use ownership (28 percent).

More than half of respondents (53 percent) expect beach properties to generate the highest percentage sales growth in 2016, followed by urban properties (26 percent) and theme park properties (10 percent). Fewer respondents expect island properties (9 percent) and mountain-based properties (2 percent) to lead growth.

“We’re encouraged by the strong consumer sentiment and interest in points-based vacation ownership as well as beach properties,” said Jim Casey, Senior Vice President and Managing Director of Capital One’s Vacation Ownership Lending group. “Our Vacation Ownership team has a successful track record of partnering with timeshare companies across market cycles and can provide a range of financing solutions to help them reach their short- and long-term business goals.”

Sixty percent of those surveyed expect working capital loans to be most important type of financing for the industry in the next year, more than double the 27 percent response in last year’s survey. Twenty-six percent of those surveyed identified inventory financing as their top priority. Fewer respondents expect that construction and development lending (9 percent) and receivables financing (5 percent) will be most important in 2016.
Respondents identified rising interest rates (42 percent) and sales and marketing costs rising (24 percent) as the top challenges for the timeshare industry this year.

“Since starting the Vacation Ownership Survey in 2012, we’ve seen the industry’s optimism and resilience outweigh worries about liquidity or the broader economic markets,” said Tom Meyerer, Investment Officer of Capital One’s Vacation Ownership Lending Group. “Investors and consumers should be confident in the industry’s health and stability.”

Half of respondents expect the trend of developments in overseas and emerging markets to gain the most momentum in the next year, 30 percentage points higher than last year’s response. Other trends gaining momentum include attracting millennial vacationers (19 percent), renovating existing properties (15 percent) and building new, luxury developments (14 percent).

Capital One conducted the Vacation Ownership Survey on May 2-3, 2016, at the ARDA World conference in Hollywood, Florida. The survey gauged the sentiment of the resort development and timeshare landscape in the next 12 months. Percentages are based on 106 responses. Capital One’s Vacation Ownership Lending group provides receivables, inventory and working capital loan facilities to timeshare operators across the United States, Caribbean, Mexico and Canada.

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