Timeshare Industry Overview

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Timeshare Industry Overview
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Defined

• Legally timeshare is the right to use vacation
  accommodations and facilities for a stated period
  of time each year over a certain number of years.
  This right to use is either coupled with an
  interest in the underlying real property or not.
• Practically timeshare is the subdivision of
  rooms into slices of time during which the owner
  has exclusive occupancy. Usually, it is into
  weeks 52 a year.

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Demographic spread
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Demographic spread
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Demographic spread
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Demographic spread
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Purpose of Stay
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Activities Pursued
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Purpose of Stay
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Driving Distance
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Satisfaction Level
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Price Value Relationship?
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Satisfaction Ratings
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Where the Customer want to go!
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Where the Customer comes from!
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Where the US Timeshare Resorts are located
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States with Most Timeshare Resorts

• Florida 22.7
• South Carolina 7.8
• California 7.5
• Hawaii 5.5
• Colorado 5.4
• North Carolina 3.8
• Nevada 3.5
• Missouri 3.2
• Texas 3.1
• Arizona 2.8
• All others 34.8

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Number of US Timeshare Resorts
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Key Points

• Timeshare Owners are more likely to
• Have a higher income
• Married
• Hold an advanced degree
• Likes to travel with friends or acquaintances

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Key Points

• Timeshare Owners are more likely to
• Vacation for familial reasons
• Vacation for intimacy
• Stay 4 or more nights at their condo
• Engage in
• Beach related activities
• Snow skiing
• Golf
• Touring and sightseeing

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Key Points

• Perception Differences of Timeshare Owners
• Their product is much better than the hotel
  product
• Believe the TS product is more apt to satisfy
  their vacation needs
• Is a great price-value relationship
• Is higher on the service spectrum

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The Timeshare Owner Prefers

• An upscale product
• Prefers to travel with family
• Are active in their recreational activities
• Take longer vacations
• Believe in their product

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Destination and Feeder Summary

• Top 10 destinations account for 64 of Timeshare
  owner trips
• Top 10 feeder states account for 52 of timeshare
  owner trips
• 50 of the top 10 destination states are also
  feeder states

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Global Industry - Annual Sales
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Global Industry - Resort Locations
United States 37 Europe 29 Mexico 7 So.
America 7 Caribbean 5 SE Asia/Japan 7 South
Africa 4 Australia 2 Canada 2
There are over 5,000 vacation ownership resorts
located in more than 110 different countries.
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Industry Product Characteristics - Unit Type
Studio
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Two bedroom units have been purchased more than
any other size units and are increasing in
popularity. Additionally, single individuals and
households without children are more likely
to purchase smaller units.
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Resort Use Plan

• Fixed Unit/Fixed Interval 54
• Fixed Unit/Float Interval 2.5
• Float Unit/Fixed Interval 3.0
• Fixed Unit/Float Season 1.1
• Float Unit/Float Season 31.4
• Other 8

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Resorts Primary Characteristic

• Seaside/Ocean 24.8
• Regional 17.2
• Golf 14.4
• Snow ski 13.8
• Theme park 10.9
• Lake/River 5.7
• Mountain/natural setting 4.6
• Other 4.6
• Casino/Gambling 2.9
• Urban 1.1

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What is a Vacation Ownership or Timeshare?

• It is similar to a hotel in that
• The more advance notice you give with your
  reservation, the more likely you will get the
  week you want (typically a year in advance of
  when you want to vacation)
• You wouldnt necessarily be in the same room from
  year to year, so you dont store any of your
  personal belongings there
• Helpful, friendly staff welcome you and answer
  questions, and there are amenities available to
  make your stay more enjoyable (these include
  pool, food beverage, convenience store and an
  activities area for the young and the young at
  heart

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What is a Vacation Ownership or Timeshare? contd

• It is different from a hotel in that ...
• There is much more space and functionality than a
  hotel room, because the size and layout are like
  a condominium apartment. Your living area would
  typically include two furnished bedrooms, two
  bathrooms, a kitchen, living room and balcony and
  would sleep six to eight people

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• Also, you pay the purchase price in advance for
  the right to use your unit-week and you are
  considered an owner. You may own a deeded real
  estate week (forever), a real estate interest
  (long period of time), or allotment of points to
  you use over time (forever or a long time)

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• You may finance your purchase and interest cost
  may be tax deductible as a second home

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• Uniquely, you have a option of exchanging your
  time for a similar unit-week at another resort
  from a choice from thousands of resorts
  worldwide, renting your week or exchanging your
  week for allotment of points that may be used
  for various leisure purposes

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• There are various fees connected to timeshare
  ownership. A maintenance fee is due each year of
  ownership to pay for day-to-day management and
  maintenance of the resort real estate taxes
  exchange company membership and other special
  use rights such as lock-offs, split weeks and
  daily usage if applicable.

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• Generally speaking, the economics of a consumer
  purchase of vacation ownership becomes more
  favorable than hotel stays or renting after 5 to
  7 years of ownership

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Marriott Firsts

• Marriott entered business with the acquisition of
  American Resorts in 1984
• Set the industry standard of highest quality
  resorts and management.
• Expanded from Hilton Head to the South, West and
  North United States and Europe providing our
  owners a proprietary system of resorts and
  variety of locations and experiences
• Adapted a brand name Marriott Vacation Club
  International in 1996 to reflect our growing
  diversity and richness of our product portfolio

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• Standard Product
• Two bedroom / two bath villas
• Prepaid deeded ownership or right to use
• Seasonal and site price variances
• 8K/week to 55K/week

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• Varying amenity packages
• Appealing to wide range of lifestyles
• Golf, Skiing, Tennis, Nature, Sun, Swim,
  Nightlife
• Onsite Activities Programs
• Food Beverage MarketPlace, Pizza Hut, TCBY

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• System access and flexibility (Marriott Rewards)

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Located in the Worldsmost prestigiousdestination
s
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Villa Amenities
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2 Bedroom Lockoff
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Villas Range From...
900 to 1,700 sq.. ft.
Studios to 3 Bedrooms
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Villa Amenities

• Full size Gourmet Kitchens
• Large Multiple televisions with VCR

• Living/Dining areas
• Master Suites with oversized whirlpool spa
• Private Patios and Balconies
• Gas-log fireplaces

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Product Segmentation Continues to Evolve
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Industry Dynamics Are Changing

• Stratification by size is occurring
• Industry appears to be segmenting into a few key
  players at the top, and everyone else
• Mid-sized players appear to be caught in the
  middle - seeking affiliations
• Product segmentation becoming more apparent
• Ownership benefits expanding through partnerships