Access to Financing Remains Top Challenge for Timeshare Industry
Access to financing was cited by 41% 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% 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%) and increases in new, luxury developments (8%). Interest in affordable developments showed sharp growth; 18% of respondents expect growth in new, economical developments to be the biggest trend this year, more than double the 7% 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% of industry professionals see improved consumer interest in the timeshare market — more than double the 21% response from last year. Only 6% anticipate a decline in consumer interest.
Forty nine percent of survey respondents expect timeshare sales to be stronger than last year, and 48% anticipate sales to be on par with 2013. Last year’s survey revealed a more optimistic sales forecast — 78% of those surveyed expected stronger sales than in 2012.
The majority (58%) of timeshare professionals expect the Florida market to be the most competitive this year, followed by Nevada/Las Vegas (28%) and California (12%).