Message of the Month

February 2016

This month my update is about a customer’s perception of the hospitality industry. When customers recall quality of service, they sometimes do not compare one timeshare resort with another – they compare timeshare resorts with regular hotels. This comparison is rather common, because customers do make observations during their stay at hotels and timeshare resorts.

So are hotels and timeshare resorts two sides of the same coin? Do customers perceive and difference in the product, services offered, and the overall experience? While there always will be a comparison between regular hotels and timeshare resorts, it is important to understand that the two business models are different. It’s like comparing apples and oranges when you’re looking at a fruit bowl.

Let us look at individual components of these business models and key objectives behind service offerings.

• A hotel makes its revenue between check-in and check-out, while a timeshare resort has a revenue stream that runs its course over 25 years. Since timeshare resorts do not charge room rents they need to supplement their revenue streams with annual maintenance charges and other related fees that can be legitimately billed within the framework of a membership.
• A hotel is not essentially a vacation oriented format – hotels promote and position themselves differently – with a focus on comfort, care and efficiency during your stay. Timeshare on the other hand is a defined vacation format – with holiday destinations that offer a lot more than four walls and a window. Timeshare delivers the benefits of vacation ownership to guests during their assigned annual week.
• Hotel reservations are quite often short stay bookings and one-room check-ins – unless the booking is linked to a wedding or event. Timeshare offers its members a long term of membership and gives customers a feeling of belonging and a sense of ownership. Every year, it is almost like homecoming to your resort – often in a large family group, which is a big plus.
• At the end of your stay at a hotel, you will get a bill towards your room, F&B add-ons and related charges. Owning a week in the year gives the timeshare customer a currency on his vacation week – if he is too busy to go on vacation, he can rent the week for cash, or assign it as a gift to a friend or member of the family. This is another way a timeshare is different.
• As a result of overheads going up every year, along with a rise in the cost of maintenance, hotels do find the need to increase tariffs from time to time. And this is where timeshare scores, because the platform protects the customer inflationary trends right through the tenure of membership - a significant differentiator between the two formats.
• Timeshare resorts also plan around real estate and resources towards extended value additions at their properties. And a lot of outdoor activity comes under that head - extreme sports, river rafting, mountain climbing, trekking and adventure sport for younger members. For the older generation, some resorts in the south offer traditional ayurvedic therapy and health spas – along with visits to tea gardens and spice plantations.
• If you take a closer look at emerging trends in global networking, timeshare promotes the wonderful concept of widening your vacation horizon through arrangements with exchange companies. Timeshare customers opting for exchange options get to experience holidays across the world in a format that’s truly international.

I must clarify here that this article is not about hotels vs timeshare - both formats need to co-exist and allow the kind of space necessary for mutual growth. The global emergence of “mixed use” is another example where two business models have worked together to optimize occupancy and return on investment.

At the end of the day it’s a win-win formula for both hotels and timeshare resorts - they are not competing with each other but are key contributors in the tourism pie. There is enough business going around for everyone.

B. S. Rathor
Advisor & Member - Executive Committee