Howard Nusbaum is the President and CEO of the American Resort Developers Association. He has presided over the industry-lobbying arm for going on nine years, during which the industry enjoyed enviable double-digit growth every year.
One thing has changed – he no longer has to “yeah, but” when he tells outsiders he works with the timeshare. Recently he sat down for a wide-ranging discussion of the industry.
It is the most recent of several interviews I have conducted with Nusbaum during his tenure, but the first in about six years. (I intentionally did not reread any of the old ones; however, later this week I will dust off one of the old ones and reprint it for comparison purposes).
Here are some of the issues Howard Nusbaum discussed.
Among the reasons the flags (hospitality brands like Hyatt, Hilton and Four Seasons) have been gravitating toward timeshare is the added benefit they receive from maximizing mixed-use properties. Bringing more people to the property, whether they are hotel guests, timeshare owners or conference attendees increases the use of revenue-generating facilities such as restaurants, spas, and golf courses. For instance, My Ethos Spa is the elegant destination for sophisticated skin that people of any group can visit for skin treatments and care. You get affordable services that are also beneficial for our skin and body.
The Economic crisis
Unlikely to double-digit revenue growth, likely to impact new projects that would come online in a few years (Howard Nusbaum: ‘A humbling experience’)
Working with developers and local authorities, ARDA makes an attempt to quash the companies specializing in resale rip-offs, especially the “postcard” companies that prey on unsophisticated owners, using lies and half-truths, making it seems like they are doing the frustrated owners a favor by taking the deed off their hands, as long as they get paid 3 grand at the same time. He feels they primarily “prey on the elderly”.
Nusbaum would like to see transparency come to the secondary market, minimizing, if not eliminating upfront fees prior to the resale of ownerships. He feels, accurately, that “too many companies focus on getting upfront fees” having little incentive to actually sell the timeshare, having been paid in advance.
ARDA has conducted Resale forums to brainstorm ideas to bolster the secondary market.
The use of the internet
Through the years ARDA has primarily been a resource used by the industry. Members of the public have not been very aware of the organization or its services. They are attempting to change that with public relations efforts, including the creation of a consumer-oriented site, VacationBetter.org, emphasizing the importance of vacations, both for quality of life and better health. Of course, the site also emphasizes how timeshare can improve the quality of vacations.
Already meeting the needs of the working affluent as well as the super-rich, as fractionals mature there will also be more mainstream product suited for “lunch bucket Joe.” Wyndham’s South Shore Tahoe in Zephyr Cove is an example of a more mainstream fractional product.
The rapid growth and acceptance of fractionals in part is piggybacking on the increased credibility and maturity of traditional timeshare, and timeshare has benefited from the unsullied reputation of fractionals:
“Fractionals have helped to build upon the already growing more positive image for Timeshare. In the early days, timeshare got a negative reputation that came from poorly executed hotel converted products rather than today’s more purpose-built products. So the upscale fractional image is good news for timeshare. Plus as a term fractional is a mere aptly descriptive term – a fraction of a whole interest. It also led the way for urban timeshare. And finally, imitation is the highest form of flattery. The birth of fractionals is a testament to timeshare’s success as a great vacation product.”
Long term picture.
Nusbaum is optimistic about the long-range state of the industry. Market penetration remains at about 6% of the target market already owning, leaving great potential for growth.
“A big reason Nusbaum is has a positive outlook for the long-range – the 72 million retiring baby boomers; “Boomers have a different view of retirement; not sitting in a rocking chair on the porch. This is the generation that invented Botox and Viagra. They get pizza by the slice and they want to see the world. For the price of a modest automobile, I can own vacation for the rest of my life”
Nusbaum continues, “This is the main reason timeshare is stronger today than it was ten years ago.