“Revenue generation and travel clubs” was the topic of a recent Timeshare Board Members Association Conversations Series Webinar. Travis Bary, Capital Vacations’ chief operating officer, and Matt Brosious of Owner’s Travel Club (OTC), pictured above from left, joined Shep Altshuler, TBMA president, for this discussion.
Following are edited highlights:
The first part of the conversation focused on the current timeshare resort environment, and the challenges facing timeshare owners’ associations as they are asked to take back weeks due to the pandemic or inability to execute their rental and sales programs.
Bary: We are focused on the collection rate at each resort, to determine what percentage of owners are paying their maintenance fees and how the HOA’s budget could be impacted. At two resorts we manage, a company that owns over 50 intervals has given notice that they wish to return those intervals to the HOA. That could greatly impact resort financials.
Luckily for us, we have a large sales organization, so we are able to help those associations sell that inventory and receive those needed maintenance fees. Our advice to association boards is to vet the service companies with which they do business. Request references from other boards with which the vendor has been servicing.
Brosious: We’re in a difficult business environment. The stock market may be roaring, but in our little corner of commerce, in associations dealing with owner delinquencies and rentals, we have a lot of challenges. Deal with companies that will be there for the long run. The lower-risk, higher-success formula, dealing with a proven company like ours or Capital Vacations, can help you meet your goals.
An owner going on vacation and paying the maintenance fee is the best use for a timeshare unit. Rental is the second-best use, but during the pandemic, the world fell out, with a major impact on rentals.
Many owners have lost sight of the value of their timeshare. They may be older. They may no longer want to use their timeshare. Their kids may have grown up. For those who still want to participate, we can offer benefits to encourage them to use their timeshare. If they just want to exit, Capital Vacations has a credible deed-in-lieu program and other resale programs.
Before taking back a large number of weeks, contact me because with our sister company, RCI, we have the resources to take on inventory and may be able to help.
New ideas
When dealing with multiple properties, different types of destinations, seasonality, and other unique challenges, a one-size resource or solution doesn’t fit all.
Bary: All resorts and HOAs have unique challenges and opportunities that require tailored management plans. The common theme we hear is the need to take care of the existing owners and ensure that the resort can be used like it always has. We believe in the need to celebrate a resort’s legacy past and long-time owners while protecting/updating the physical asset and finding new owners to replace any delinquency. We also see the most engaged boards with an eye on the future and open to innovation as the most successful.
Owner’s Travel Club
Brosious: Last year we developed Owner’s Travel Club (OTC) for independent HOAs and resort managers. Owner’s Travel Club helps re-engage and rewards loyal owners with a travel-club platform that offers membership-based access to low-cost, high-value travel rewards, so members can access over 600,000 accommodations worldwide. This includes branded accommodations, resort condominiums, vacation homes, and timeshare weeks for rent—all at rates 60 percent or more below those of online travel agents.
In addition, we provide revenue management and rental consulting, and some additional benefits that can enhance the association.
Vacation and travel club differences
What are the differences between vacation clubs that may be acquiring inventory or a travel club that is leasing inventory, and differences in regulation?
Bary: Vacation clubs operated by such companies as Capital Vacations, Marriott, or Wyndham Destinations are acquiring or building inventory. They are highly regulated, with oversight from federal and state governments that offer consumer protections. Travel clubs are geared more to short-term engagements that utilize rented inventory. They are not as regulated, and in some places not regulated at all.
Those are the two real differences. Both can be good. Generally, travel clubs offer some additional travel benefits: access to airfare, hotels, and such. Now, most vacation clubs do that, too.
Brosious: OTC is a membership-based travel service, with inventory similar to that of leading online travel agents—hotels, condominiums, car rental, airfare, activities, the whole gamut of travel options for vacation planning.
Also, OTC offers last-call resort and condominium inventory to our members, so they can take advantage of lower costs than what they could normally find online.
Marketing these programs
How are these programs being marketed? How is OTC collaborating with resorts, and what are the benefits for owners?
Brosious: Owners Travel Club is part of Panorama Travel Solutions, the B2B affinity travel group of Panorama, a division of Travel + Leisure Co. We’re working directly with associations and resort-management companies to provide access to our tools, which they can pass on to give benefits to their owners and generate revenue for the resorts.
Loyal owners who are in good standing get $1,500 in owner dollars, which they can use for travel at rates below the lowest online rate. They can activate risk-free access to the OTC site, look at the travel values, claim their owner dollars, and explore at no cost.
If they want to redeem their owner dollars savings, backed by our best-price guarantee, they book their travel and pay a $99 membership fee as part of the first transaction. That’s a bargain if they’re planning a family vacation and saving $1,000 or more. Then the association receives a revenue share from the annual membership fees, and this can be substantial.
This has nothing to do with the owners using their week. They can still use, exchange, or rent their week.
Also, OTC offers airfare, car rentals, and activity and excursion vendors, tickets to Las Vegas shows, helicopter tours, and more. Owners can plan in advance and pay at a discount.
The association pays nothing to provide the program, and getting started is simple. Just sign an affiliate agreement and send out a postcard or e-mail on OTC’s behalf. If members sign up, we pay a commission to the association. We protect the owners’ privacy, and of course we won’t market any other products to owners who join.
Owner’s Travel Club participation basics
When owners receive the postcard or email, it will include a URL and a promotional code. They can type that information into their browser or click on the link in the email, go onto the site, gain risk-free access, claim their $1,500 owner dollars, and decide whether they want to use the site.
Owners with multiple weeks can have a lot of travel savings. They can gift those to friends and family, or use them later on, for business travel or leisure travel.
OTC is co-branded with your resort’s name, so when owners come to the site, they’ll see your resort and know they’re in the right place.
In addition, we can white-label the site for larger management companies and brands that wish to provide their own service, offered under their own travel club rather than OTC.
Additional programs
The programs we offer independent resorts and management companies at Panorama Travel Solutions help simplify operations, improve service levels, increase revenue and reduce costs.
We offer association and owner rental programs, through another product we offer called optiREZ (www.optirez.com), which has been built out of the revenue management and rental capabilities from RCI, where there’s a lot of knowledge and capability to assist resorts in optimizing the revenue that they get for rentals. During a free consultation on the overall revenue management of your resort, we analyze its performance, and make specific suggestions on working with us for distribution and ongoing services.
We can also provide one-stop access to hundreds of online travel agencies (OTAs.) The OTAs are great 30 days out, but for inventory three or four months out, we can find renters for that inventory through RCI and Extra Holidays. You’ll pay a lower commission and get a higher rate than through the OTA channel. I know Travis’ business has a whole department that deals with this as well. It’s a science and an art. We’ll be happy to discuss that service with interested associations.
We also provide Viewpoint PMS, a comprehensive cloud-based property management system for legacy resorts.
Capital Vacations programs
Companies serving the legacy community today must show that they can endure and innovate, helping resorts generate revenues to fund their budgets and sustain operations.
Bary: We serve over 160,000 owners, so we feel a responsibility to offer great service to them and their associations. We are sharing information on the 2021 delinquency rate with our boards and encouraging them to look deeply at that data. I am very optimistic that we will have a great last three quarters of the year. We see very strong reservation demand by owners and renters as we have moved to spring. The pent-up consumer demand to travel that many people predicted appears to be very real.
Capital Vacations has been serving the legacy timeshare community for 42 years. We manage 68 associations in the U.S. and Caribbean. Over the past several years, we have built a great internal team to provide whatever services associations may need, so that we can be the point of contact for any issue or opportunity that arises. In addition to expanding our service offerings, we are focused on helping the associations engage their owners. We believe the more engaged an owner is and they use their ownership, the more likely they are to remain happy, recommend their friends, maybe even purchase more. One key item for owner engagement is communication. With this in mind we have updated all of our resorts’ websites and made them mobile-friendly. In today’s world, people expect to have information 24/7, see things online, have owner portals, and contact with a brand communications team.
We are always looking to offer our services to additional associations. Recently we welcomed Paula and Michael DiPaola and the properties they manage—Magic Tree Resort, Sea Club IV, and Calypso Cay—into the Capital family.
The Capital Advantage
The days of just putting your inventory up for rent on the OTAs (Booking.com or Expedia) or selling inventory with one agent in your lobby are past. Rental and yield management have become far more demanding. Resorts can benefit greatly by being with a larger company that can properly yield their available inventory in real time, ensure their inventory has optimal placement on the OTAs, and create direct bookings to avoid the OTA fees. Sales and creating new owners for your HOAs require significant marketing budgets, with most new sales requiring $5,000-$8,000 per sale in marketing and sales costs.
We call our revenue generating services the Capital Advantage. What sets us apart is our robust marketing and sales organization. In 2020, we sold over 5,500 association-owned intervals. We can sell inventory and create new maintenance fees for associations with that need.
Sales – We offer a guaranteed sales solution. We enter a marketing and sales agreement with our associations, and whether we sell the inventory or not, we guarantee the future year’s maintenance fees. That allows associations to budget for the increased revenue and be confident that it will come.
Rental – We also offer a rental guarantee. We review a resort’s rental revenues over the previous three years and form a projection. For all the resorts on the program we have been able to offer increased rental revenues, guarantee them, and pay that money monthly. If there is an upside over the guarantee, we will pay part of it to the association.
Inventory – We also help our member associations create salable inventory. Some may have hundreds of delinquent intervals. We have deed-in-lieu teams, and bulk agreements with lawyers for better foreclosure rates.
Capital Exchange
We have our own international exchange network, Capital Vacations International Exchange, backed by an agreement with RCI. For a very nominal fee to the associations we manage, we offer Capital Exchange to all of their clients. Generally, only 20 to 30 percent of legacy members have an active exchange relationship due to the yearly cost. This limits the options an owner has to use their ownership.
With Capital Exchange we offer an array of benefits, some of which are reduced exchange fees of $79-$169, an increased banking period of five years, and travel use protection, so if a trip gets canceled, we will protect the week and its exchange fee.
In addition, we allow our managed associations and owners in Capital Exchange to convert their weeks through a program, Capital Cash, for use in hotels, rail excursions, cruises, etc., to provide more options for those intervals and to share them with friends and relatives.
For free consultation, board members are invited to contact:
Travis Bary, Capital Vacations, tbary@capitalvacations.com
Matt Brosious, Owner’s Travel Club, matt@ownerstravelclub.com
For further information, visit tbmassoc.org