The industry has improved, but are they right for clients?

Don't be shocked if a client approaches you about buying an interest in a nine-bedroom Miami Beach castle, complete with a shark-filled moat and gargoyles. The price of a membership, starting at $1 million, includes access to a chauffeur-driven Bentley and Jaguar convertible. In fact, a membership proposal for "The Castle" recently was being prepared for rock singer Ozzie Osbourne.

Or perhaps your clients would prefer a "fractional" at the Ritz Carlton Club, complete with a concierge staff and airport pickup. At the club in Jupiter, Fla., your client may have a private splash pool. In Aspen, Colo., perks include a ski valet service and locker room. Membership packages at Ritz-Carlton Clubs, now at four locations, range from $98,000 to $490,000 for 21 to 35 days.

Welcome to the new world of timeshares. Actually, today's purveyors of timeshares cringe at the term, which carries the tainted image of bad investments, bankruptcies and high-pressure sales.

They prefer to call their offerings, "vacation ownership," "vacation clubs," "shared ownership" or "private residence clubs." The term, "fractional," refers to what may be the fastest-growing segment of the timeshare industry: longer-term vacation ownership, typically of one month or more. Today, time ownership may be significantly longer than the typical one-week period, and accommodations may be more luxurious than hotels. They often allow purchasers to trade time at other resorts or for other services.

One thing is certain: Experts say timeshares have become the bright light of the travel industry during the latest recession. On the whole, the travel industry has grown an average of 5.7% annually since 1994, according to the Travel Industry Association of America in Washington. In 2001, it was up just 2%.

By contrast, timeshares grew at a 14% to 17% annual clip in the 1990s, says Jason Tostevin, spokesperson for the Washington-based American Resort Development Association. That dropped to 6% to 7% in 2001. "It's not the light-speed clip at which it was growing before," Tostevin admits, "but it's also significant growth in a year when individual companies had a lot of trouble."

Jake Fuller, hospitality and leisure analyst with Thomas Weisel Partners, a New York-based investment bank, cites a few reasons for the timeshare industry's attractive growth:

Timeshares previously were built for some other purpose, such as condominiums, for example, and converted to timeshares when they didn't sell. Today, many of the timeshare resorts actually are designed as timeshares, with the ultimate luxuries from the onset. In fact, Cendant Corp.'s Fairfield Resorts has a special prototype warehouse in Florida where it can test what potential clients might want in timeshares. Some timeshares, such as Disney's, are tied in with theme parks.

Exchange networks-the largest are RCI, a Parsippany, N.J., division of Cendant Corp., and Interval International in Miami-can help owners trade their time for some at another resort. In fact, another unit of Cendant Corp., the Abercrombie & Kent Registry, also in Parsippany, allows timeshare trades for such unusual items as Super bowl tickets.

Legitimate branded companies-namely major hotel chains-dominate the timeshare industry today.

First « 1 2 3 4 » Next