Time Share Growth Shifts to the West

As major hoteliers look to their burgeoning timeshare divisions to offset declining profits, many companies are focusing new development in the West.

By: Lisa Jennings

As major hoteliers look to their burgeoning timeshare divisions to offset declining profits, many companies are focusing new development in the West.

California, Colorado and Hawaii now rank among the nation’s five biggest timeshare markets, propelled by developers seeking to capitalize on the region’s climate, year-round appeal, beaches, and ski and golf destinations within driving distance of major cities.

And the boom is expected to continue as more of the major hotel brands expand their timeshare offerings. In 2002, Marriott and Cendant became the first hotel brands to top $1 billion in timeshare sales.

The hotel brands are also increasingly moving to educate agents about timeshare as a lodging option. Many hotel brands rent unsold timeshare units, and owners sometimes offer their intervals for rent.

Marriott, for example, offers the same commission structure for agents booking timeshare rentals as they do for hotel rooms. The brand’s timeshare units rent for an average of $350 to $375 per night, and the length of stay is typically longer than at a hotel.

Also, agents don’t have to worry about their clients being forced to listen to timeshare sales pitches.

“We don’t intrude or do anything to impact their stay from a marketing standpoint,” said Ed Kinney, senior director of brands and public relations for Marriott Vacation Club International, one of the largest timeshare companies.

While no figures are available for regional timeshare sales, worldwide sales have grown an average of 12 percent each year since 1990, according to Cendant, one of the dominant companies in the industry.

And U.S. sales last year totaled $5.5 billion, up 14 percent over the previous year despite a general downturn in travel, according to Ragatz Associates, Cendant’s market research agency.

The average price for a week of annual use is about $14,800.

The growing appeal of timeshare, particularly after the Sept. 11 terrorist attacks, stems from the “fundamental philosophy of people putting a higher priority on family time together,” said Kinney.

In the West, experts say the hottest markets are Las Vegas, Hawaii and Palm Springs, Calif.

Las Vegas

Once seen as a sleeper, timeshare has taken off in Las Vegas over the past five years as the city has become a desirable destination for more than just gambling.

“Five years ago Vegas was a $100 million timeshare market. Our estimate now in 2003 is that it’ll be a $350 to $400 million market,” said John Sweeney, executive vice president of RCI Consulting in Las Vegas, a Cendant company.

When the major casinos start building timeshare units, “Las Vegas will surpass Orlando as the timeshare mecca of the world,” predicted Sweeney, who added that most of the major casinos in the city have “shelf plans” for timeshare development.

Orlando has an estimated 43 timeshare resorts, and Vegas has 24, said Sweeney. But like everything in Vegas, the timeshares tend to be bigger, bringing in more units per resort.

In Vegas, Hilton is the dominant hotel brand in the timeshare market. If completed as planned, the Hilton Grand Vacations Club on the Las Vegas Strip, Hilton’s third timeshare property in Las Vegas, would ultimately house 1,500 units in four buildings. The first phase, with 283 units, is expected to open later this year.


Last month, Starwood Vacation Ownership Inc. opened the first phase of the Westin Kaanapali Ocean Resort Villas, a 280-unit beachfront property on Maui, and all 103 villas have been sold. Starwood also is developing another timeshare on land it bought in Princeville, Kauai.

Hilton, which operates two Grand Vacations Club timeshare resorts in Hawaii, has announced plans to transform six floors of its Kalia Tower at Hilton Hawaiian Village in Waikiki into 72 studio and one-bedroom timeshare units.

Timeshare makes up only about 6 percent of Hawaii’s lodging market, said Mitch Imanaka, chairman of American Resort Development Association in Hawaii. But timeshare sales in Hawaii have grown about 25 percent annually for the past five years. “I would expect within five or 10 years to see the inventory double,” said Imanaka.

“I don’t believe you’ll see another stand-alone hotel built in Hawaii without a timeshare component,” he added.

Palm Springs, Calif.

Marriott is the leading brand in the Coachella Valley, where most of the nine cities that make up the greater Palm Springs area are home to timeshare resorts. Marriott has three resorts in the region, the newest being Marriott’s Shadow Ridge in Palm Desert.

When construction is finished next year, the resort is expected to have close to 1,000 villas.

Marriott’s other two timeshare properties adjacent to the J.W. Marriott Desert Springs Resort and Spa -- Desert Springs Villas and the Desert Springs Villas II -- are both sold out.

This year, Starwood also opened the first phase of the timeshare development at Westin Mission Hills Resort & Villas in Rancho Mirage with 56 of the planned 158 units.

Trendwest, a division of Cendant that has developed 48 timeshare resorts, mostly in the West, is also expected to announce plans for a new property in the Palm Springs area.

Arizona Timeshare Market Also Strong

Arizona is another Western market where timeshare developments are growing.

Among recent developments, Hyatt Vacation ownership last month opened the Hyatt Pinon Pointe in Sedona, the brand’s 10th timeshare property. The first phase offers 75 units, as well as an activity building with media room, exercise room, spa and children’s camp.

The Westin Kierland in Phoenix, scheduled to open next year, will be Starwood’s third timeshare property in Arizona. The timeshare resort will share grounds with the Westin Kierland Resort and Spa.