Timeshare

Transcription

Timeshare

Australian Timeshare and Holiday Ownership Council
Timeshare
Holidays Forever - Growing Regional Tourism
The economic significance of the Australian
timeshare and holiday ownership industry 2004/2005
Executive Summary
Executive Summary
There has been a clear resurgence in the timeshare industry in Australia over the past 5-6 years. The
number of timeshare owners has increased by 50% to more than 125,000, the number of resorts has
increased from 57 to 73, and the average annual net sales of timeshare has grown to $173 million.
Overall, the industry has recorded average annual growth of 10%, making it the fastest growing segment
of Australia’s tourism industry. Globally, timeshare has grown at an even faster 12%, outlining the growth
potential for the local industry. Added to this, the Australian industry records one of the world’s highest
satisfaction rates amongst timeshare owners.
This study represents the first economic significance
The timeshare industry impacts the economy in a number
study of the Australian timeshare industry. It highlights
of ways. The purchase of timeshare by consumers
the size and significance of the sector to the national
cycles through the economy via the purchases of
economy, and each State and Territory economy,
inputs made by timeshare and other service businesses
paying particular attention to the regional economic
from a variety of other industries in the form of goods
significance of timeshare. More than 96% of all
and services, supporting jobs in these industries, and
timeshare resorts in Australia are located in regional
supporting additional rounds of purchases. Meanwhile,
areas outside capital cities, while almost all head
the employees holding direct jobs spend a portion
offices of timeshare companies are also located
of their income on goods and services from other
in non-metropolitan areas. This means that the
economic sectors.
economic significance of the industry is almost wholly
ii
concentrated in regional areas, providing much needed
For example, the purchases of timeshare by consumers
economic growth and employment in local economies.
feeds into construction expenditure for new timeshare
There are particular cases, highlighted in this study,
resorts, into sales and marketing expenditure at
where the local significance can “make the difference”
corporate and sales offices, employing thousands of
to the sustainability of a local regional economy.
employees in these areas. The maintenance fees paid
Timeshare: Holidays Forever Growing Regional Tourism www.athoc.com.au
Executive Summary
of people directly. Many timeshare owners spend money on exchanging their timeshare, employing
hundreds of workers at exchange companies. When timeshare owners then go on holidays, they spend
money in the local economy on transport, meals, drinks, groceries and activities, employing many people
in related service industries. Because timeshare owners have higher disposable income and have already
paid for their accommodation, they commonly “yield” more to the local economy.
Overall, the direct output of the timeshare industry
Direct employment of 3,675 FTE employees
includes approximately $173.2 million in purchases of
plus indirect employment of 2,111 FTE employees,
timeshares, $57.7 million of spending on maintenance
resulting in a total of 5,786 FTE employees;
fees, $23.0 million spending on exchange services, and
$91.6 million of spending by timeshare owners and
Direct income of $144.0 million plus indirect
guests while on holiday, yielding total direct spending,
income of $81.2 million, resulting in total income
or output of approximately $345.5 million. Overall, the
of $225.2 million; and
Executive Summary
by timeshare owners are spent by timeshare resorts on their upkeep and operations, employing hundreds
direct and indirect economic significance of this direct
output of the timeshare industry on the national economy
in 2004-05 is summarised as (see Table E.1):
Direct value add of $178.4 million plus indirect
value add of $164.5 million, resulting in total value
add of $342.8 million.
Direct output of $345.5 million plus indirect output
of $352.9 million, resulting in total output of $698.4
The majority of the indirect flow-on economic effects
million;
are experienced in the transport, cafes and restaurant,
property and business, and retail sectors.
Table E.1
Economic
Significance of
the Timeshare Industry:
National Summary,
2004-05
Indicator
Direct
Indirect
Total
Output ($m)
Employment (FTE)
Salaries, wages and
related income ($m)
Value add ($m)
$345.5
3,675
$352.9
2,111
$698.4
5,786
$144.0
$178.4
$81.2
$164.5
$225.2
$342.8
Source: Timeshare owners survey; Timeshare entities survey; I/O Model; AECgroup
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Executive Summary
Executive Summary
With Australia’s tourism sector expected to record significant growth over the next 10-20 years, mainly
as a result of increased international visitor numbers, particularly from the emerging markets of China
and India, timeshare is well placed to play an integral role in this development. The National Tourism
Investment Strategy suggests that to accommodate the visitor growth to 2014, the tourism industry will
require a further 63,000 hotel, motel and serviced apartment rooms. Based on current trends, there could
be demand for an additional 1,500 timeshare units across 60-70 resorts in Australia, most of which would
be located in regional areas supporting local job opportunities and meeting increased regional tourism
demand.
It is clear that that in the last 5 years timeshare is finally
The future growth potential of the industry based on
starting to reach its potential in Australia. However,
recent trends and international growth benchmarks is
it still remains in its infancy as an industry relative to
outlined in Table E.2. In 10 year’s time in 2014-15,
timeshare in other more developed markets such as
timeshare sales could reach $479.7 million based
the USA. For example, the most recent research on
on current sales price growth and ownership number
the public image of timeshare in Australia indicated
trends. The number of timeshare owners could more
around 7% of Australia’s households rate their chances
than double to 311,500, with the number of resorts
of purchasing timeshare within the next three years
almost doubling to 136 with 3,780 units. In 2005-06,
as “about 50-50 or higher”, which is quite substantial
more than 200 new timeshare units were constructed in
relative to current market penetration of around 1%-
Australia, well up on the 80 in 2004-05, emphasising the
2%. This essentially indicates the potential to double
confidence and growth potential in the local industry.
the industry’s penetration rate to 3%-4%, assuming the
overcoming of regulatory barriers and effective sales
and marketing practices.
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Executive Summary
Table E.2
Current 2004-05
Projected 2014-15
Inventory
Number of Timeshare Resorts
Number of Timeshare Units
73
2,308
136
3,780
Sales Volume
Value of Timeshare Sales
Average Price per Interval Week
$173.2m
$15,260
$479.7m
$25,820
Ownership
Number of Timeshare Owners
Number of Timeshare Weeks Owned/Held
125,700
116,800
311,500
289,400
Executive Summary
Potential Growth in Australian Timeshare Industry Based on Recent Growth Trends
Source: AECgroup; Ragatz Associates
There are numerous clear strategies to enhance the role of timeshare in local economic development and Australia
more broadly. They begin with the recommendations made in the recent Joint Committee Inquiry into timeshare
regulation. Some of the key recommendations are unworkable and unnecessary, and threaten the future viability of
the industry in Australia. In addition to this, regulations regarding foreign investment regulations relevant to timeshare
property investment need to be reviewed. The resurgence of the Australian timeshare industry is closely linked to the
entrance of global timeshare developers and therefore opportunities in this respect should not be constrained.
In summary, the timeshare industry has become an
strategic direction. The growth potential of the industry
increasingly important component of Australia’s tourism
cannot be underestimated, with a possible doubling-
industry and has come a long way from the problems of
tripling in size over the next 10 years, going a long way
the 1980s and 1990s when the public image of timeshare
to effectively positioning the entire tourism sector to
was tarnished due to the questionable marketing
meet anticipated demand. However, the industry needs
practices of property entrepreneurs. The industry body,
to be taken seriously and its economic significance,
the Australian Timeshare and Holiday Ownership Council
particularly to regional economies, acknowledged.
(ATHOC), has significantly improved the public image of
the sector and provided more industry coordination and
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Contents
Contents
INTRODUCTION AND BACKGROUND
2
BACKGROUND TO THE STUDY
2
PURPOSE OF THE STUDY
3
RESEARCH METHODOLOGY
4
STRUCTURE OF THE REPORT
5
ACKNOWLEDGEMENTS
6
DISCLAIMER
6
AN INTRODUCTION TO TIMESHARE
7
DESCRIPTION OF TIMESHARE
7
THE TIMESHARE SALES PROCESS
8
THE TIMESHARE EXCHANGE PROCESS
9
INDUSTRY SEGMENTS
9
POSITIVE AND NEGATIVE ASPECTS OF TIMESHARE
11
PROFILE OF TIMESHARE IN AUSTRALIA
12
HISTORY, EVOLUTION AND GROWTH
12
SIZE OF THE INDUSTRY
13
MAJOR INDUSTRY PLAYERS
15
INTERNATIONAL CONTEXT
16
TIMESHARE RESORTS AND INVENTORY
17
TIMESHARE OWNERS AND CHARACTERISTICS
18
TIMESHARE PURCHASES AND SALES
19
TIMESHARE MAINTENANCE FEES
20
TIMESHARE TRAVEL TRENDS AND USE
21
TIMESHARE OWNER SATISFACTION
23
PUBLIC IMAGE OF TIMESHARE
26
REGULATION
26
INDUSTRY REPRESENTATION
27
GROWTH POTENTIAL OF TIMESHARE IN AUSTRALIA
29
RECENT GROWTH IN AUSTRALIAN TIMESHARE
29
RECENT GROWTH IN GLOBAL TIMESHARE
29
ENTRANCE OF MAJOR GLOBAL PLAYERS INTO LOCAL MARKET
30
GROWTH IN TOURISM AND VISITOR GROWTH
30
GROWTH POTENTIAL OF TIMESHARE IN AUSTRALIA
31
ECONOMIC SIGNIFICANCE OF TIMESHARE IN AUSTRALIA
32
METHOD OF ANALYSIS
32
An Introduction to Economic Significance Analysis
32
An Example Interpretation of Economic Significance Analysis
33
Contents
34
Survey and Data Collection Process
34
DIRECT ECONOMIC SIGNIFICANCE
35
Direct Output
36
Direct Resort Measures
42
Direct Resort and Corporate Office Construction Measuress
44
Direct Holiday Expenditure Measures
46
Direct Economic Significance: Summary
49
INDIRECT ECONOMIC SIGNIFICANCE
51
Indirect Output
51
Indirect Employment and Income
53
FISCAL SIGNIFICANCE
55
SUMMARY OF ECONOMIC SIGNIFICANCE
56
TIMESHARE AND ECONOMIC DEVELOPMENT IN AUSTRALIA
57
ECONOMIC INFLUENCE OF THE TIMESHARE INDUSTRY
57
TIMESHARE AND REGIONAL ECONOMIC DEVELOPMENT
58
Gold Coast
58
Port Macquarie
59
Kyneton
60
ROLE OF TIMESHARE IN THE TOURISM INDUSTRY
61
REGULATORY IMPEDIMENTS TO TIMESHARE GROWTH
62
STRATEGIES TO ENHANCE THE ROLE OF TIMESHARE
66
REFERENCES
68
APPENDIX A: ECONOMIC SIGNIFICANCE BY State/Territory
69
APPENDIX B: INPUT-OUTPUT MODEL
70
ECONOMIC SIGNIFICANCE MODEL
70
INPUT/OUTPUT MEASURES
71
Output
71
Income
71
Employment
71
Value add
71
LIMITATIONS OF INPUT-OUTPUT ANALYSIS
72
CONTACT ATHOC
73
Contents
Definition of Key Economic Significance Analysis Terms
Background to the Study
Timeshare is a broad term used to describe the partial
The growth prospects of the Australian timeshare
ownership of holiday accommodation and is a hybrid
industry have been recognised by some of the world’s
of the property development, tourism and hospitality
largest timeshare companies, such as Trendwest and
industries. Each “owner” owns a certain period of time,
Accor Premiere Vacation Club (APVC), who have
“points” or “intervals” which allows the owner to occupy
established operations in Australia and have played a key
a unit of accommodation on an intermittent basis,
role in timeshare’s recent growth and development.
making timeshare a form of pre-paid holiday plan for a
pre-determined period (up to 80 years). Consumers pay
Despite recording significant recent growth, the
a purchase price and then an annual maintenance fee
Australian timeshare industry’s growth and contribution
for the upkeep of the unit. Exchange companies provide
to economic development, particularly in regional
exchange services across timeshare resorts allowing
areas, remains impeded to an extent by unnecessary
flexibility in terms of choosing where to holiday.
and inappropriate Government regulation. While the
industry welcomed the recent enquiry by
The timeshare industry has become
an
increasingly
the Parliamentary Joint Committee
important
on Corporations and Financial
Australia’s
Services “Timeshare: the Price of
tourism industry. It is the
Leisure”, the recommendations
fastest growing segment of the
of the Committee cannot be
tourism industry, both nationally
accepted in their current form
and globally, recording growth
or similar because they clearly
of 10% per annum over the
threaten the viability of timeshare
past five years, and employs
in Australia.
component
of
thousands of workers, both
directly and indirectly, across
Australia’s regions.
While timeshare is playing a larger
and more important role in the Australian
tourism industry and regional economic development,
The industry has come along way since the problems
there has been little previous research of the industry’s
of the 1980s and 1990s when the public image of
overall size and significance. This information gap
timeshare was tarnished due to the questionable
has been identified by ATHOC, and has resulted in
marketing practices of property entrepreneurs. An
the preparation of this study. Such studies have been
industry body, the Australian Timeshare and Holiday
completed for many other significant timeshare markets
Ownership Council (ATHOC), was established in 1994 to
around the world, including the USA.
improve the image of the industry helping to restore its
reputation and provide a consistent strategic direction.
2
Introduction and Background
Industry measures the size and economic significance
of the Australian timeshare industry for the financial year
2004-05. The study was commissioned by ATHOC and
is the first of its kind in Australia. It attempted a full audit
of financial and operating statistics for all timeshare
companies operating in the Australian market, along with
a representative survey of owners of Australian timeshare.
The study is to be used by ATHOC and the timeshare
industry for research, promotion, communication and
lobbying purposes.
Purpose of the Study
The Economic Significance of the Australian Timeshare
3
Research Methodology
Before the undertaking of this study, there was little
from timeshare companies and owners, input-output
research available for the timeshare industry in Australia.
modelling using the most recent National Input-Output
The main previous research had been completed in
Tables was undertaken to estimate the economic
2002 by Ragatz Associates, Inc., a research division of
significance of the timeshare industry.
leading global timeshare exchange company RCI, titled
Resort Timesharing in Australia/New Zealand. No study
The details of the two categories of email and mail
had previously investigated the economic significance
surveys undertaken nationally in February/March
of the timeshare industry on the Australian economy.
2006 for the project are outlined in the Table 1.1. A
total of 6,253 survey responses were recorded from
To ensure that the study represented the interests of
timeshare owners, a significant response rate meaning
the industry, consultation was undertaken with key
a statistically representative sample. Out of the 73
stakeholders regarding the industry’s characteristics,
timeshare resorts in Australia, 62 were represented by
growth potential, key trends and inhibitors. With little
survey responses, also meaning a statistically relevant
research and data directly available, this study involved
sample. The four main exchange companies based in
extensive primary data collection through industry and
Australia responded to the survey.
owner surveying. Once the data had been collected
Table 1.1
Survey Parameters
Timeshare Owners
Timeshare Entities
Technique:
Email and Mail Surveys
Mail Survey
Sampling Population:
Australian Timeshare Owners
Australian Timeshare Companies
Sample Size:
6,253 out of 125,700 contacted owners
62 out of 73 resorts, 4 main exchanges
Sampling Confidence:
95% confidence interval of +/- 1.21%
95% confidence interval of +/- 4.86%
Survey Period:
February/March 2006
February/March 2006
Source: AECgroup
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Chapter 4
Introduction and Background: Overview of the
Growth Potential of Timeshare in Australia: Analysis
background to the project, the purpose of the study,
of the future growth potential of the timeshare
research methodology, reporting structure, project
industry, including reference to the global industry and
management and acknowledgements.
identification of key growth factors.
Chapter 2
Chapter 5
An Introduction to Timeshare: Description of the
Economic Significance of Timeshare in Australia:
timeshare industry in simple terms, including how it
Assessment of the direct and indirect economic
works, the key components of the industry, and positive
significance of the timeshare industry nationally and by
and negative aspects.
State/Territory based on survey data and input-output
modelling.
Chapter 3
Profile of Timeshare in Australia: Detailed summary of
Chapter 6
the characteristics of the timeshare industry, including
Timeshare and Economic Development in Australia:
industry size and growth, key businesses, public image
Overview of the role timeshare plays in economic
and regulation.
development, particularly in regional areas, and
Structure of the Report
Chapter 1
strategies to further enhance this role.
5
Acknowledgements
Both ATHOC and the AECgroup would like to acknowledge the support and participation of the timeshare
industry in the preparation of this study. The study represents the combined effort of all parts of the
Australian timeshare industry, including timeshare developers and promoters, resorts, exchange companies
and owners. Almost all timeshare companies have completed numerous survey forms for data gathering
purposes, distributed surveys to timeshare owners, and provided strategic advice when required.
ATHOC would like to make special mention of John Henley, Senior Business Analyst with Trendwest,
who has provided invaluable support and advice for the research project, particularly in the early project
stages.
ATHOC would also like to sincerely thank its sponsors for this project: Accor Premier Vacation Club,
Classic Holidays, Interval International, I.C.E. Asia Pacific, RCI and Trendwest.
A special thank you to Darla Zanini – Executive Vice President of the ARDA International Foundation (AIF)
for supporting ATHOC throughout this research and enabling us to bring together a report that can be used
to help gauge Industry averages and also Industry Best Practice on an International basis.
The AECgroup would like to thank Laura Younger, General Manager of ATHOC, and her ATHOC team, who
have continuously energised the industry regarding the study and can claim much credit for the strong
industry participation rates and the accuracy of the data.
The AECgroup is a leading Australian consultancy firm. The AECgroup has a strong record in consulting
to the tourism industry and measuring the economic impact and significance of major industries. The
AECgroup was also the lead consultant for the National Tourism Investment Strategy released by the
Minister for Small Business & Tourism, the Hon. Fran Bailey, in March 2006. The AECgroup has aslo
completed economic impact and significance studies for the Australian cruise shipping, charter boat and
Disclaimer
sugar industries.
6
Whilst all care is taken, the AEC Group Limited (AECgroup) does not warrant the accuracy of this information
and accepts no liability for any loss or damage that you may suffer as a result of your reliance on this
information, whether or not there has been any error, omission or negligence on the part of the AECgroup
or its employees. The study has involved significant primary data collection from industry operators, and
as such, the AECgroup cannot be responsible for any misleading or false reporting from these operators.
Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables,
and as such no warranty is given that a particular set of results will in fact be achieved.
An Introduction to Timeshare
These structures usually provide purchasers with
partial ownership of holiday accommodation. Each
holiday entitlements of a week. From the introduction
“owner” owns a certain period of time, “points” or
of timeshare in Australia in the late 1970s until the
“intervals” which allows the owner to occupy a unit of
early 1990s, nearly all timeshare products were title-
accommodation on an intermittent basis. Also known
based and related to just a single specific resort. In
as “vacation exchange”, “holiday ownership”, “multi
recent years however Points Clubs have dominated the
ownership” or “group ownership”, timeshare is a form
market, providing greater flexibility by allowing shorter
of “fractional ownership” which is the selling of resort
and longer stays, depending on the number of points
real eState in time intervals or using a points system.
used.
Timeshare is essentially a form of pre-paid holiday plan,
which entitles purchasers to holiday accommodation for
a pre-determined period (up to 80 years). Historically,
the following product structures have existed:
Title-based: the timeshare is deeded and a title is
issued and registered under the relevant State
property laws;
Description of Timeshare
Timeshare is a broad term used to describe the
Share based: purchasers own a share in the club
with a holiday entitlement attached;
In addition to the initial purchase price, timeshare
owners pay an annual club fee or maintenance levy
Unit trust: similar to share based but structured as
a trust;
to cover the costs required to run the club or resort
including reserves for periodic refurbishment. Irregular
special levies may also occur from time to time for items
Right to use: usually used for shorter duration
schemes;
of a capital nature. These clubs/resorts are essentially
non-profit organisations that are analogous to the body
corporates of strata title real estate.
Points clubs: purchasers acquire points which they
can redeem for holiday use; and
Timeshare owners are able to “exchange” their
timeshare company by using the services offered by
Combinations of the above.
timeshare exchange companies. Owners place their
accommodation entitlement in an inventory pool and
exchange it for accommodation elsewhere in Australia
or overseas.
7
The Timeshare Sales Process
To become a timeshare owner, an individual makes a
Interval ownership implies that the timeshare resort
one-time purchase of furnished resort accommodation,
property is divisible in time. Several types of intervals
at a fraction of whole ownership costs, and pays an
are available to the buyer at the time of purchase,
annual maintenance fee. Each apartment of a timeshare
depending on the structure of the resort scheme. These
resort is divided into intervals, either by the week or
include fixed, floating or holiday times. Fixed time is
points equivalent, which are sold separately.
purchased by the owner for use at the same time each
year (e.g. Christmas holidays). Floating time implies
The timeshare is priced according to a variety of
that ownership is not restricted by the calendar year,
factors including type of product, size of the unit, resort
except for allocated fixed weeks.
amenities, location, and season. The purchaser owns
the holiday period — but only for the amount of time
The resale market for timeshare in Australia is
he or she plans to use it, typically one or two weeks
undeveloped compared with Europe and some States
each year. Included in these rights is the exclusive use
of the USA. If the owner wishes to exit the contract they
of a range of resort facilities, such as tennis, sauna,
may receive between 50 or 60 percent of the price paid
spa, swimming pool, squash and gymnasium. With
for points products, title-based products in older resorts
timeshare, the owner has all the benefits of a vacation
may realise only 10 percent of the original price.
home without the year-round costs. From its origin, the
idea behind Timeshare was to give people the ability to
purchase their future holidays — at current prices.
8
The exchange process works as follows:
ability of consumers to access a global network
of thousands of timeshare resorts. An owner of a
timeshare can place their annual accommodation
entitlement into an “inventory pool” and exchange it
for accommodation elsewhere in Australia or overseas.
This valuable service, which is used by around 65,000
Australia timeshare owners each year, is provided by
timeshare exchange companies which charge fees for
their services.
Owners generally pay a fee to become a member of
an exchange company;
Members have a week or more to exchange with,
or points to relinquish;
Members deposit their weeks into the exchange
pool;
Members then request other holiday weeks from
the exchange pool;
Exchanges are confirmed considering value of
Exchange companies operate in Australia, enabling
week being relinquished;
timeshare owners, the flexibility to trade their holiday
Members pay a fee for this service; and
week for another resort in one of many locations
Staff assist members throughout the process
worldwide. The exchange system works much like a
with advice as required.
bank savings account, allowing owners the opportunity
to bank a holiday week any year they consider they will
probably not use it, and save it till the following year, or
exchange it for a different holiday location at a resort of
their choice in the same year.
the objective of this study, it is necessary to understand
the different segments of the industry. Timeshare has
most recently been described as a hybrid of the property
development, tourism and hospitality industries, and as
such involves three principal groups of service providers:
developers who build resort complexes and promoters
who sell units to consumers; exchange companies
which facilitate the bartering of units between locations;
and networks of participating resorts. More detail on
each is provided below, plus timeshare owners:
Industry Segments
To research and analyse the timeshare industry, which is
The Timeshare Exchange Process
A significant feature of the timeshare industry is the
9
Industry Segments
Timeshare developers and promoters
Timeshare exchange companies
There are presently only 5 timeshare companies actively
There are 5 main timeshare exchange companies in
selling timeshare in Australia, with two dominating
Australia, including global players Interval International,
development: Trendwest and APVC. Both are relatively
Dial An Exchange and RCI. These companies often
new players to the industry having established their
provide membership for an initial term as part of
Australian operations in 2000. Timeshare developers
the timeshare purchase with an aligned timeshare
construct or acquire new timeshare inventory (resorts
developer. Owners then have the option of renewing their
and units) and then sell the timeshare publicly, often
membership, generally at an annual fee of $50-$100.
making sales on-site at resort sales offices. Each of
Timeshare owners register their property for exchange
these companies generally has a corporate office from
through these companies. Exchange companies then
which they coordinate development and marketing
essentially pool available timeshare accommodation
operations.
domestically and internationally and offer it to members.
Members pay a fee for this service, generally around
$100 for confirmed domestic exchanges and $250
for international exchanges. Timeshare exchange is
becoming increasingly popular because of the flexibility
it provides. Around 93% of Australian timeshare owners
are exchange members.
Timeshare resorts
Timeshare owners
There are presently 73 timeshare resorts in Australia,
There are approximately 125,700 owners of Australian
generally concentrated in Queensland, particularly
timeshare. Around 91% live in Australia and 9%
the Gold Coast, northern New South Wales at Port
overseas. Timeshare owners have purchased timeshare
Macquarie and Coffs Harbour, and in Victoria. The
from a timeshare developer, most likely at a sales office
resorts provide the accommodation to owners, and
on-site at a resort. They have generally paid between
spend the maintenance fees paid by owners on the
$10,000 and $25,000 for either interval weeks or
operation and upkeep of the unit and resort. There are
points of timeshare. Around 70% of current owners
many standalone resorts in Australia, while some are
bought their timeshare before 2000, while around 30%
managed by the larger companies such as Trendwest,
purchased their timeshare from Trendwest or APVC
APVC, Holiday Concepts and Classic Holidays. Each
in the past 5-6 years. Each timeshare owner pays an
resort has an elected board generally made up of owner
annual maintenance fee of between $300 and $700 for
representatives that determines budgetary spending
the upkeep of their unit/resort.
each year.
10
The flexibility to use the timeshare anywhere in the world;
Accommodation is generally larger and standards higher;
Users of timeshare look after their properties;
Owners do not necessarily use their holiday home every week of the year;
Owners purchase only the number of holiday weeks they wish to use;
Owners purchase a lifetime of holiday accommodation at today’s prices;
Owners can bank their week for three years and take a longer holiday;
Regulation is designed to reassure and protect purchasers.
The negative aspects of timeshare to the consumer can be:
The purchaser never legally owns the property;
Holiday locations are limited to timeshare participating resorts;
Positive and Negative Aspects of Timeshare
The positive aspects of timeshare to the consumer can be:
There is a limited pool of investors for resales;
The use of the unit is limited in days available; and
There has been a negative perception of timeshare in the past.
11
History, Evolution and Growth
Profile of Timeshare in Australia
Timeshare was first introduced to Australia in the 1970s after timeshare
originated in Switzerland in the 1960s. The 1980s saw a proliferation of
timeshare schemes, particularly on Queensland’s Gold Coast by the Classic
Holidays group. However, the questionable marketing practices of some other
property entrepreneurs soon led to an industry downturn. In 1990 the collapse
of the unlisted property trust market further reduced investor confidence. By
1995, there were fewer than five resorts actively selling timeshare in Australia,
and these were mainly Holiday Concepts properties in Victoria.
In 1994 ATHOC, the timeshare industry’s peak body, was formed to improve
the image of the industry. It developed an industry code of practice and
provided training and dispute resolution services. In 2005-06, there are 64
members of ATHOC, representing more than 97% of timeshare resorts and
organisations in Australia. Corporations law reform in the late 1990s raised
industry standards and provided more protection for consumers.
Traditional timeshare contracts generally secured the owner a holiday at the
same timeshare property for a specified property, at a designated time once
a year. However, through the 1990s, an increasingly sophisticated public
demanded a wider range of choices as far as holiday destinations were
concerned. Points-based timeshare schemes were designed to meet this
requirement for flexibility. Instead of accommodation entitlements measured
in weeks, they are measured in “points” or “credits” which are a form of
holiday “currency” that can be redeemed to book holiday accommodation
at various destinations. These points are backed by resort real eState held in
trust by a managed investment scheme.
The start of this century saw the introduction of major international timeshare
developers Trendwest and APVC to the Australian market. These two developers
have grown the market by almost 50% in the past 5-6 years and have helped
create a more professional image for the industry.
Timeshare is now the fastest growing component of the Australian tourism
industry, recording average growth of around 10% in each of the past 5-6
years. Timeshare is also positioned as the fastest growing global tourism
market, achieving average growth of 12% per annum over the past 15 years.
12
125,700 Timeshare Owners: There were approximately 125,700 owners of timeshare in Australia, of which
114,900 lived in Australia and 10,900 lived overseas. It is estimated that owners of Australian timeshare have
increased at an average rate of 10% since 2000.
$173.2 million in Timeshare Sales: There was an estimated $173.2 million worth of new timeshare sales in
Australia in 2004-05. The average sales price in 2004-05 was $15,260. Around $50 million of this sales
revenue was spent on constructing new timeshare resorts.
$57.7 million in Maintenance Fees: There was an estimated $57.7 million paid by Australian timeshare owners
in annual maintenance fees in 2004-05. The average annual maintenance fee in 2004-05 was $495.
73 Resorts and 2,308 Units: There were 73 timeshare resorts in Australia in June 2005, recording 2,308
Size of the Industry
The size of the Australian timeshare industry in 2004-05 was described as:
timeshare units, predominantly located in Queensland, New South Wales and Victoria. The number of resorts
has increased from 57 in the past five years, driven by new stock by Trendwest and APVC. Around 73% of the
units are 2-bedroom units, though there is increasing numbers of studio and 1-bedroom apartments.
116,900 Available and 100,200 Occupied Timeshare Weeks: There were 116,900 available timeshare weeks
in Australia in 2004-05, of which 100,200 weeks were occupied, equating to 86% occupancy.
117,000 Exchange Members: There were around 117,000 members of exchange companies in Australia in
2005, representing 93% of all owners. Interval International, Dial An Exchange and RCI are the largest companies.
2,540 Full-Time Equivalent Employees: There are 2,540 full-time equivalent employees of timeshare sales,
marketing, exchange and resort companies in Australia in 2004-05.
$98.2 million in Direct Salaries and Wages: There was an estimated $98.2 million paid to employees of timeshare
companies in 2004-05.
$101.4 million in Non-Compensation Expenditure: There was an estimated $101.4 million spent by timeshare
businesses on non-compensation expenditure in 2004-05, of which sales and marketing and administration
were the most significant components.
$91.6 million in Holiday Expenditure: A total of $91.6 million was spent by guests/owners while holidaying using
timeshare in Australia in 2004-05, with an average of $916 per travel party per trip.
13
Major Industry Players
The Australian timeshare industry is fairly concentrated.
For example, the development and sales of timeshare is
presently dominated by Trendwest and APVC, who only
entered the local market six years ago in 2000. There are
three main exchange companies, Interval International,
Dial An Exchange and RCI. Outside of these companies,
there are large timeshare groups that were established in
the 1970-80s: Classic Holidays and Holiday Concepts.
These two companies still record close to the largest
inventory. Beyond this there are approximately 25-30
standalone resorts, or resorts part of smaller timeshare
groups in Australia like East Coast Timeshare, Holiday
Club and Interchange Vacation Club.
14
Interval International: Interval International is based
largest active timeshare developer in Australia and is
in New Zealand and is the other significant exchange
the developer and promoter of the part of the WorldMark
company operating in Australia. It is presently affiliated
South Pacific holiday club. The company entered the
with APVC providing membership to their new owners.
Australian market in 2000 and has developed 11
timeshare resorts across regional Queensland, New
Classic Holidays: Classic Holidays is one of the oldest
South Wales and Victoria. The company uses a Holiday
timeshare companies in Australia and manages 11
Credits system and is affiliated with exchange company
timeshare resorts, mainly on the Gold Coast. Many of
RCI. The company is based on the Gold Coast.
the company’s resorts were developed in the 1980s.
APVC: The company, part of the wider Accor hotel
Holiday Concepts: The company is one of the largest
group, has also been responsible for much of the recent
in Australia in terms of timeshare inventory, with 12
growth in the Australia, entering the market in 2000
resorts mainly in Victoria. The company has an in-
and having developed 11 resorts across Queensland,
house exchange company, HC Direct, and is based in
New South Wales and Victoria. The company employs
Melbourne.
Major Industry Players
Trendwest: Trendwest South Pacific Pty Ltd is the
a points system. The company is based on the Gold
Coast.
I.C.E. Asia Pacific: The company records around
100,000 members and provides membership to all
RCI: RCI is one of the two largest exchange companies
new timeshare owners in Australia. The company was
in Australia and is presently affiliated with Trendwest.
established in 1997 and was the first to integrate cruises
RCI is one of the world’s largest timeshare exchange
into the timeshare industry through the introduction of
companies, providing members with access to more
cruise exchanges.
than 3,800 resorts across 101 countries. The company
is based on the Gold Coast.
15
Ragatz Associates, in their most recent Resort Timesharing Worldwide Report, estimated that there are
more than 5,400 timeshare resorts in the world, supplying a total of 325,000 timeshare units (see Table
3.1). This compares with the Australian totals of 73 resorts and 2,308 units, emphasising the relative
infancy but growth potential of the sector in Australia. Timeshare ownership and sales globally has grown
at an average rate of 12% per annum between 1990 and 2003, compared with the Australian growth rate
of around 10%. Both growth rates exceed broader tourism sector averages. Prior to 2000, the Australian
market had no global timeshare developers.
Australian Timeshare Industry and Global Context
Table 3.1
International Context
Australia,
2004-05
Global,
2002-03
Inventory
73
2,308
5,425
325,000
Sales Volume
Value of Timeshare Sales
Average Price per Interval Week
$173.2m
$15,260
$9.4b
$10,600
Ownership
Number of Households with Ownership/Holdings
125,700
116,800
6.7m
10.7m
Percentage of Total Global Timeshare Resorts
North America dominates the global timeshare
industry, recording around 1,700 of the world’s 5,425
around 25%, with Spain offering over 500 timeshare
resorts alone. To put the size of the US timeshare
market into perspective, this market recorded $5.5
Figure 3.1
resorts in 2003 (see Figure 3.1). Europe records
25%
Europe
16%
Latin
America
billion of the world’s $9.4 billion of timeshare sales
in 2002.
16
3% Pacific
14% Asia
Source: Ragatz Associates
31%
North
America
5% Caribean
6% Africa
The map below (Figure 3.2) demonstrates the
Australia as at June 2005. The number of resorts has
concentration of timeshare resorts along the eastern
increased dramatically since 2000, with Trendwest and
seaboard of Australia, particularly on the Gold Coast
APVC both developing 11 new resorts each. Prior to this,
and at the northern New South Wales cities of Port
Classic Holidays and Holiday Concepts were the largest
Macquarie and Coffs Harbour. Around 70 out of the 73
timeshare groups, with 11 and 12 resorts, respectively,
timeshare resorts in Australia are located in regional
most developed in the 1980s and 1990s. The recent
areas outside capital cities, as are most head offices of
development of new timeshare inventory across
major industry players.
Australia has introduced vastly improved flexibility for
timeshare owners, which has seen timeshare exchange
activity significantly increase.
Figure 3.2
Location of Timeshare Resorts
in Australia as at June 2005
Source: AECgroup
Timeshare Resorts and Inventory
There were 73 resorts with timeshare inventory in
The most common unit types in Australia’s timeshare inventory are
two-bedroom units, representing around 73% of the total. However,
much of the new timeshare product are studios and one bedroom
apartments. Looking forward, a survey of active timeshare developers
indicates around 260 new timeshare units planned for 2005-06, with
almost half being one bedroom units. Much of this new supply will be
located in regional Victoria and Western Australia. This development
represents a significant increase on the 80 new units constructed in
2004-05, and provides an indication of the likely substantial growth of
the timeshare sector in the near future.
17
18
Around 70% of the timeshare owned in Australia was purchased prior to 2000 from Classic Holidays,
Holiday Concepts and a range of standalone resorts. Post 2000, Trendwest and APVC have dominated
timeshare sales in Australia, recording approximately 40,000 new owners (see Figure 3.3).
There were an estimated 125,700 timeshare owners in Australia at June 2005, of which 91% lived
in Australia and 9% lived overseas. Close to 50% of all timeshare owners in Australia live in Sydney,
Melbourne or Brisbane where timeshare marketing has been largely focused. Around 40% live in regional
areas. Overall, it is estimated the number of owners has increased at an average rate of 10% since 2000,
compared with the global timeshare growth rate of 12% per annum between 1990 and 2003.
Total Number of Owners of Australian Timeshare
Figure 3.3
Timeshare Owners and Characteristics
Source: Timeshare entity surveys; AECgroup
Just over half of timeshare owners are part of couple
to Australian population statistics and US benchmarks
families with children, with 25% being married couples
for the timeshare industry. The household income
without children. There is an increasing share of singles
distribution of timeshare owners is fairly similar to the US
owning Australian timeshare at 9%, although this is still
benchmark, with 27% of households earning between
below US benchmarks of 12%. Timeshare owners in
$50,000 and $75,000, and 23% earning more than
Australia are largely in the 35 to 64 years range. There
$100,000. Compared with all Australian households,
is a lower proportion of owners in the 15 to 34 years
timeshare owner households are more affluent, with a
bracket and the older than 65 years age bracket relative
distribution toward the upper income brackets.
This growth mainly reflects increasing sales prices in
estimated at $173.2 million, based on sales figures
the market (newer owner average of $15,590 versus
supplied by timeshare companies actively selling
older owner average of $9,662), changes in the time
timeshare. Many of the older owners of timeshare
period of timeshare purchased, improvements to the
property own timeshare weeks, while newer owners
standard and quality of the timeshare property, and
commonly own points which can be equated to a
increases to average unit sizes. Around 70% of older
particular time period, and type and standard of
owners paid between $5,000 and $15,000, while 70%
property.
of newer owners paid between $10,000 and $20,000.
Timeshare Purchases and Sales
The total value of timeshare purchases in 2004-05 was
A survey of timeshare owners in early 2006 indicated the
average purchase price paid for timeshare in Australia
was $13,550, up from the $10,500 average estimated
in 2002 by Ragatz. Timeshare purchase prices have
increased threefold since 1983 when the average was
$4,700 per week.
19
Travel Trends and Use
Timeshare Maintenance Fees
20
In 2004-05, it was estimated owners of Australian timeshare paid $57.7 million in annual maintenance
fees to resorts. This equates to approximately $495 on average per interval week of timeshare. Over 50%
of the all timeshare owners paid between $400 and $600 in maintenance each year.
The results indicate growth from 2002 when Ragatz Associates estimated an average maintenance fee
of $405. In 1983, the average maintenance fee was only around $90 per week. Newer timeshare resorts
tend to offer more upscale services and facilities, and fees also incorporate expenses associated with any
anticipated legal problems by the developer in terms of future fee levels to adequately fund maintenance
and refurbishment.
The increasing use of exchange services has changed the dynamic of travel trends in the Australian
timeshare industry. Around 25% of Australian timeshare owners exchanged their timeshare for an overseas
trip last year, with a further 50% exchanging to a different resort in Australia other than the one they own.
Around 93% of owners of Australian timeshare are now members of at least one exchange company.
Consistent with the location of timeshare, most usage occurs in Queensland, New South Wales and
Victoria. What is apparent is that when new timeshare inventory is introduced to Australia, it is extremely
popular over its first couple of years. There is typically between 2 and 5 persons in the timeshare travel
party, with the average length of stay on a timeshare holiday being 7.1 nights, 6.5 being at the actual
timeshare resort.
expenditure per trip for the average timeshare holiday
visitor party in Australia is around $916, comprised
largely of dining out and take-away, groceries, other
retail shopping and travel expenses including airfares,
motor vehicle hire and fuel (see Table 3.2).
Timeshare Travel Trends and Use
A survey of timeshare owners indicates the average
Overall, it is estimated owners/guests holidaying using
timeshare spend $91.6 million in Australia’s regions,
of which around $83.2 million occurs outside of the
timeshare resort in the local economy.
Timeshare owners and guests typically have higher
disposable incomes compared with the average
Australian household. And since they have already paid
for their accommodation, they often spend more while
on holiday compared with the average domestic visitor.
21
Timeshare Travel Trends and Use
Table 3.2
Average Expenditure per Travel Party per Timeshare Trip
Expenditure Category
Avg. Spend Per Travel Party per Trip
Transport
Airfares between home and main destination
Other airfares (excluding above)
Taxi fares
Public transport
Motor vehicle hire, lease and repairs
Fuel (petrol, diesel)
$177
$0
$3
$1
$44
$95
Dining and Shopping
Take-away and restaurant meals
Groceries and food products
Other shopping (including gifts and souvenirs)
Alcoholic beverages and other beverages*
$219
$114
$114
$74
Activities
Recreation, cultural and sports services
Gambling and betting services
Tours
$46
$4
$9
Accommodation
Lodging in resort area before/after using timeshare
$11
Other expenses not included above
$6
Total
$916
* Includes all beverages bought and consumed in licensed restaurants, cafes, clubs, pubs, taverns and bars
and take-away liquor from liquor stores
Note: All figures are rounded to the nearest dollar and are in nominal prices and Australian dollars.
22
satisfied with their timeshare, with 39%
very satisfied and a further 42% satisfied
(see Figure 3.4). A weighted average
score (on a scale of 1-5, with 1 being the
Figure 3.4
best and 5 being the worst) of 1.87 was
calculated from the survey results, slightly
better than the US benchmark of 1.90. Just
Overall Satisfaction with Timeshare
6% of Australian timeshare owners were
dissatisfied, compared with 12% in the
US.
Each aspect of the timeshare experience
is rated highly in Australia, with a weighted
average between 1.5 and 2.0 (see Table
3.3). The construction quality and amenity
of resorts is rated more highly in Australia
than the US, however, service aspects such
as cleaning, management responsiveness
and hospitality are rated slightly lower, on
average. Services and facilities nearby are
Source: Timeshare owner survey; AECgroup
Timeshare Owner Satisfaction
Australian timeshare owners are fairly
rated ahead in the US.
23
Overall Satisfaction with Australian Timeshare
ied
satisf
1%
2%
2%
1%
2%
1%
14%
W/ A
43%
43%
46%
38%
42%
38%
35%
Very
Dis
9%
9%
12%
9%
13%
11%
37%
atisfi
Some
what
Dissa
ti
47%
45%
39%
50%
42%
49%
10%
Neutr
al
ed
sfied
Source: Timeshare owner survey; AECgroup, ARDA
Some
what
S
tisfie
d
Australian Timeshare
Construction quality
Amenities and facilities at resort
Services and activities near resort
Cleanliness / upkeep of the unit
Management responsiveness
Hospitality shown by staff
Amount of maintenance fees
Very
Sa
Characteristic
Table 3.3
0%
0%
0%
0%
1%
0%
3%
1.64
1.68
1.77
1.62
1.78
1.65
2.66
The overall performance of exchange companies in Australia is rated as satisfactory, with just under
70% of exchange members very satisfied or satisfied with their timeshare exchange company (see
Table 3.4). The level of exchange and membership fees is the most poorly rated element.
Overall Satisfaction with Australian Timeshare Exchange Companies
W/A
issati
s
fied
tisfie
what
Dissa
Satis
fied
what
Some
42%
39%
43%
36%
35%
47%
Very
D
33%
33%
31%
12%
12%
22%
Some
Exchange Companies
Level of service
Choice of resorts
Information provided
Exchange fees
Membership fees
Overall performance
Neutr
al
Table 3.4
Characteristic
Very
S
atisfi
ed
d
13%
13%
13%
32%
33%
17%
3%
6%
3%
10%
10%
4%
1%
2%
1%
2%
2%
1%
1.86
1.96
1.91
2.49
2.51
2.09
Source: Timeshare owner survey; AECgroup, ARDA
24
affect on the quality of life of almost 80%
Figure 3.5
of Australian timeshare owners, compared
with 75% in the USA (see Figure 3.5). Only
4% of Australian timeshare owners would
Affect of Timeshare on Quality of Life
describe a negative affect of timeshare
ownership on their quality of life.
Around half of Australian timeshare
owners believe timeshare ownership has
saved them money on their holidays, with
an additional 35% expecting it to do so
over time (see Figure 3.6). Only a small
proportion (12%) believe it will not save
them money, half the USA benchmark ratio
of 25%.
Figure 3.6
The ownership of timeshare has a positive
Has Timeshare Ownership Saved You
Money on Your Holidays?
25
Public Image of Timeshare
As mentioned, the Australian timeshare industry recorded a dented public image through the early part
of the 1990s due mainly to the questionable marketing practices of property entrepreneurs. However, the
industry has managed to shed most of this negative image in recent times.
Ragatz Associates prepared the most recent research on the public image of timeshare in Australia in
2002. The research indicated that timeshare is moderately familiar to Australians, with 65% of Australian
households earning more than $35,000 per annum having heard of timeshare. Only 30% had ever been
solicited to attend a timeshare sales presentation, and many of these not for several years. Despite this,
68% of those aware of timesharing hold positive or neutral opinions of the concept. Furthermore, 22%
express interest in purchasing, including 7% who rate their chances of purchasing within the next three
years as “about 50-50 or higher”, which is quite substantial relative to current market penetration of
around 1%-2%.
Overall, the results indicate an improving image for timeshare, linked to the role of ATHOC and entrance of
recognisable international developers and promoters to the market in 2000.
Timeshare schemes have been subject to regulation for twenty years. Until the introduction of the
Managed Investments Act in 1998 timeshare schemes had been regulated as “prescribed interests” under
Corporations Law. The legislation redefined “prescribed interests” as “managed investments”, inserting
Regulation
a new set of compliance requirements into the Corporations Act. The implementation of the Financial
Services Reform Act 2001 brought a further wave of regulatory change for timeshare schemes, which
became subject to licensing requirements as financial products. Since the introduction of that regime,
the Australian timeshare industry approached the Parliamentary Joint Committee on Corporations and
Financial Services with concerns about the regulation of timeshare schemes. Industry representatives
have argued that regulation as an investment has placed excessive constraints on the industry while, at
the same time, confusing consumers about the true nature of the product.
In December 2004, the Committee resolved to conduct an inquiry into the regulation of the timeshare
industry. The inquiry was completed in late 2005 culminating in the report Timeshare: the Price of Leisure.
ATHOC, the industry representative body, disagrees with certain key recommendations made by the
Committee. These same concerns have again been raised by the Australian Government’s National Tourism
Investment Strategy. Regulatory impediments constraining the industry and the issues surrounding the
recommendations of the Inquiry are discussed in more detail in Section 6.4 of this report.
26
In order to continually foster high ethical standards and
Council Limited (ATHOC) is a not-for-profit industry
adherence to industry best practice, every Member of
body established in 1994 to provide services to all
ATHOC is required to abide by a Code of Ethics and Code
stakeholders in the Australian timeshare industry.
of Practice. Membership to ATHOC is by application and
ATHOC operates nationally with an elected Board that
not by right. Once a Member is accepted they are bound
provides representation for a range of membership
by the Code of Ethics and Code of Practice. ATHOC
categories to cover resorts, timeshare owners,
conducts a strict surveillance regime and should any
developers and promoters, marketers, exchange
Member be found to breach either or both of the Codes, a
companies and organisations that provide professional
range of penalties may be brought against the Member.
advice to the timeshare industry. In 2005-06, there are
64 members of ATHOC, representing more than 97%
ATHOC has always sought to work closely with
of timeshare resorts and organisations in Australia.
Commonwealth and State regulatory bodies such as
ATHOC’s missions are to:
ASIC and the various State-based consumer protection
organisations to ensure that any consumer concerns
Foster a high standard of ethics and adherence
to industry best practice among Members and to
maintain good standing with all stakeholders;
are dealt with promptly and fairly.
Industry Representation
The Australian Timeshare and Holiday Ownership
Continually promote the benefits of the industry and
to protect the goodwill of Members and consumers;
and
Assist all Members to achieve growth and
profitability in an ever-changing business
environment.
27
ATHOC Code of Ethics
This Code of Ethics is adopted for the benefit of both the consumer and the member to ensure that all
aspects of the timeshare industry (“Industry”) will be conducted on a high ethical plane, trusted and
respected by all. Ignorance of the Code shall be no excuse for it’s non-observance by any member or
anyone acting for the benefit of any member.
Members shall:
Members shall not:
Act at all times in a professional manner to build a
Breach in the spirit, apart from in the letter, the
reputation of fairness and respect and to enhance
principles, objects and ethics of ATHOC and this
the public image of the Industry.
Code.
Give active and not merely passive support to
Convey false, untrue, deceptive or misleading
ATHOC, comply with its Memorandum and Articles
information or make material omissions, through
of Association, its rules and regulations and uphold
advertisements, Statements, photographs, sales
its prestige and reputation within the community.
information, documents or other means which
would be likely to affect consumer
Observe and abide by the Code of Ethics and all
decision-making.
legislation, regulations and guidelines that govern
their activities.
Exert undue influence, pressure or persuasion
on potential purchasers of timeshare or timeshare
Act honestly, fairly, courteously and with integrity
in all dealings with the public and with other
products to the detriment of the public perception
of the Industry.
members.
Use their membership in a misleading manner.
Adopt responsible and generally acceptable trade
practices.
Act with due skill, care and diligence in the
performance of their duties.
Be responsible for the actions of their employees
and others acting under their authority or direction.
Strive to maintain and improve their professional
knowledge, skills and competence.
28
Growth Potential of Timeshare in Australia
Australian timeshare industry has averaged
Figure 4.1
10% per annum over 5 years to 2004-05.
The growth has seen the number of timeshare
owners increase from 87,400 in 2000-01 to
125,700 in 2004-05. Over the same period,
Worldwide Timeshare
Ownership/Membership
(millions of owners/billions of dollars)
the number of resorts has increased from 57
to 73, with total units growing from 1,900 to
more than 2,300. Timeshare sales amounted to
$173.2 million in 2004-05, and has increased in
line with around 10,000 new owners per annum
and average price growth of 5.3% per annum.
Much of the recent growth has been driven by
the active development and sales by Trendwest
and APVC. The industry has grown from being
almost wholly concentrated on the Gold Coast
in the 1980s to include resorts across Australia
in all States and territories except the Northern
Territory and ACT. At the same time, the spread
Source: Ragatz Associates
of Australian timeshare owners has broadened
across the country.
Recent Growth in Global Timeshare
Recent Growth in Australian Timeshare
In terms of owner numbers, growth in the
The timeshare industry is commonly identified as the fastest growing segment of the global tourism
industry, ahead of cruise shipping. Ownership of timeshares has increased at an average rate of about
12% annually from 1990 to 2003. The number of owners/members of timesharing has increased from
1.53 million in 1990 to 6.7 million in 2003 (see Figure 4.1). Over the same period, developer sales have
increased from around $3.2 billion annually to more than $9.4 billion in 2002.
29
Growth in Tourism and Visitor Growth
Entrance of Major Global Players into Local Market
The growth trends in the global tourism industry clearly demonstrate the growth potential in the Australian
timeshare industry. Australia has recorded average growth of 10% per annum in timeshare owner numbers
in the past 5-6 years, still slightly below the global benchmark of 12% over the past 15 years. The entrance
of major international timeshare players to the local market has, in the cases of Trendwest and APVC,
provided a significant boost for the industry. Further foreign investment in the local industry could be
encouraged if regulatory impediments to foreign direct investment were overcome.
Growth in Tourism and Visitor Growth
The Australian tourism industry is forecast to record
The role of timeshare in facilitating this growth is obvious.
significantly greater demand into the future, mainly in
With more appropriate foreign investment regulations,
the international visitor segment which is likely to be
timeshare could attract a number of new international
driven by growth in the emerging visitor markets of
players to the local market e.g. Marriot. Based on current
China and India. The forecast growth in international
trends, there could be demand for an additional 1,500
tourism anticipates the number of international visitor
timeshare units across 60-70 resorts in Australia, most
arrivals to Australia to increase at an average rate of
of which would be located in regional areas to support
5.6% to 2013-14 according to the Tourism Forecasting
local economic development and job opportunities, and
Committee’s October 2005 forecasts.
to meet the increasing demand for regional tourism and
associated accommodation services.
The National Tourism Investment Strategy suggests that
to accommodate the visitor growth, the tourism industry
For example, the confidence in the industry’s growth
will require a further 60,000 hotel, motel and serviced
potential will see 206 new timeshare units constructed
apartment rooms, 130,000 new employees and a total
in Australia in 2005-06, more than two times the 80
of $80 billion in new tourism infrastructure, including
constructed in 2004-05.
tourist accommodation and tourism related transport
infrastructure.
30
The future growth potential of the industry based on
starting to reach its growth potential in Australia.
recent trends and international growth benchmarks
However, it still remains in its infancy as an industry
is outlined in Table 4.1. In 10 years time in 2014-15,
relative to timeshare in other more developed markets
timeshare sales could reach $479.7 million based on
such as the USA. For example, the most recent research
current sales price growth and ownership number
on the public image of timeshare in Australia indicated
trends. The number of timeshare owners could more
around 7% of Australia’s households rate their chances
than double to 311,500, with the number of resorts
of purchasing timeshare within the next three years
almost doubling to 136 with 3,780 units. As mentioned,
as “about 50-50 or higher”, which is quite substantial
more than 206 new units are planned to be constructed
relative to current market penetration of around 1%-
in 2005-06 alone.
2%. This essentially indicates the potential to double
the industry’s penetration rate to 3-4%, assuming
overcoming regulatory barriers and effective sales and
marketing practices.
Table 4.1
Potential Future Growth in Australian Timeshare Industry
Based on Recent Growth Trends
Current 2004-05
Projected 2014-15
Inventory
73
2,308
136
3,780
Sales Volume
Value of Timeshare Sales ($ million)
Average Price per Interval Week ($)
$173.2m
$15,260
$479.7m
$25,820
Ownership
Number of Timeshare Owners
125,700
116,800
311,500
289,400
It is clear that in the last 5 years timeshare is finally
31
Method of Analysis
Economic Significance of Timeshare in Australia
An Introduction to Economic Significance Analysis
Economic significance analysis can be used to trace the flows of spending associated with specific
activities in a region to identify changes in output, jobs, income and Value add.
The economic significance analysis of the timeshare industry requires a carefully structured approach. As
a result, the AECgroup designed a customised expenditure-based approach that considers the categories
of spending associated with the timeshare industry, and uses the appropriate methods to estimate the
economic significance of each type of spending.
The approach used in this study provides separate
and providing timeshare exchange services, as well as
estimates of the direct and indirect significance of the
businesses providing goods and services to timeshare
industry. This distinction is typically used in economic
owners during their timeshare holiday. These are
significance analysis to separate the first round effects
considered a direct economic significance because they
supported by an activity from its secondary effects. The
are at the businesses at which the demand occurs.
distinction between direct and indirect effects used in
this study follows similar approaches for other industry
In turn, the employees in these jobs spend a portion of
studies.
their income on goods and services in other sectors of
the economy. Additionally, the businesses that provide
32
The direct economic significance of the timeshare
goods and services to the timeshare owners and to
industry includes the output, jobs, income and Value
owners during their timeshare holidays, spend a portion
add created at timeshare resorts, corporate offices,
of their revenue on purchases from other sectors of the
sales offices, and at businesses constructing resorts
economy. This spending typically supports additional
I/O modelling is nationally respected as an economic
the indirect economic significance. In turn, a portion
impact analysis tool. The study area considered in the
of this indirect spending causes further spending by
national study was Australia. Additionally, each State
suppliers and their employees. This cycle is referred to
and Territory, and three specific regional areas, were
as the multiplier process, or “multiplier effect”.
also analysed separately. The following sections present
the results of the AECgroup’s analysis.
The AECgroup quantified the economic significance
using the 1996-97 National Input-Output (I/O) economic
modelling system (see Appendix A for more details).
An Example Interpretation of
Economic Significance Analysis
Method of Analysis
output, employment, income and value add, known as
As a simple example, consider a timeshare resort that
has sold most of its inventory and is occupied yearround by its pool of timeshare owners and exchange
guests. Assume the resort has 100 timeshare units,
and employs about 50 employees. From the most
straightforward perspective, this example resort
supports 50 jobs. But, in addition, the presence of the
resort also supports other jobs in the local economy.
For example, the resort purchases items from a food
distributor that operates a warehouse in the area, and
purchases repair and maintenance services from local
suppliers. Many of the resort employees live in the
region, and spend a portion of their income at local
retail shops. Additionally, while staying at the resort,
the timeshare owners and exchange guests spend
money at local businesses, including restaurants and
visitor attractions. By considering these categories of
spending, one quickly realises that the resort and its
visitors support more than just 50 jobs.
33
Method of Analysis
Definition of Key Economic Significance
Analysis Terms
Terms used in the economic significance analysis are
defined below:
Output: The dollar volume of goods and services
produced or sold, also referred to as gross output
or sales.
Employment: The number of full-time equivalent
jobs (FTEs).
Value add: The change in consumption, investment
and Government expenditure, plus exports of goods
Income: Refers to the employee compensation
and services, minus imports of goods and services
which includes total payroll costs, including wages
due to the industry. It is the preferred measure for
and salary payments, as well as sales
the assessment and contribution of a stimulus to
commissions and any other non-cash
the economy.
compensation.
Survey and Data Collection Process
The AECgroup organised surveys of timeshare entities
A total of 62 of the 73 timeshare resorts in Australia were
and a survey of timeshare owners to collect essential
represented by responses to the survey, accounting for
information for this study. Both surveys were conducted
86% of total units. Four timeshare exchange companies
in February-March 2006. The following surveys were
responded to the survey.
employed for the study:
The survey of timeshare owners consisted of an email
Survey of Active Sales Timeshare Development
Companies;
and mail survey that collected information on each
owner’s most recent timeshare holiday in Australia.
A total of 6,250 timeshare owners responded to the
Survey of Timeshare Resorts Not in Active Sales;
survey, representing around 5% of the total number of
owners.
Survey of Timeshare Exchange Companies; and
Additional information on each of these surveys is
Survey of Timeshare Owners.
provided in the following sections and in Appendix B.
Copies of the survey forms are provided in Appendix C.
34
purchases or expenditure generated by timeshare industry activity. To avoid double counting, the following end user
categories of purchases have been identified:
Purchases of timeshare ownership (i.e. of interval weeks or points);
Owner spending on resort maintenance fees;
Owner / guest spending on exchange services; and
Owner / guest spending during timeshare holidays outside the resort.
These purchases represent the direct output associated with the timeshare industry and are presented in the
following section. The subsequent four sections: Direct Resort Measures; Direct Resort Construction Measures;
Direct Exchange Services Measures; and Direct Holiday Expenditure Measures, describe the estimated direct
employment, compensation and expenditure of these end user purchases.
Direct Economic Significance
The first step in estimating the direct economic significance of the Australian timeshare industry is to estimate the
35
Direct Output
Direct output discussed in this section includes approximately
$173.2 million in purchases of timeshares, $57.7 million of
spending on maintenance fees, $23.0 million spending on
exchange services, and $91.6 million of spending by timeshare
owners and guests while on holiday, yielding total direct
spending, or output of approximately $345.5 million. Each of
these categories is discussed below.
Timeshare has become an increasingly popular way to vacation.
In 2004-05, it was estimated a total of $173.2 million of
timeshare purchases was recorded (not including resales and
net of rescissions) (see Table 5.1). A total of 11,347 equivalent
weeks of timeshare were purchased, at an average price of
$15,260 per week.
Foreigners were estimated to account for 10% of the total
timeshare sales in 2004-05, equating to $17.8 million in foreign
investment.
Timeshare Purchases, 2004-05
Table 5.1
Australia
Timeshare Purchases
Number of equivalent weeks of timeshare purchased
Average purchase price per equivalent week of timeshare
Estimated total purchases of timeshares
(excluding resales and net of rescissions)
11,347
$15,260
$173.2 million
Source: Timeshare entity survey respondents; AECgroup
36
operation and maintenance of their resorts, and to fund their future replacement and refurbishment.
Timeshare maintenance fees in Australia were estimated at $57.7 million in 2004-05 based on an average
fee of $494 per available timeshare week (see Table 5.2). This estimate is consistent with the estimated
maintenance fee revenue calculated from the timeshare entity surveys.
Maintenance Fees, 2004-05
Table 5.2
Australia
Maintenance Fees
Number of timeshare weeks available
Average maintenance fee per week
Total owner and timeshare company
expenditure on maintenance fees
116,900
$494
$57.7 million
Source: Timeshare entity survey respondents; Timeshare owner survey respondents; AECgroup
By paying annual maintenance fees, the owners of Australian timeshare contribute to the ongoing
Timeshare owners have the option to be members of exchange companies in Australia. Some of these
memberships are financial, and others non-financial. Total financial membership fees were estimated at
$13.7 million in 2004-05 (see Table 5.3). Members of exchange companies pay service fees for every
confirmed timeshare exchange. Timeshare exchange has become increasingly popular in Australia, with
around 25% of owners exchanging internationally each year, and another 50% exchanging in Australia at
different accommodation to the timeshare they own. In 2004-05, an estimated 65,000 exchanges were
made by Australian timeshare owners at an average fee of $120, equating to $9.3 million in fees.
37
Timeshare Exchange Services, 2004-05
Australia
Exchange Membership Fees
Number of financial timeshare exchange members
117,000
Average membership fee per owner per annum
$115
Total owner expenditure on timeshare exchange membership fees $13.7 million
Table 5.3
Exchange Service Fees
Number of timeshare weeks exchanged
Average exchange fee per confirmed exchange
Total owner expenditure on timeshare exchange services
65,000
$120
$9.3 million
Source: Timeshare entity survey respondents; AECgroup
In terms of spending by owners and guests while
of this survey was to collect information on traveller
holidaying using timeshare, a total of 100,200 timeshare
expenditure. Respondents were asked to answer several
unit weeks were occupied during 2004-05. This is
questions pertaining to their most recent timeshare
based on the available weeks multiplied by the average
holiday in Australia, indicating the State in which they
industry occupancy rate of 86% in 2004-05.
travelled to, the number of people in their travelling party,
the number of nights they holidayed, and the amounts
The average spending by timeshare guests was
they had spent in various expenditure categories.
collected from the survey of owners. The primary focus
38
children) (see Table 5.4). In other words, the group travelling together on timeshare holidays consists of
just one or two people in some cases, and of more than 5 people in other cases, resulting in an average
of 3.3.
The average length of the timeshare holiday is reported as 7.1 nights, with 6.5 being spend at the timeshare
resort. In addition, respondents reported staying at other types of accommodations for 0.6 nights.
On average, each travelling party occupied 1.1 timeshare units during the timeshare portion of their trip.
This average is greater than one because 9% of respondents indicated using two or more units during
their stay.
Visitor Party Characteristics
Table 5.4
Australia
Number of people in visitor party
Adults
Children (< 18 years)
Total
2.7
0.6
3.3
Number of nights in resort area
Timeshare resort
Other accommodations
Total
6.5
0.6
7.1
Number of units occupied by visitor party
Number of units
1.1
The average size of the travelling party reported by surveyed respondents was 3.3 (2.7 adults and 0.6
Note: 6,250 respondents answered each of these questions.
Source: Timeshare owner survey respondents; AECgroup
39
Survey respondents reported the average amount spent during their most recent timeshare holiday in a
number of categories. The average expenditure per trip for the average timeshare holiday visitor party in
Australia is estimated at $916 (see Table 5.5), comprising largely of dining out and take-away, groceries,
other retail shopping and travel expenses including airfares, motor vehicle hire and fuel. Overall, the
average holiday expenditure per travel party per day is estimated at $129, or $40 per person per day. It
is estimated that around 9% of the expenditure (or $84) is spent at the timeshare resort, with 91% spent
offsite (or $833). Only the offsite expenditure will be analysed in the economic significance analysis.
40
At Resort Offsite
Total
Transport
Taxi fares
Public transport
$0
$0
$0
$0
$0
$0
$177
$0
$3
$1
$44
$95
$177
$0
$3
$1
$44
$95
Dining and Shopping
$53
$0
$0
$18
$165
$114
$114
$56
$219
$114
$114
$74
Activities
Tours
$10
$0
$0
$36
$4
$9
$46
$4
$9
Accommodation
$0
$11
$11
$2
$4
$6
Total
$84
$833
$916
* Includes all beverages bought and consumed in licensed restaurants, cafes, clubs, pubs, taverns and bars and take-away liquor from
liquor stores. Source: Timeshare owner survey respondents; AECgroup
Owner/Guest Expenditure per Travelling Party per Timeshare Trip
Table 5.5
Timeshare is also an exporter of tourism services.
by timeshare owners and guests while on holidays,
Out of the total occupied timeshare interval weeks in
was conducted as follows. The number of unit weeks
Australia in 2004-05 at timeshare resorts, visitors
occupied divided by the number of units occupied per
from overseas were estimated to account for 6% of the
travelling party, estimates the number of timeshare trips
total. This equates to $5.2 million out of the total $91.6
at 92,800 (see Table 5.6). Then the number of trips
million spent while on holiday, or $4.7 million of that
multiplied by the average spending per trip of $916
spent offsite from resorts.
yields $91.6 million. An estimated $8.4 million was
spent at the resorts and $83.2 million spent away from
the resorts.
Owner/Guest Expenditure While on Timeshare Trips, 2004-05
Table 5.6
Australia
Number of timeshare trips
Unit weeks occupied
Units occupied per trip
Number of timeshare trips
100,220
1.08
92,800
Spend per timeshare trip
At resort
Offsite (away from resort)
Total spending per trip
$84
$833
$916
Owner/guest expenditure during
timeshare trips ($m)
At resort
Offsite (away from resort)
$8.4
$83.2
Total owner/guest expenditure
during timeshare trips
$91.6
The next step, calculating the total Australian expenditure
Source: Timeshare entity survey respondents; Timeshare owner survey respondents; AECgroup
41
Direct Resort Measures
In this section, the focus turns from the amounts spent by
consumers, to the job and compensation significance that
are directly supported by this spending. In the case of direct
resort significance, this includes the employees of timeshare
companies, management companies and industry associations.
These employees perform a range of activities including resort
sales and marketing and resort operations, and work at locations
including timeshare resorts, off-site sales offices, corporate
offices and support facilities.
These employees may be categorised into three areas:
1. Resort sales and marketing: employees engaged in the sales
and marketing process, and located at the resort, off-site
sales office, corporate office, or other off-site office;
2. Resort operations: employees related to the ongoing
operation of the resort that are employed directly by the
timeshare company, industry association or management
company, and
3. Exchange companies: employees engaged in timeshare
exchange services located at a corporate office.
The level of employment and compensation for each of these
categories was estimated based on information reported by the
timeshare entities surveyed. Corresponding to the survey form,
respondents that were in active sales categorised employment
and compensation levels in sections for: (1) corporate offices
and call centres; (2) sales offices (whether at resorts or off-site);
and (3) resort management operations. Respondents not in
active sales were asked to combine corporate offices and resort
operations in a single section.
42
employees, while timeshare companies and management companies employed an estimated 795 resort
operations FTE employees, for a combined total of 2,355 as shown in Table 5.7. Salaries, wages and
related income corresponding to these jobs totalled approximately $69.0 million, which includes sales
commissions. This is equivalent to approximately $38,500 per employee.
Sales and Marketing and Resort Operations, 2004-05
Table 5.7
Australia
Timeshare employment (FTE)
Direct employment: Sales and marketing
Direct employment: Resort operations
Total
1,560
795
2,355
Timeshare salaries, wages and related income ($m)
Direct salaries, wages and related income: Sales and marketing
Direct salaries, wages and related income: Resort operations
$68.5
$22.3
Total
$90.8
Timeshare companies employed an estimated 1,560 resort sales and marketing full-time equivalent (FTE)
Source: Timeshare entity survey respondents and AECgroup
Exchange companies employed an estimated 183 FTEs in 2004-05, paying an estimated $7.4 million in
employee salaries, wages and related income (see Table 5.8).
Exchange Services, 2004-05
Table 5.8
Australia
Timeshare employment (FTE)
Direct employment: Exchange services
183
Timeshare salaries, wages and related income ($m)
Direct salaries, wages and related income: Exchange services
$7.4
Source: Exchange company survey respondents and AECgroup
43
Direct Resort and Corporate Office
Construction Measuress
Expenditure by timeshare companies on the construction of new resorts and property acquisition
represents a substantial category of purchases by the industry. By considering the typical amount of
construction expenditure per $1 million in net timeshare sales, it is possible to estimate the amount
of construction expenditure that corresponded to sales that occurred in 2004-05. This matches the
construction expenditure to the timing of sales. While this does not strictly match the timeline of the typical
timeshare project, in which units and facilities are constructed in phases, it provides an approximate
indication of measures useful for the purpose of this study.
Based on this methodology, it was estimated that the $173.2 million in timeshare sales supported
approximately $49.7 million in construction related expenditure (see Table 5.9). This reflects sales
volume multiplied by average product cost including land, minus land costs. The estimated $49.7 million
in construction related expenditure supported an estimated 285 full-time jobs on an average annual basis
during 2004-05. Employees and proprietors in the construction sector earned an estimated $14.3 million
in direct salaries, wages and related income, based on the I/O model.
Construction of Timeshare Resorts, 2004-05
Table 5.9
Australia
Resort Construction
Construction related expenditure ($m)
Direct employment (annual avg. FTE)
Direct salaries, wages and related income ($m)
$49.7
285
$14.3
Source: I/O Model, AECgroup
44
year on refurbishment and capital improvement, as do corporate offices. In 2004-05, it was estimated
that $15.6 million was spent on resort refurbishment and capital improvement, supporting 90 FTE jobs
and direct salaries, wages and related income of $4.5 million in the construction sector (see Table 5.10).
Corporate office refurbishment and capital improvement expenditure was estimated at $4.5 million,
supporting 26 FTE jobs and $1.3 million in direct salaries, wages and related income.
Resort and Corporate Office Refurbishment /
Capital Improvement, 2004-05
In addition to the measures of new timeshare resort construction, each resort also spends money each
Australia
Table 5.10
Resort Refurbishment and Capital Improvement
Direct salaries, wages and related income ($m) $4.5
Corporate Office Refurbishment and Capital Improvement
Direct salaries, wages and related income ($m)
$15.6
90
$4.5
26
$1.3
Source: Timeshare entity survey respondents; I/O Model; AECgroup
45
46
Direct Holiday Expenditure Measures
Since the direct resort measures presented earlier already include the employees of resort outlets such
as on-site restaurants, only off-site spending by owners and guests is considered in this section. While
the jobs at businesses that provide goods and services to timeshare owners and guests during timeshare
holidays are not actually at timeshare resorts, such jobs, and the expenditure that support them, may be
considered part of the industry’s direct economic significance because they represent goods and services
provided directly to timeshare guests.
A breakdown of the total spending by owners/guests while on their timeshare holiday is outlined in Table
5.11. Spending by timeshare owners and guests while on holiday was significant, totalling an estimated
$83.2 million in offsite expenditure, supporting an estimated 740 jobs with $25.8 million in salaries, wages
and related income. These jobs included employees at restaurants, shops, transport companies and tour
services. The largest expenditure categories are airfares, take-away and restaurant meals, shopping and
fuel purchases.
Table 5.11
Total Spending ($m) Offsite
Transport
Taxi fares
Public transport
$17.7
$0.0
$0.3
$0.1
$4.4
$9.4
Dining and Shopping
$16.5
$11.4
$11.4
$5.5
Activities
Tours
$3.6
$0.4
$0.9
Accommodation
$1.1
$0.4
Total
$83.2
Holiday Expenditure by Category Offsite, 2004-05
* Includes all beverages bought and consumed in licensed restaurants, cafes, clubs, pubs,
taverns and bars and take-away liquor from liquor stores
Source: Timeshare owners survey and AECgroup
47
Method of Analysis
The level of direct employment and salaries, wages and related income supported by each of these
categories of spending may be estimated by looking at the typical level of employment and labour income
supported by $1 million in purchases in each of the relevant sectors. Such estimates were prepared using
the I/O model, and are presented in Table 5.12.
As shown, spending by owners and guests while on timeshare holidays is estimated to have supported
736 FTE jobs in Australia. These jobs are organised by the sectors in which the business establishments
are categorised. An estimated $25.8 million of direct salaries, wages and related income was supported
by guest expenditure during timeshare holidays. Retail trade, cafes and restaurants, transport and storage
services, and cultural and recreation services were the main sectors to record direct expenditure.
Holiday Expenditure Offsite, 2004-05
Table 5.12
Sector
Direct Jobs (FTE)
Direct Salaries, Wages and
Related Income ($m)
Direct expenditure by sector
Retail Trade
Accommodation, cafes and restaurants
Transport and storage
Cultural and recreation services
485
141
78
32
$14.9
$4.5
$5.4
$1.0
Total
736
$25.8
Source: I/O Model and AECgroup
48
Method of Analysis
Direct Economic Significance: Summary
The estimated direct economic significance of the
expenditure during timeshare holidays. The direct output
timeshare industry may be summarised as follows
totalled an estimated $344.4 million in 2004-05. The
(see Table 5.13). Direct economic significance for
corresponding direct employment totalled an estimated
each State and Territory are detailed in Appendix B.
3,675 FTE jobs. The resulting direct salaries, wages and
the estimated output, or final demand, satisfied by the
related income totalled an estimated $144.0 million.
timeshare industry includes purchases of timeshares,
maintenance fees, exchange service fees and guest
Direct Economic Significance: Summary, 2004-05
Output ($m)
Direct output
Purchases of timeshares
Owner and timeshare company expenditure on maintenance fees
Owner expenditure on timeshare exchange services
Owner expenditure during timeshare holidays
Total
$173.2
$57.7
$23.0
$91.6
$345.5
Employment (FTE)
Direct employment
Timeshare sales, marketing, resort operations and exchange services
Resort & corporate office construction, refurbishment & capital improvement
Total
2,538
400
736
3,675
Salaries, wages and related income ($m)
Direct employment
Timeshare sales, marketing, resort operations and exchange services
Resort & corporate office construction, refurbishment & capital improvement
Total
$98.2
$20.0
$25.8
$144.0
Table 5.13
Australia
49
Indirect Economic Significance
50
The initial expenditure discussed above begin a spending process in which dollars are cycled through
the Australian economy. The timeshare industry purchases inputs from a variety of other industries in
the form of goods and services, supporting jobs in these industries, and supporting additional rounds of
purchases. Meanwhile, the employees holding direct jobs spend a portion of their disposable income on
goods and services from other sectors of the economy.
The jobs supported by this cycle of spending, or multiplier process, are referred to as the indirect economic
significance, and are quantified in the I/O model. The number of indirect jobs and the amount of income
that results from this multiplier process will vary from region to region, depending on factors such as each
region’s industry structure, wages, spending and saving patterns, and connections to other economies.
The following sections discuss the indirect output supported by the timeshare industry, and the related
employment and income.
The activities of timeshare businesses support
indirect output in two ways. First, timeshare businesses
purchase various inputs, such as advertising, and
these purchases represent output generated by other
industries. Second, expenditure by employees of
timeshare businesses on goods and services such as
transportation, groceries, and entertainment represent
purchases of output generated by other industries. The
output of other industries that are supported by the
timeshare industry is referred to as indirect output, or
Type 1 I/O multiplier. Similarly, at timeshare businesses
serving timeshare guests, indirect output is supported
both by the purchases of the businesses, and by the
purchases of the businesses’ employees, i.e. in turn,
the businesses generating the first round of indirect
output also require inputs, supporting further rounds of
indirect output in the multiplier process.
Information on timeshare business spending was
Indirect Output
collected in the survey of timeshare entities, in which
respondents reported levels of non-compensation
expenditure, nationally and by State. Survey respondents
reported this information in separate sections on
corporate offices and call centres, sales offices, and
resort operations offices.
Based on this survey information, it is estimated
timeshare businesses spent $67.3 million on noncompensation expenditure related to sales, marketing
and exchange activities, and $34.2 million related to
resort operation activities (see Table 5.14).
51
Timeshare Non-Compensation Expenditure, 2004-05
Australia
Table 5.14
Sales, Marketing and Exchange ($m)
Sales and marketing
Administration and general
Sales off-related operations and maintenance,
Other sales related expenses and corporate expenditure
Taxes
Sub-total
$33.9
$19.7
$5.0
$8.7
$67.3
Resort Operations ($m)
Administrative and general
Departmental operating supplies
Utilities and waste management
Repairs and maintenance
Financial services
Property lease or rental expenses
Telecommunications
Taxes
Other
Sub-total
$7.5
$6.2
$3.6
$3.6
$0.6
$0.6
$1.0
$5.2
$5.9
$34.2
Total non-compensation expenditure
$101.4
Source: Timeshare entities survey; AECgroup
Using the I/O model, which quantifies the input-output relationship between industries, and
information presented above on expenditure of timeshare businesses and the estimated direct
significance of the timeshare industry, the AECgroup estimated indirect output of $352.8 million
(see Table 5.15). The sectors to benefit most from this output were accommodation, cafes
and restaurants, property and business services, construction, manufacturing, retail trade and
transport and storage services.
52
Table 5.15
Sector
Australia
Expenditure by sector
Accommodation, Cafes and Restaurants
Property and Business Services
Construction
Manufacturing
Retail Trade
Transport and Storage
Wholesale Trade
Finance and Insurance
Communications
Cultural and Recreational Services
$124.5
$48.8
$41.5
$33.4
$26.1
$23.8
$10.9
$9.5
$8.7
$7.0
Total
$352.8
Source: I/O Model and AECgroup
Indirect Output Supported by the Timeshare Industry, 2004-05
Indirect Employment and Income
As previously Stated, I/O tables include a measure of the portion of sales by an industry that result in income
for employees and proprietors in that industry. Based on these relationships, it is possible to estimate the
number of indirect jobs. The AECgroup’s analysis, based on estimated direct expenditure and the I/O
Model, shows that approximately 2,111 indirect FTE jobs in various sectors of the Australian economy
were supported by timeshare activity in 2004 (see Table 5.16). The estimate includes approximately
930 jobs in the accommodation, café and restaurant sectors, and around 230-240 jobs in each of the
construction and retail trade sectors.
53
Indirect Employment Supported by the Timeshare Industry, 2004-05
Indirect employment (FTE)
Accommodation, Cafes and Rest
Construction
Retail Trade
Property and Bus Services
Manufacturing
Agriculture
Wholesale Trade
Total
931
242
230
175
165
100
63
56
40
34
2,111
Source: I/O Model; AECgroup
Australia
Table 5.16
Method of Analysis
The corresponding indirect salaries, wages and related income amounted to an estimated $81.2 million,
as presented in Table 5.17. Of this, approximately $29.6 million occurred in the accommodation, café and
restaurant sectors, and $10.1 million in property and business services.
Indirect Salaries, Wages and Related Income Supported by the Timeshare Industry, 2004-05
Australia
54
Accommodation, Cafes and Rest
Property and Business Services
Construction
Manufacturing
Retail Trade
Wholesale Trade
Communications
Total
$29.6
$10.1
$8.5
$7.7
$7.2
$5.7
$2.9
$2.9
$1.6
$1.4
$81.2
Source: I/O Model; AECgroup
Table 5.17
Indirect salaries, wages and related income ($m)
estimated at $22.7 million, with $16.8 million paid in
of tax revenue for Commonwealth, State and Local
Federal Government taxes and $5.9 million in State
Governments through the activities of timeshare
Government taxes (see Table 5.18). GST ($11.8
companies, owners and other resort guests, and
million), property taxes ($3.7 million) and company
through the indirect significance the industry has on
tax ($3.6 million) are the largest tax categories for the
other sectors of the economy. The AECgroup collected
industry.
information in its survey of timeshare entities to estimate
the level of taxes generated by the industry.
Total direct taxes paid by the timeshare industry were
Direct Fiscal Measures, 2004-05
Fiscal Significance
The timeshare industry generates significant levels
Table 5.18
Australia
Timeshare property taxes ($m)
Timeshare resort property taxes
Sales office, corporate office or call centre property taxes
Sub-total
$2.9
$0.8
$3.7
Taxes generated by timeshare employment ($m)
State Government payroll taxes
Federal Government fringe benefits tax
Sub-total
$2.2
$0.5
$2.7
Other taxes ($m)
Federal Government goods and services tax
Federal Government company tax
Federal Government capital gains tax
Sub-total
$11.8
$3.6
$0.9
$16.3
Total ($m)
Federal Government taxes
State Government taxes
Total taxes
$16.8
$5.9
$22.7
Source: Timeshare entities survey; I/O Model; AECgroup
55
Summary of Economic Significance
The economic significance of the timeshare industry on
Direct value add of $178.4 million plus indirect
the national economy in 2004-05 can be summarised
value add of $164.5 million, resulting in total value
as (see Table 5.19):
add of $342.8 million.
Direct output of $345.5 million plus indirect output
The major proportion of the economic significance is in
of $352.9 million, resulting in total output of $698.4
regional areas outside capital cities, with 70 out of the
million;
73 timeshare resorts (or 96%) located in regional areas,
and almost all corporate offices of major timeshare
Direct employment of 3,675 FTE employees
companies located on the Gold Coast in Queensland.
plus indirect employment of 2,111 FTE employees,
resulting in a total of 5,786 FTE employees;
A summary of economic significance by State and
Territory is provided in Appendix A, and confirms the
Direct income of $144.0 million plus indirect
greatest economic significance occurs in Queensland,
income of $81.2 million, resulting in total income
New South Wales and Victoria where much of the
of $225.2 million; and
industry’s activity is centred.
Economic Significance of the Timeshare Industry:
National Summary, 2004-05
Indicator
Direct
Indirect
Total
Output ($m)
$345.5
$352.9
$698.4
Employment (FTE)
3,675
2,111
5,786
related income ($m)
$144.0
$81.2
$225.2
Value add ($m)
$178.4
$164.5
$342.8
Table 5.19
Salaries, wages and
56
Timeshare and Economic Development in Australia
demonstrated in Chapter 5 and includes the direct
employment of 3,675 full-time employees and indirect
employment of a further 2,111 full-time employees
across Australia. It contributes an estimated $342.8
million to Australian economic growth. The industry
contributes estimated taxes of $22.7 million.
What should be noted regarding timeshare’s economic
significance is that the major proportion of activity
occurs in regional areas. There is relatively little
timeshare in capital cities, rather it is concentrated at
the Gold Coast in Queensland, Northern New South
Economic Influence of the Timeshare Industry
The economic influence of timeshare in Australia is
Wales at Port Macquarie and Coffs Harbour, in regional
Victoria, and Western Australia’s regional coast.
57
Timeshare and Regional Economic Development
58
The economic significance of timeshare can be substantial in regional areas and is demonstrated by the
analysis over (see Table 6.1). Economic significance analysis has been conducted for three select regions
where timeshare is prominent: the Gold Coast in Queensland, Port Macquarie in New South Wales, and
Kyneton in Victoria. The analysis indicates the sizeable and relatively significant contribution of timeshare
local expenditure to these regional economies, particularly in terms of job opportunities.
Gold Coast
The Gold Coast is the epicentre of the Australian timeshare industry, recording 13 timeshare resorts
across Classic Holidays, APVC, Trendwest and the Holiday Club. It is also home to the head offices of
Trendwest, APVC, Classic Holidays, RCI, I.C.E. Asia Pacific, Dial An Exchange and Interchange Vacation
Club. Overall, there were an estimated 2,571 FTE people either directly or indirectly employed by the
timeshare industry on the Gold Coast in 2004-05, supporting salaries and wages of $98.3 million. The
value add to gross regional product (GRP) was estimated at $147.2 million, or almost 2% of what is a
sizable regional economy of more than $10 billion in GRP terms.
Table 6.1
Indicator
Direct
Indirect
Total
Output ($m)
Employment (FTE)
Value add ($m)
$164.5
1,630
$63.3
$75.1
$154.0
941
$35.0
$72.2
$318.5
2,571
$98.3
$147.2
Port Macquarie
There are 4 timeshare resorts at Port Macquarie, on the north coast of New South
Wales, generating local output of $17.5 million. This represents a significant
concentration in what is mainly a regional centre with around 42,000 persons.
Direct and indirect employment due to timeshare in the region is estimated at 146
jobs, supporting $4.8 million in wages (see Table 6.2). The value add to the local
economy is estimated at $8.2 million.
Table 6.2
Port Macquarie, 2004-05
Indicator
Direct
Indirect
Total
Output ($m)
Employment (FTE)
Value add ($m)
$9.1
94
$2.9
$4.2
$8.4
52
$1.9
$3.9
$17.5
146
$4.8
$8.2
Gold Coast, 2004-05
59
60
Kyneton
In some cases, timeshare can be a “make
or break” component of the local economy.
Kyneton is just a small community of
approximately
4,500
people,
85km
northwest of Melbourne, but records one
sizeable timeshare resort which generates
$6.9 million in local expenditure. This resort
alone contributes 69 jobs in the local area,
supporting $2.0 million in wages (see Table
6.3). Overall, the timeshare resort contributes
$3.3 million in value add to the local economy,
which is significant in terms of the local
economy’s size.
Kyneton, 2004-05
Table 6.3
Indicator
Direct
Indirect
Total
Output ($m)
Employment (FTE)
Value add ($m)
$3.6
49
$1.2
$1.7
$3.3
20
$0.8
$1.6
$6.9
69
$2.0
$3.3
growth potential. Forecasts of international visitor
arrivals indicate sharp growth over the next 20 years,
particularly from the emerging markets such as China
and India. The National Tourism Investment Strategy
indicates there could be demand to 2014 for an
additional 63,000 hotel, motel and apartment rooms
to support the demand increase, driving employment
growth of 130,000 jobs and a further $86 billion of
tourism infrastructure investment across Australia.
Timeshare is well placed to play an integral role
in the growth of the tourism industry. The global
growth in the industry evidences the popularity of
the concept in overseas markets. With international
timeshare exchange activity increasing rapidly, there
Role of Timeshare in the Tourism Industry
The Australian timeshare industry boasts strong
is the clear chance for timeshare to help facilitate a
share of the growth in international visitor arrivals
to Australia. Much of the growth in tourism will also
occur in regional areas of Australia where timeshare
is presently concentrated. This trend reflects the
increasing attractiveness of nature and adventure
tourism.
61
Regulatory Impediments to Timeshare Growth
The primary impediment to more rapid timeshare growth and economic contribution in Australia is
Government regulation. The timeshare industry was the subject of a recent enquiry by the Parliamentary
Joint Committee on Corporations and Financial Services, culminating in the report Timeshare: the Price
of Leisure. ATHOC, the industry representative body, disagrees with certain recommendations made by
the Committee. These same concerns have been again raised by the Australian Government’s National
Tourism Investment Strategy. A background to the Parliamentary Inquiry and a discussion of these issues
is presented below.
The Parliamentary Committee focused on a number
consumers was paramount and supported the retention
of key issues. It determined that while the nature of
of the existing regulatory framework. This included a
timeshare is confusing, it is essentially a tourism product,
recommendation to insert into the Corporations Act 2001
or a consumable, rather than an investment analogous
a separate chapter devoted specifically to timeshare. In
to investing funds in a managed investment fund or
relation to disclosure, the Committee recommended
buying property. At the same time, the Parliamentary
timeshare sellers need to make it clear timeshare does
Committee concluded regulation of timeshare under the
not involve ownership of real property.
Corporations Act, 2001, and the definition of timeshare
as a financial product, remains appropriate.
In response to concerns regarding the cooling off
period, the Parliamentary Committee recommended
The Parliamentary Committee recognised the difficulties
any offer made in the course of selling timeshare should
of finding a ‘good fit’ for timeshare in current legislation
be available for one week after the offer was made, to
and noted the treatment of timeshare as an investment
avoid consumers being pressured to sign immediately
product in terms of regulation was inconsistent with the
or risk losing the opportunity. It also recommended a
reality that timeshare is, and must be, marketed as a
cooling off period of 10 days, plus ‘time-outs’ when
tourism product. It is also noted the legislation inhibits
more information is sought, and advice to that effect is
the development of a viable resale market for timeshare.
clearly disclosed in writing.
They concluded the ability to protect the rights of
62
an Australian Financial Services license. It was also of the view that a resale market is unlikely to emerge
in the near future, due to its small size, and the potential competition a secondary market poses for the
existing industry, selling the identical product. The Committee recommended that the Corporations Act
2001 require timeshare contracts to include a minimum buy back amount.
Specific responses by ATHOC to each of the Committee’s recommendations, supported by the findings
of the National Tourism Investment Strategy, are discussed below:
Prohibition on Selling Interests in Real EState: Recommendation 9 proposes mandatory
disclosure by promoters that the acquisition of an interest in timeshare “does not involve any form of
ownership of real property”. However, by definition, a Timeshare Club is backed by real eState which
is beneficially held in trust on behalf of the members of the Club. Upon the termination of the Club, the
members share in a distribution of the net proceeds from the sale of the real eState. In summary, timeshare
involves an interest in real eState, as a club cannot sell points unless they have real eState backing. At the
termination of a club, members share in the proceeds of the sale of the real eState;
Mandatory Buy-back Requirement: Recommendation 16 proposes that timeshare contracts
should include a minimum guaranteed buy back amount. This would require timeshare to reduce the
amount of the revenue from each sale by the amount of the buy back. This recommendation, if enacted,
would destroy the economic viability of the timeshare industry in Australia. A compulsory ‘buy back’
regime for timeshare, which does not exist for other businesses, is unnecessary. Secondary markets exist
in other countries, where timeshare thrives, and Australia should be no exception. By analogy, this is akin to
a proposal to force property developers to agree to buy back investment properties at a pre-agreed price.
The apparent objective of this recommendation is to overcome the absence of a substantial secondary
market for timeshare interests. It is suggested that this is a matter best left to market forces and that the
regulatory barriers to entry for secondary traders be significantly reduced to allow small businesses to
operate timeshare resales businesses, as is the case in the USA. Furthermore, the committee’s immediate
concerns relating to the current viability of a secondary sales market in timeshare interests are more
appropriately dealt with by disclosure to consumers. Current PDS disclosure obligations under Part 7.9 of
the Corporations Act are already interpreted by promoters to require unequivocal disclosure regarding the
availability (or lack) of resale services and the circumstances and viability of a secondary sales market.
In relation to the resale market, the Parliamentary Committee noted operators in the market would acquire
63
Pressure Selling: Several of the recommendations in the report relate to the perception that the
timeshare industry utilises “pressure selling” tactics by requesting consumers to make a buying decision
on the day of the sales presentation. There is scant recognition given by the committee to the fact that the
existing legal regime already has specific measures in place to address this issue including:
Contractual cooling-off rights;
Statutory remedies under the Corporations Act and, in particular, the prohibitions and remedies
for misleading and unconscionable conduct already applied to timeshare under Division 2
of Part 2 of the ASIC Act (assuming these can be easily retained or re-translated into the new
legislative package);
Scrutiny of the Responsible Entity’s compliance with its statutory obligations by a Compliance
Committee and an independent Compliance Auditor;
Statutory remedies under various State and Territory Fair Trading Acts;
Access to the ASIC-approved external and independent complaints resolution processes
available at no cost to consumers; and
Common law contractual remedies.
It also needs to be recognised that the ASIC-mandated cooling-off rights for consumers were always
intended to be the all-encompassing antidote to the “on the day decision” issue. The process presently
involves: Prominent disclosure of cooling-off rights and expressly alerting consumers to their cooling off
rights via the mandatory provision to consumers of a written notice summarising cooling-off rights. It is
therefore strongly asserted that ASIC’s existing regulatory response, which is highly prescriptive, already
fully serves its intended purpose in a reasonable and balanced manner.
64
Recommendation 12 proposes that there should be a mandatory cooling off
period of 10 business days for all timeshare sales, irrespective of whether
the timeshare company is a member of ATHOC or not. The industry body
should not be threatened by removing incentives for members who comply
with a strict code of conduct and ethics. At present, a timeshare promoter
who is a member of ATHOC and is a signatory to its Code of Conduct and
Code of Ethics is only required to give consumers a 5 working day cooling
off period. Removing the reduced period for timeshare sellers who are
members of ATHOC will reduce a major incentive for operators to belong
to this important Industry body which currently offers consumers an
additional layer of protection through imposition and policing of a mandatory
Code of Practice and Code of Ethics. Furthermore, ATHOC plays a vital
role as a focus point for the industry’s lobbying activities. A weakening
of its position would result in fragmented and possibly conflicting lines of
communication with legislators and regulators. In summary, the adoption
of this recommendation without modification may well doom ATHOC as a
viable organisation.
Proposal for a “stop-go” Extension of the Cooling
Off Period: The proposal that the ‘cooling off’ period is extended by
every subsequent request for information is unworkable and unrealistic.
Recommendation 14 proposes that the cooling-off period for a timeshare
sales contract should be “suspended” during the interval between the
customer asking for further information, and that further information being
provided. It is practically unworkable for a number of reasons, not least of
which is the difficulty in ascertaining when legitimate “requests for further
information have been made” and when they have been “adequately
responded to”. Also, the proposal ignores the fact that the cooling off period
is intended to provide consumers with an opportunity to request further
information, seek advice and, if not satisfied, to avoid the transaction.
Threat to the Industry Representative Body:
There is no apparent precedent in the commercial world for the proposed
“stop-go” cooling off period and regard it as unworkable.
65
Regulatory Improvements
One benefit to arise from the Parliamentary Inquiry was
Recommendation 17, which proposed that “fully sold
timeshare schemes should be able to sell interests
in their own timeshare scheme without holding an
Australian financial services license.” This is a very
important improvement for sold out schemes in that it
facilitates the trading of interests.
66
in this respect should not be constrained but managed
They begin with the review of the above-mentioned
appropriately. Perhaps most importantly, timeshare’s
recommendations made in the recent Joint Committee
importance to regional economic development needs
Inquiry into timeshare regulation. In addition to this,
to be acknowledged. Timeshare in Australia is now a
regulations regarding foreign investment regulations
product with an improving public image and above-
relevant to timeshare property investment need to be
average satisfaction levels. Government is urged to
reviewed. The resurgence of the Australian timeshare
continue supporting the local industry in light of its role
industry has been closely linked to the entrance of
in growing tourism in Australia’s regions.
global timeshare developers and therefore opportunities
Strategies to Enhance the Role of Timeshare
The strategies to enhance the role of timeshare are clear.
67
References
References
AEC Group Ltd (2006)
Australian Timeshare Owners Survey, Brisbane.
American Resort Development Association (2004).
Economic Impact of the Timeshare Industry on
the U.S. Economy, Washington D.C.
Australian Timeshare Entity Survey: Active Sales,
Brisbane.
Jones Lang La Salle Hotels (2003)
Timeshare in Australia, Sydney.
Ragatz Associates (2003)
Australian Timeshare Entity Survey: Exchange
Resort Timesharing: Worldwide (2003 Edition
Companies, Brisbane.
Summary Report), RCI, New Jersey.
Ragatz Associates (2002)
Australian Timeshare Entity Survey: Non-active
Resort Timesharing in Australia and New
Sales, Brisbane.
Zealand (2002 Edition), RCI, New Jersey.
American Resort Development Association (2005).
USA Industry Snapshot (2004), Washington D.C.
Sparks, B. et al (2005).
Derived Customer Value Project –
“Conceptualisation and Measurement of Derived
Customer Value: An Application to the Timeshare
Industry”, Griffith University, Gold Coast.
68
Appendix A
Summary by State/Territory, 2004-05
Indicator
QLD
NSW
VIC
SA
WA
TAS
NT
ACT
Total
643
470
1,113
1,006
410
1,416
51
20
71
52
30
82
104
60
164
0
0
0
0
0
0
3,675
2,111
5,786
Employment (FTE)
Direct
Indirect
Total
1,818
1,150
2,968
Direct
Indirect
Total
$74.1
$43.0
$117.0
$29.1
$18.0
$47.1
$33.9
$16.1
$50.0
$1.1
$0.4
$1.5
$1.8
$1.2
$3.0
$4.0
$2.4
$6.4
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$144.0
$81.2
$225.2
$92.3
$87.9
$180.2
$41.0
$36.0
$77.0
$35.7
$32.4
$68.2
$1.0
$0.9
$1.9
$2.6
$2.4
$5.1
$5.7
$4.7
$10.5
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$178.4
$164.5
$342.8
Value add ($m)
Direct
Indirect
Total
Economic Significance by State/Territory
Table A.1
69
Appendix B: Input-Output Model
Appendix B
This report outlines the economic significance of the timeshare industry on the Australian, State/Territory
and select regional economies. The analysis undertaken employs an input-output (I/O) methodology.
Economic Significance Model
I/O analysis provides an accurate/detailed “picture” of the structure of an economy as it includes all
transactions (purchases and sales), which occur throughout the economy being examined. This allows
for the analysis/measurement of intersectoral relationships and interrelationships within the economy.
The I/O analysis measures economic significance in different ways, which are commonly measured and
discussed as the first and second round effects*. Specifically, the measures that are examined within an
I/O analysis include:
Output.
Income.
Employment.
Value add.
* First round or direct effects are those from the expenditure by the industry purchasing additional goods from other industries,
where as second round effects are those from the supplying industries increasing their purchases to meet the additional
demand. The second and subsequent rounds of purchasing are termed the indirect effects.
70
Appendix B
Output
Value add
Output measures the change in gross sales throughout
Value add or gross State/domestic product^ (GDP or
the whole economy by summing all the individual
GSP) measures only the net activity at each stage of
transactions resulting, directly and indirectly, to the
production. GSP is broadly defined as the change in
economic stimulus. Output is also useful in providing
consumption, investment and Government expenditure,
an indication of the degree of structural dependence
plus exports of goods and services, minus imports of
between sectors of the economy. Output is, however,
goods and services. GDP/GSP are the preferred measure
regarded as overstating the impact on the economy as
for the assessment and contribution of a stimulus to the
they count all goods and services used in one stage
economy.
of production as an input to later stages of production,
hence counting their contribution more than once.
^ In a region, the term used is Gross Regional Product (GRP),
at the Queensland State level the term used is Gross State
Income
Income measures the change in wages and salaries
paid to employees of the industry under consideration
and to other industries benefiting from the stimulus to
Product (GSP), and at the national level, the term used is
Gross Domestic Product (GDP).
Appendix B: Input/Output Model
Input/Output Measures
the economy.
Employment
Employment measures the number of jobs created
or lost by the shock, both directly and indirectly. In
the case of flow-on impacts it should be noted that
short-term response to reduced demand may be for
employers to put off temporary staff, however, if the
shock is sustained for any period of time then it is likely
to impact on the number of full time positions available
within the industry
71
Appendix B: Input-Output Model
Appendix B
Limitations of Input-Output Analysis
Limitations or qualifiers that should be raised when using input-output analysis include:
The inputs purchased by each industry are a function of the level of output of that industry. The input
function is generally assumed linear and homogenous of degree one (which implies constant returns to
scale and no substitution between inputs).
Each commodity (or group of commodities) is supplied by a single industry or sector of production.
This implies that there is only one method used to produce each commodity and that each sector has only
a single primary output.
The total effect of carrying on several types of production is the sum of the separate effects. This
rules out external economies and diseconomies and is known simply as the additivity assumption. This
generally does not reflect real world operations.
The system is in equilibrium at given prices. This is obviously not the case in an economic system
subject to external influences.
In the static input-output model, there are no capacity constraints so that the supply of each good is
perfectly elastic. Each industry can supply whatever quantity is demanded of it and there are no capital
restrictions. This assumption would come into play depending upon the magnitude of the changes in
quantities demanded.
The input-output model is an optimisation model that allocates resources between sectors to their most
efficient use. This is not expected to happen all of the time in the “real world” and as such results from the
input output analysis may overestimate the actual impact delivered on ground.
Input-output techniques provide a solid and well-accepted approach for taking account of the interrelationships between the various sectors of the economy in the short-term and hence are an appropriate
tool for determining the direct and indirect economic significance of the Australian timeshare industry.
72
Contact
Contact
Australian Timeshare and Holiday Ownership Council Ltd
M
PO Box 7718
Gold Coast Mail Centre, Bundall Q 9726
Australia
T
+61 7 5574 2622
F
+61 7 5574 2633
E
[email protected]
W
www.athoc.com.au
73
Australian Timeshare and Holiday Ownership Council
Australian Timeshare and Holiday Ownership Council Ltd
M
PO Box 7718
Gold Coast Mail Centre, Bundall Q 9726
Australia
T
+61 7 5574 2622
F
+61 7 5574 2633
E
[email protected]
W
www.athoc.com.au
Timeshare
Holidays Forever - Growing Regional Tourism

Timeshare

Transcription

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