Global Vacation Ownership Industry

Global Vacation Ownership Industry
An overview of global and African Trends
About Us
Group RCI is owned by Wyndham Worldwide
One of the world’s largest ($3.8 Billion of Net Revenues in 2006)
hospitality companies across six continents
Group RCI is a key component of the
Wyndham Worldwide group
About Us
Wyndham
Worldwide
Wyndham Worldwide
‘WYN’
‘WYN’
Wyndham Hotel
Hotel Group
Wyndham
Group
Lodging
•
•
•
World’s largest lodging
franchisor as measured
by the number of
franchised hotels with
over 539,000 rooms and
nearly 6,500 properties
World’s largest lodging
loyalty program, based
on number of
participating hotels.
26% of WYN’s 2006
EBITDA
RCI NetworkWyndham
WyndhamVacation
Vacation Ownership
RCI GlobalGroup
Vacation
Ownership
Vacation
VacationExchange
Exchangeand
andRentals
Rental
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•
•
World’s largest
vacation exchange
network with more
than 3.4 million
members
Leading European
Vacation Rental
Group with more
than 60,000
properties
33% of WYN’s 2006
EBITDA
Vacation Ownership
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•
•
World’s largest
vacation ownership
business with over
20,000 units, approx.
150 resorts and over
800,000 owners
Leading provider of
points-based
timeshare
41% of WYN’s 2006
EBITDA
About Us
• Established in 1974
• Over 4,000 resorts
around the world
• Over 3.4 million member
families
• Over 4 million weeks of
accommodation
• 8 out of 10 holiday
exchanges worldwide
are confirmed with RCI
Vacation Exchange
Vacation Rentals
• Over 60,000 properties
under rental agreement
• Marketing in over 25
countries
• Property Management of
over 22,000 units from
key holding to full
property management
• 1.1 million reservations
per annum
Timeline
6M
Owners
5M
4M
High-End
Fractionals
3M
2M
1M
Major Exchange
Companies
Founded
1970s
Growth
Floating Time
1980s
Branded
Hoteliers
Destination
Clubs
Clubs & Points
1990s
Condo-Hotels
2000s
•
506 resort timeshare projects
•
Over 5,500 resort timeshare projects
•
155,000 timeshare owners
•
Over 6.5 million timeshare owners
Leisure Shared Ownership Summary
The industry is comprised of several product types:
• Vacation ownership (timeshare) - purchased vacation interval, typically a
week or similar point value, backed by a deeded interest or similar legal
structure
• Fractional and Private Residence Clubs – purchased vacation interval,
typically four to six weeks, backed by a deeded interest or similar legal
structure
• Condo Hotels – one hotel room purchased, four to six weeks personal
use, balance of year rented through hotel management company,
typically a large financial investment goal driving purchase
• Destination Clubs – purchased club membership that provides vacation
rights at high-end accommodations; properties typically cost the club
between $1 and $5 Million each. No underlying equity ownership in most
cases
• Whole Ownership Vacation Homes and Condos – deeded interest in real
estate, 100% owned property. Rental ability based on owners decision
Purchase Price
and Annual
Maintenance Fee
$16,200 average
Maintenance = $471
average
$100,000 to $400,000
Maintenance = $10k to
$35k
$300,000 to
over
$1 Million
$80,000 to $400,000*
Maintenance = $10k to $35k
*a portion may be returned, 80% typically
Global Sales Overview by Major Market
Canada
0.3 0.4
1.1
Europe
United States
8.6
1.3
1.6*
0.2
0.4 0.2
Middle
East
0.1 0.3
Caribbean
Mexico
0.2
China
0.2
India
0.2
Japan
Asia
* $2.7 total, with
overlap with U.S.
Industry Revenues for 2005
($ in Billions)*
Latin
America
0.2
Southern
Africa
13 – Vacation Ownership
2 – Fractional, PRC,
Destination Clubs
0.2
* Excludes Vacation Whole
Ownership Sales and Condo Hotels
Sources - American Resort Development Association (ARDA), Bear, Stearns & Company, Inc., NorthCourse (a subsidiary of Wyndham Worldwide),
PricewaterhouseCoopers, Ernst & Young 2006
Australia 0.3
and NZ
United States – Industry Overview
• 1,600 physical timeshare resorts operating in the United States with 155,000 units
• 4.1 million owners/households
• Occupancy at U.S. timeshare resorts averaged nearly 82% in 2005 — compared to a
67% occupancy rate for U.S. hotels during the same period
• A variety of ownership systems are in operation - points system 31%; floating unit
and floating season 21%; traditional fixed unit/fixed interval 39%
• Ownership conveyance method
– Conventional deed - 60%
– Right-to-use, undivided interest, deed in trust, and or leasehold, – 40%
• 94% of owner’s resort intervals are affiliated with one of the major exchange
companies – RCI and/or Interval International
• Vacation ownership resorts are in 47 of 50 U.S. states
Source – ARDA, Ernst & Young 2006
United States – Product Overview
Price Per Week of Annual Use
Under $5,000
6.9%
$5,000 to $9,999
17.3%
$10,000 to $14,999
23.1%
$15,000 to $19,999
24.3%
$20,000 to $24,999
16.2%
$25,000 or more
12.1%
Total
100.00%
Median
$15,000
Average
$16,200
Source – ARDA 2006
Note: Percentages do not add to 100% due to rounding
Summary Global
• Strong growth trends in US and Mexico
• Continued growth of the fractional real estate market
• Low consumer penetration
• Sales and marketing practices adaptive and successful
• High consumer satisfaction with vacation ownership
Market Place Assessment
AFRICA VACATION OWNERSHIP MARKET TRENDS - Primary
 High market penetration and a consolidated Club environment
 Not enough new, high quality developments coming online
 High inventory/development costs
 Declining developer value proposition within the Vacation
Ownership market – Low prices
 National Credit Act and Consumer Bill – Changing the way we do
business
 The South African Vacation Ownership market continues to show
positive growth in excess of 17% annually
Market Place Assessment
AFRICA VACATION OWNERSHIP MARKET TRENDS
 275,000 households own almost 400,000 weeks
 Vacation ownership in the rest of the African continent remains
untapped
 Vacation Ownership industry growth of 17% annually since 2002
 Local vacation ownership sales exceeded R1,1billion 2007
 RCI enrolled in excess of 17 000 new members in 2007
 RCI sent 500 000 South Africans on vacation locally
 RCI was responsible for 16 000 inbound tourists
 Last year, we sent 59 576 South African members on vacation abroad
Audited by Deloitte’s
South African Tourism Trends
• 230 plus dedicated timeshare resorts
• 260 000 families /investors in the timeshare industry owning
around 400 000 weeks/intervals
• 85% average occupancy
• 2.8 million room nights – average stay of 5.9 nights
• At present, a R2 billion industry
• Timeshare is a mature industry in the current tourism economy
of SA
• Timeshare has renewed growth potential in SA
• Timeshare industry in SA is represented and regulated by a
highly regarded organisation – TISA (Timeshare Institute of Southern
Africa
South African Tourism Trends
• Domestic travel is the largest component of South Africa’s tourism market
• 36 million trips in 2006 undertaken by 14.7 million of the 44.3 million
population
• Representing total spend of USD 3 billion
• The pattern of domestic tourism is driven principally by school holidays
• 35.6 percent of the total spend
• Domestic holiday trips represent USD1 billion
• 33 percent of the total tourism spend
• Average nights spent on domestic holidays is 6.3 nights per trip
• Average spend per holiday trip is USD250
South African Tourism Trends
• 14.2 million nights were spent in self-catering, guest house, B&B
or game lodge accommodation
• International tourism arrivals in South Africa have witnessed
sustained growth since transition
• Total visitors during the 12 months to September 2006 were
recorded at in excess of 8 million
• 13 percent growth over the previous year
• The European market is characterised by significant seasonality
• Visits from the UK, Ireland, Germany, the Netherlands and
Denmark arriving in the summer and autumn months, October to
March
Travel Trends
• Africa has outpaced all other regions with almost twice the rate of
global growth reaching 8.1% in 2006, following an already strong
2005. This star performance was led by Sub-Saharan Africa (+9.4%),
while North Africa (+5.8%) also ended the year above average. Major
destinations such as South Africa, Kenya and Morocco all continued
to post excellent results
• Travellers are better informed and have become more adept at
weighing their options
• Number of people researching and booking on the internet is
growing
Source: World Tourism Organization
Holiday Profile Summary
• The top holiday types are:
– Beach/Sea Holidays (17%)
– Country Life/Mountains (12%)
– Summer Sun (12%)
• The top accommodation types are:
– Timeshare (35%)
– Self Catering (21%)
– Hotels/B&B (38%)
– Other (6%)
Holiday Profile Summary
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Most desired Group RCI destinations:
–
–
–
–
–
–
–
–
Mauritius
Mocambique
Zanzibar
Seychelles
Maldives
Namibia
Zambia/Victoria Falls
Lake Malawi
• The most frequently requested unit configuration
– 2 bedroom 2 bathroom +- 80 -110sqm
• The most important or frequently requested onsite or nearby
facilities are beach, restaurant and swimming pool
Summary
• Vacation Ownership is still a growing Industry
• A changing industry – share ownership and leisure real estate
• Consumers want more quality, better value and greater
choice
• A need to build and deliver quality resorts and vacation
experiences
• A need for new developments
• A need for more developers
• A need to raise the value and perception of timeshare/shared
ownership to attract new entrants to the market
• A need for smarter marketing techniques
• We need to remain a self regulated and cohesive industry
Thank you