ARDA focuses on future of vacation ownership

Hotel & Motel Management, June 7, 2004 by Elaine Yetzer Simon

Las Vegas -- A record number of attendees at the American Resort Development Assn.'s 2004 convention and expo focused on the future of the timeshare industry. The meeting's theme was "Passport to the Future"--with a nod to the past--the group's 35th birthday.

"The way we approach the business is different today than the way it was in the past, and it will change more profoundly in the days and years to come," said John Burlingame, chairman of ARDA and executive v.p. of Hyatt Vacation Ownership. "The combined efforts of all of us are more critical today than ever. We are not standing still, and neither is the environment we work in."

During the general session, Burlingame and Howard Nusbaum, ARDA's president and c.e.o., discussed the focus of the group's branches with members of its councils, committees and task forces.

"It is an exciting time to be in the business," Nusbaum said. "I feel like I have the best job in Washington."

Mitchell A. Imanaka, chairman of the State Legislative Committee and managing principal of Imanaka Kudo & Fujimoto, a law firm based in Honolulu, said regulatory uniformity heads the committee's long agenda.

"We are trying to make the laws in each jurisdiction our companies do business [in] the same or similar to enhance their ability to work across state lines," he said. "Our industry, when you know the facts, sells itself. We've communicated that to legislators, and they get it."

The ARDA Resort Owners Coalition, the federal issues committee and the political action committee also gave reports.

The keynote speaker, Fred Reichheld, discussed the importance of loyalty to the timeshare industry. Reichheld is the founder of Bain & Co.'s loyalty practice.

"Loyalty today is pretty much a joke," he said. "It is almost impossible to grow a successful company without building a loyal customer base. Loyalty transforms the dynamic of a business."

Reichheld said one question, across all companies and industries, will measure how loyal a company's customers are: How likely is it that you would recommend this company to a friend or associate?

"Running a business based on accounting leads to customer abuse," Reichheld said. "Customer loyalty plus loyal employees plus [the right] tools equals loyal customers."

During a session on inventory management, R. Scott MacGregor, chief financial officer of Curran Management Services and InnSeason Resorts, said managing room inventory in a vacation-ownership resort is a lot like election-year politics because of the special interest groups that are fighting for what's up for grabs.

"In the management of your inventory, it's very similar," he said. "You have many special interest groups you have to cater to; you have to know what their objectives are. Fortunately, in the resort environment, we can employ some good business rules and good business tools to make that process more efficient, maybe a little more civilized than the election process, and in the end, everybody can win."

Those tools include using the right technology, but MacGregor said that no matter how good the technology is, the right person still is needed to oversee and interpret the technology.

Another topic at the conference was the release of a new study, "Economic Impact of the Timeshare Industry on the U.S. Economy," which was issued by the ARDA International Foundation. The study showed that combined direct and indirect economic impacts and fiscal contributions for the industry totaled $44.4 billion of output, 476,100 full- and part-time jobs, $15.9 billion in payroll and related income, and $6.4 billion in tax revenue during 2002.

The study, which was conducted by PricewaterhouseCoopers, surveyed 3,359 timeshare owners and 54 timeshare entities.

The 2004 survey is under way.

The do-not-call telemarketing issue also merited a panel. Jason Gamel, an associate with Baker & Hostetler LLP, said confusion is making the situation worse.

"The difficulty with the interplay between the federal and state regulations is exactly whose regulations we need to comply with or whose we should follow," he said.

According to Gamel, 57 percent of U.S. adults--60 million people--have signed up to be on the do-not-call list. Of those, 92 percent report receiving fewer telemarketing calls. Twenty-five percent now receive no calls at all since signing up.

About 3,800 attended the May conference at the Mandalay Resort and Casino, along with 193 exhibitors, 73 of which were first-time exhibitors. Nusbaum said attendance the past few years had held steady at about 3,300, and that a variety of factors contributed to the jump in attendees.

"The slowing of the economy and the tragedy of 9/11 created an environment where the growth of timeshare became more evident," he said. "It's the culmination that [developers] and vendors now have it on their radar screens.

"Our theme this year is 'Passport to the Future,' so let's give a road map for becoming successful now that we are mainstream."

esimon@advanstar.com