Marketing top-of-mind issue at conference

Hotel & Motel Management, Jan 10, 2005 by Elaine Yetzer Simon

The timeshare industry's recent performance along with various marketing strategies and their effect on the timeshare industry were hot topics at the Timeshare & Resort Investment Conference, which was held at the Royal Pacific Resort at Universal Orlando.

Howard Nusbaum, president and c.o.o. of the American Resort Development Assn., said timeshare is in a sweet spot.

"We've always had a history of being recession resilient," he said. "We were born during a recession. The tragedy of 9/11 and what it did to the greater hotel industry put a big spotlight on timeshare that allowed a lot of people to look at this really interesting product that was growing even in tough times.

"We have 5 percent market penetration and if you look at our customer, it is the archetypal baby boomer. The largest piece of the population is getting ripe and ready.

That growth is expected to continue.

"The industry has been very resilient through the decades in terms of economic and geopolitical downturns," said Craig Nash, chairman and c.e.o. of Interval International. "We expect that that will continue because it's a product that people enjoy. It's a product that will continue to be developed and sold into the future."

Marketing was a popular topic at the annual conference, from handling do-not-call legislation and diversity marketing to the Internet's effect on the industry.

"The Internet is the ultimate medium," said Michael Kosmas, head of Kosmas Group International, a consulting company. "That's where you are going to find your customers and how you are going to keep in touch with them. It's a long-term commitment. Invest in it now."

A big reason for the growing prominence of the Internet in the timeshare industry is the passage of federal do-not-call legislation, which prohibits companies from calling numbers registered with the government for telemarketing purposes, except for a few exceptions.

"We've moved from direct marketing to an opt-in format on the Internet," Kosmas said. "We took some risks, found 1,000 ways not to reinvent the light bulb. We ultimately are getting permission to contact people or sending the details of the programs and giving them a chance to opt out before we ever contact them."

Stephen Weisz, president of Marriott Vacation Club International, said his company foresaw the effects of do-not-call more than five years ago when states were starting to enact legislation.

"We came to the reality that the open market, telemarketing approach was destined for at least becoming a very diminished part of what a marketing mix could look like," he said. "We quickly began to try to turn to a raise-your-hand kind of marketing approach where people could indicate an interest in talking to us versus us trying to call them in the middle of their dinner. We've invested a lot in technology, and we do a lot with partners. "

Weisz said MVCI has been focusing on current owners to increase its timeshare business.

"About 50 percent of our sales has been either from owners reloading and buying an additional week or owners that are referring their friends, relatives and neighbors to us to buy, which we like because its an endorsement of our product and it's a relatively low-cost sale," he said. "More than 60 million people have signed up for DNC, and if you're going to rely on trying to get to them via the telephone, I suspect that you're probably going to be meeting with very diminishing returns."

Peter Yesawich, chairman and c.e.o. of Yesawich, Pepperdine, Brown & Russell, anticipates that personalized marketing will be the next big issue to have an impact on the timeshare industry.

"Consumers tell us they want to create their own options," he said. "The future of travel selling can be summarized in one word: personalization. It's all about what I want to do today and the ability to package the kind of experiences that are unique to me."

The Internet has made the desire for personalization become reality, he said.

"The travel business generally has grown up as a one-size-fits-all business," he said. "That's no longer necessary today because we now have access to the tools that permit us to personalize offers and products and experiences for people. That resonates very well with them."

Diversity marketing also is growing in importance, speakers stressed.

According to Yesawich, the percent of the adult population in the United States classified as white will decrease from 69 percent now to 50 percent by 2050. The Hispanic and Asian populations, the two fastest-growing demographics, will double by then, Yesawich said.

"If you are in the timesharing business today, you must be a multicultural marketer," he said. Ty Christian, YPB&R/Christian president and managing partner, said the industry must be more inclusive to attract owners.

"The emerging market has emerged," he said. "People like to read publications that speak to them in their style and their language. Based on how the world is changing, you have to realize that people don't see things through the same lens."