New Research Highlights the Resiliency and Adaptability of the Vacation Ownership Industry

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The timeshare industry has evolved significantly to meet the changing demands of modern travelers who prioritize value, versatility, and exclusivity in their travel experiences. Overall, timeshare resorts reported an impressive average occupancy rate of 77 percent in 2023, significantly higher than the 63-percent average occupancy rate for hotels in the U.S. This higher rate underscores the appeal of timeshare — also known as vacation ownership — among travelers looking for reliable, high-quality vacation experiences year after year.

This data appears in the 2024 State of the Vacation Timeshare Industry report from ARDA, the trade association for the vacation ownership industry. The association’s research arm, ARDA Research & Insights, plays a crucial role in conducting and disseminating research that supports the industry, providing comprehensive data and analysis on various aspects of vacation ownership, including market trends, consumer preferences, and industry performance metrics. 

Another recently published report, 2024 Economic and Fiscal Impacts of the U.S. Timeshare Industry, highlights several key metrics demonstrating the timeshare industry’s significant contributions to the U.S. economy. By compiling and publishing reports, ARDA equips industry stakeholders with valuable insights that inform strategic decisions, policy-making, and best practices. 

To delve deeper into this new research and explore the latest timeshare trends, SkiftX interviewed Joseph Callender and Caroline Sallee, managing directors at Ernst & Young, the firm commissioned by ARDA to produce the reports.

The State of the Industry in 2024 

According to Callender, who has contributed to ARDA’s annual State of the Vacation Ownership Industry report for two decades, the industry has made significant strides since returning to pre-pandemic levels in 2023.

“The latest data reflects significant milestones and positive trends,” Callender said. “The headline figure is the sales volume. In 2023, we saw a sales volume of $11 billion, representing a slight increase from the previous year and, more importantly, a full recovery from pre-pandemic levels. This recovery is noteworthy given the sharp decline experienced during the pandemic when sales dropped to $5 billion in 2020.”

Another significant highlight from the report is rental revenue, which reached a record $3 billion in 2023. Rentals play a critical role in maintaining high occupancy rates, diversifying income, maximizing asset utilization, and attracting new buyers. In addition, by renting out unused units, resorts ensure their properties remain active and well-maintained. 

“For the first time, rental revenue has surpassed pre-pandemic levels, marking a 12 percent increase from the prior year,” Callender noted. “This surge in rental revenue accounted for 16 percentage points of the overall occupancy rate, highlighting a growing consumer preference for flexible vacation options.” 

As flexibility becomes a priority, traditional weekly intervals are being complemented, and in some cases replaced, by points-based products. This flexibility allows owners to tailor their vacations to their specific needs, whether traveling to different locations each year or adjusting the size of their accommodations based on the number of travelers. 

“The industry has modernized significantly over the past 20 years,” Callender said. “We’ve seen a lot more emphasis on points-based products and other flexible vacation options, which cater to the diverse needs of today’s travelers.”

The Economic Impact of the U.S. Timeshare Industry

While the State of the Industry report analyzes current trends and market conditions within the timeshare industry, ARDA’s 2024 Economic and Fiscal Impacts of the U.S. Timeshare Industry report quantifies the industry’s financial contributions to the broader economy, detailing aspects such as job creation, tax revenue, and overall economic influence.

“The report captures the economic contributions from various segments of the industry, including resort operations, sales and marketing activities, corporate operations, new construction, and vacationer expenditures,” Sallee said. 

The report reveals that in 2023, the timeshare industry supported 423,713 jobs and contributed $29 billion in labor income, $86 billion in economic output, and $11 billion in taxes. These figures include the direct impacts of the industry’s activities and the ripple effects throughout the economy due to increased supplier and consumer spending.

“When we quantify economic impact, we look at three types of impacts: direct, indirect, and induced,” she explained. “Direct impacts are generated through spending by the timeshare industry and its employees, while indirect impacts come from increased supplier activity. Induced impacts result from higher spending by employees due to increased incomes.”

This year, the report highlighted a decline in supplier-related jobs, likely due to increased efficiency and automation within the industry. For example, fewer employees are needed for daily housekeeping and laundry services, reflecting a broader trend toward operating with fewer people.

“The positive takeaway is that the industry has rebounded in revenue, visitor expenditures, and capital investments,” Sallee said. “We’ve seen an almost 30 percent increase in capital investments compared to two years ago. Another key takeaway from the report is that the industry supports a significant amount of tax revenue, about $11 billion, split between federal, state, and local taxes. This is a crucial contribution, particularly for local governments.”

Outlook for Timeshare in 2024 and Beyond

The timeshare industry is poised for continued growth and resilience, with robust sales and high occupancy levels expected to continue. 

“Recent trends suggest a positive outlook for the industry,” Callender said. “Sales continue to be strong, and occupancy rates remain high. Although the industry faces challenges such as inflation impacting maintenance fees, historical trends suggest these are manageable.”

Sallee agrees with this optimistic outlook: “While the operational landscape has changed, the industry’s ability to adapt and thrive is evident in these positive trends.”

For an in-depth look at timeshare owner preferences, check out the 2024 edition of the U.S. Shared Vacation Ownership Owners Report, launching in August on ARDA’s Research & Insights landing page. 

This content was created collaboratively by ARDA and Skift’s branded content studio, SkiftX.