Wish You Were There; The Good Times Roll for Time-Share Titans
Wish You Were There The Good Times Roll for Time-Share Titans Edited by ROBIN GOLDWYN BLUMENTHAL Monday, June 6, 2005 WITH SUMMER JUST TWO WEEKS AWAY, thoughts turn to vacation hot spots. Increasingly, that means timeshares, or the right to own and use a "unit of accommodation" for a specified amount of time each year. Collectively, three million U.S. households now own 4.9 million weeks at 1,600 time-share resorts around the country, reports Bear Stearns lodging analyst Joseph Greff. And the numbers are growing. Greff estimates sales of U.S. time shares could reach $42 billion in 10 years, from approximately $7.5 billion in 2004. Behind this growth are demographics -- time shares are popular with people in the 40-to-55-year-old bracket -- greater knowledge of the product and improvements in the quality of accommodations. David Hehman, president of EscapeHomes.com , says sales of high-end "fractionals" and residence clubs grew 100% last year, to more than $1 billion, reflecting greater interest in properties with large units, lush amenities and lots of service. The boom in time shares has been a boon to Starwood Hotels & Resorts Worldwide (ticker: HOT), Marriott International (MAR) and Hilton Hotels (HLT), which now account for 75% of the market. Five years ago, 60% to 70% of time-share operators were independents, notes a Starwood spokesman. An early entrant, Marriott has been in the timeshare business since 1984 and today derives almost 25% of its operating income from time shares, Greff writes. Starwood and Hilton entered the market in the 1990s; time shares now account for 19% of Starwood's operating income, and 12% of Hilton's. The most popular time-share locations for the Big Three? Orlando, Fla., Las Vegas and Hawaii.