Hospitality companies striving to �own thy customer� have developed a wide array of marketing techniques and affinity programs designed to achieve loyal, repeat customers. In the timeshare business, ownership of the product alone achieves this goal. But with survey after survey showing that exchange is one of the top reasons timeshare owners purchase the product, timeshare developers have an added loyalty component, the vacation club, which bundles several timeshare resorts under one name and can offer owners additional travel benefits.

Successful timeshare club developers include hotel brands Hilton, Hyatt and Marriott along with independent names Bluegreen Corp., Fairfield Communities and Trendwest. While each of these companies sells its own unique product, industry experts agree the trend tends toward developing points clubs. Points have an added flexibility that allows people to buy and trade as many of the digits as they need and to take the vacation that suits their lifestyle. Because a developer stocks points instead of weeks, the sale does not depend on preferred travel seasons and �hot� travel locations.

For those investigating building a vacation club or just curious about the ins and outs--read on. Some of the timeshare industry�s top names in the legal, marketing and sales professions share their insight, answers and advice to questions and considerations about one of the timeshare industry�s top trends. 

Legal issues lay the groundwork

Susan Voss, a partner with Holland & Knight based in Washington D.C., has more than 20 years of timeshare industry experience. She says registering a club is not that different from preparing the paperwork for any project with an overall club document overlaid onto other resort site project documents. 
 

The key consideration prior to setting up a legal structure is determining what you�re going to sell and where you want to sell it. �You need to decide up front if you want to sell deeded or right-to-use interests,� says Voss. �Right-to-use lends itself to a club and it is more acceptable in business circles than it was five years ago, particularly with regard to lending institutions.� Five to ten years ago, lenders were challenged by the concept because right-to-use interests have no deed attached to the purchase and often, as the name implies, give owners access to the property for only a specified amount of time. Today lenders have a greater understanding of the industry and its

Susan Voss Holland & Knight Washington D.C

Making the deeded versus right-to-use decision up front also makes it possible to acknowledge tax considerations at the federal and state levels. Federal regulations are complex and legal counsel is advisable. Meanwhile, some states mandate that timeshares are subject to sales tax and developers should be aware of the implications before arranging to build or sell in those areas.

So that leads to the question: Where do you want to develop, market and sell? Voss says California, Colorado, Florida and Illinois are the only states that have specific regulation and disclosure with regard to clubs. Registration in other states is possible it just takes more �education� with the regulators, she says.

The offsite marketing advantage

Don�t just think about where to develop, market and sell with resort property locations in mind, also think about it from the perspective of where sales offices across the country can be located. �A club with several resorts allows developers to sell a concept instead of a single property, so one advantage club developers have is the ability to set up offsite sales operations,� says Bill Hoag, president of The Marketing Advantage, a lead generation company. �People don�t have to shake the trees and kick the rocks to test a club.�

With more than 20 years of industry experience, he adds that some people consider off-site sales centers �the answer� to the sales and marketing issues that have haunted the timeshare industry because �you bring the product to the people.� A traditional timeshare marketing and sales approach called a minivacation requires people to commit to a two- to three-day visit to the resort with a sales presentation. Offsite sales centers allow potential buyers to learn about timesharing and the club within a time commitment of just a few hours. For developers, offsite sales centers translate to lower sales and marketing costs. Hoag estimates an offsite lead averages less than $200 as compared to more than $250 for a minivacation package lead.  

Hoteliers have an inherent advantage when it comes to offsite sales. Any hotel across the country can be used as a lead generator and/or sales center. Additionally, branded hoteliers have credibility established prior to making the timeshare sales pitch.  �Credibility overcomes a lot with the consumer,� says Hoag. �When consumers get something from someone they know, people overcome a lot of their negative responses.�

Balancing the brand and the sale

Sales trainer Shari Levitin, president and CEO of the Shari Levitin Group, agrees that offsite sales offices in hotels offer the perfect venue for lead generation. She adds that timeshare and hotel operations need to work together to achieve success. 

�As a hotelier you need to balance revenue with urgency,� Levitin advises. The timeshare sales cycle is a 90-minute presentation that wraps up with a call to action to �buy today.� Levitin encourages hoteliers thinking about selling a club to ask the question, �How do you balance first-day incentives with brand names? The more stringent the sale, the more ill will it can create on the part of the potential buyer. Yet, you also could potentially lose the sale.�

Levitin, a former timeshare salesperson for Hilton, suggests finding the right type of salesperson to balance the brand with the timeshare sale. �The disposition of the timeshare sales staff is not the same as a general hotel office sales staff selling room nights or convention space,� she says. �Just because someone is experienced it doesn�t mean they are the right person for the job. Be sure you have people who are sensitive to your brand and know how to take care of the customer.�

She defines that salesperson as someone with the �courage and the ability to create rapport� because the sales cycle is shorter. Levitin emphasizes that salespeople must have strong follow-up skills and be able to contact referrals. �Yet salespeople must have a high degree of ethics because consumers often don�t know a lot about the timeshare product,� she says. 

Salespeople tend to focus on the rational instead of the emotional, Levitin argues. She emphasizes the sale should focus on the questions: why are vacations important, why timeshare, why this company and why now. Sales people have the added focus in a club sale, �Why do you want a club and why are points better than single weeks?� she questions.

Levitin adds that timesharing is a �different animal� because it�s marketed and sold differently and behaves differently. �For those reasons, the most important investment anyone can make before getting into the club business is to contact timeshare experts to make sure the job is being done right and they have their answers,� she says.

Rae Hostetler, based in Indianapolis, is the former public relations manager at RCI. Her e-mail address is [email protected].