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From the
May 2007 issue of:


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ARDA 2007 Convention in Orlando: Setting Records, Enriching Visions
 
by Alan N. Schlaifer
Principal
Law Offices of Alan N. Schlaifer, P.C.
 
Unlike the month of March, the time of its Annual Convention, ARDA came in – and went out – like a lion, not a lamb. And the symbolic ARDA lion’s roar, for the American Resort Development Association itself and the vacation ownership industry it represents, has grown stronger each year in many ways. While the convention itself did not have a theme – ironic in some ways in Orlando with all of its theme parks – the convention offered new and updated visions and vistas for success. Highlights of the convention and the industry’s growing strength included: • ARDA’s record level of nearly 4,000 registrants • 117,000 feet of exhibit space in the Expo, marked by many new and repeaters among the over 250 exhibitors, a one-third increase from last year • Industry annual growth again in double digits in the U.S. and globally, stretching this streak into its third decade for the fastest expanding segment of the travel industry over this span • Expansion in all vacation ownership market segments – timeshare, clubs, and fractionals, despite current weaknesses in many real estate markets. Indeed, in the spirit of “the more things change, the more they stay the same,” the current oversupply of condominium units in parts of Florida and other markets may lead to conversions to timeshares, fractionals, and condo-hotels. • A continuing increase in the quality of resort offerings as competition from quality lodging brands and independents “raises the bar” and the industry’s image in all geographic areas and market segments • A robust array of sessions to keep ARDA and the industry on track o Committee Meetings, from Suppliers (a new but vigorous group that had a panel of developers offering thoughts on best practice to aid the more than 50 suppliers in the audience), Meetings and Audit to Federal Issues, Finance and Resort Management o Forums, such as Technology, General Counsel and Resales o The Consumer-Centric Task Force o State affiliates of ARDA, such as Nevada, California, Carolinas, Rockies and Virginia • Other focused group meetings and receptions, such as the Trustee Reception, for ARDA’s highest membership category Keys to Unlocking Further Growth But there was so much more opportunity to learn, to be stimulated, and to enjoy the timeshare industry’s ongoing growth: • Keynote speaker Jason Jennings’ stimulating focus on the five key elements that have led to a “triple double” double-digit growth in revenues and profits for at least 10 consecutive years of 10 of America’s leading companies. (see highlights pg. 18) • The Opening Session, emceed by Peter Yesawich, PhD., Chairman of Yesawich, Pepperdine, in which he discussed the differences between consumer views of the industry and those of attendees of that session, on topics ranging from sales room pressure to resale, with leading industry executives. Good news from this session was that the industry can build on a more positive public perception than generally believed. • Eight “waves” of educational sessions, 51 in total, with over 200 speakers on topics that ranged from “Getting to Yes in 90 Minutes or Less” to “Smarketing: Developing an Integrated [and successful] Sales and Marketing Environment,” and from “En-tour-tainment: Redefining the OPC (off-premises contact) Presentation” to “Timing is Everything – When Will the Brands Expand Internationally?” • International and global aspects of the industry were also the subject of the annual Global Marketplace and individual panels, such as the outstanding “China: What Does It Take to Do Business with the Dragon?” chaired by Joe Hickman, Interval International’s Executive Director for Asia. • Sales & Marketing Forum, with speaker Rob Jolles, author and president, Jolles Associates, Inc., sponsored by Wyndham. He suggested an approach, which he found successful at Xerox, to being more effective at sales. It begins with research on your prospects, to establish trust and get them to like you. In this industry, have them describe their “perfect vacation.” Then use well thought out “probes” to have them discuss challenges, not problems, on their last vacation, and how they or their children felt, as well as consequences. After you get the customer to “paint the picture,” find out if they are committed to fixing the situation. If yes, “Let’s build the perfect vacation for you.” State of the Industry This began with a tribute to, and comments by “Rip” Gellein, ARDA’s immediate past chairman, a timeshare veteran who is now head of the Global Development Group at Starwood. Gellein noted salient points about the industry. First, “it offers a huge market for independents and brands. Keep improving the product and delivering what customers want to buy from us.” He believes much growth still awaits those who offer vacation ownership. Second, “The regulatory framework that some of us chafe about has created a total $62 billion in annual economic output in the U.S. Don’t forget that this framework has helped protect our business,” as it has aided consumers. Third, don’t forget, “The customer is king – and is smart. They are experienced at all stages” of the marketing and use process, “and we’ve got to be really great and continue to raise the bar.” He added, “This is about owning the fun, the family experience.” In that regard, the “highest customer satisfaction across all of the hospitality brands is their vacation ownership product.” We have to “continue to focus on making sure we deliver, from call centers to sales and marketing.” Knowledgeable Consumers Peter Yesawich’s firm released new research findings about consumers that they obtained for the AIF – the ARDA International Foundation. He discussed the consumer results, and the audience estimates of consumer views – often quite wide of the mark – with his panel. Yesawich moderated a panel of industry leaders. They included: o Jon Fredricks, president, The Welk Resort Group and incoming ARDA Chairman o James M. Lewis, president, Disney Vacation Club. o Antoine Dagot, president and CEO, Hilton Grand Vacations Company, LLC o Franz S. Hanning, president and CEO, Wyndham Vacation Ownership; and o Deborah Linden, RRP, CEO, Island One Resorts. Yesawich contrasted the results on customers surveyed who had a positive or neutral view of timeshare (60% of those surveyed) with the views of the audience. He discussed them with his panel. In some instances, as on condo-style accommodations, internal and external exchanges, or the ability to give away a timeshare, the audience had accurate estimates of consumers’ views. In viewing these results, Jim Lewis said, “America’s become much better educated on timeshare. As an industry, we have to feel good. But this begs the question, why don’t more people purchase?” Peter Yesawich responded that about one-half have negative views of the industry. Ms. Linden said she was “a little surprised at the percentages. They are much more educated” than she had thought. The panel discussion dealt with other topics, such as premiums, the reactions to the sales presentation, and knowledge of the resale market. The biggest gaps in perception between consumer responses and the audience views were in the category of why prospects did not buy. Only 11% of these consumers found the presentation “too pushy;” 65% of the audience thought that would be a factor. The single biggest factor for the lack of a purchase was that prospects said they believed they couldn’t afford the purchase – it was too expensive. Jim Lewis reacted, “What it says to us as an industry is that people are much more inclined to purchase than we believe. That bodes well for our future.” Franz Hanning added, “We must concentrate on our value proposition. We have to make sure our product fits the people we’re talking to.”



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