Kathy Conroy, MAI, Director/Partner of HVS’s consulting, valuation and shared ownership advisory operations in Florida and Gary Johnson, Senior Consultant for HVS in Miami, advise new entrants to reconsider the timeshare arena, thanks to emerging trend of fee-for-service and capital-light arrangements.
“Fee-for-service refers to the services such as sales and marketing, which are provided to a third party developer for a fee,” explains Conroy. “Previously, the barriers for an individual developer to enter the shared ownership industry were very high and maybe even not feasible. But today some of these barriers are no longer an obstacle to entry in the timeshare arena.”
Adds Johnson, “the large investment required to setup an effective sales and marketing organization, as well as the specialized expertise necessary to operate an effective program, are examples of barriers that previously blocked the majority of hotel owners and resort developers from entering the industry. Without an experienced and effective sales and marketing organization, the timeshare model cannot be successful. However, given the advent of the fee-for-service structure, lack of experience and expertise are no longer barriers.”
Conroy, a noted national authority on the valuation of vacation ownership properties has authored books on timeshare property assessment, and timeshare property valuation for the American Resort Developers Association and the Appraisal Institute.
According to Conroy, those who can most benefit from this capital light model and fee-for-service structure include developers of mixed use resorts which can add a timeshare component; resort condominium developers facing slow demand for whole ownership sales; and hotel owners with excess inventory which could be isolated to a certain wing of a hotel or specific buildings.
To read more about capital-light and fee-for-service models in shared ownership, click here.
Leora Halpern Lanz