U.S. business travel ended 2014 on a high note, with record spending. The projection for 2015 also remains strong, as lower oil prices are expected to lead to increased consumer spending, thus boosting economic projects. This strong domestic economic news comes despite an overall weak global economic outlook, with trouble in Europe, Asia and Russia according to the Global Business Travel Association (GBTA), a trade group for the corporate travel industry.
Business travel spending reached $1.1 trillion USD in 2013 that number increased by 6% in 2014 and is projected to increase by another 6.2% this year respectively. “This is especially important, given that US business travel spending is a good indicator for the direction of the U.S. economy,” the GBTA said in a recent statement.
The association expects the volume of trips globally to increase 1.7% this year to 490.4 million trips in 2015. There were an estimated 482.4 million trips in 2014, a 1.4% growth over the previous year.
The GBTA reported that growth will be led by expansion in emerging markets such as China, India, and Brazil. Advanced economies will also strongly contribute as economic growth improves and pent-up demand is released. Meanwhile, muted advances in travel supply will begin to put upward pressure on rates, particularly in high-demand travel. Also helping to drive an expected increase in travel is an improving U.S. economy and greater profits for business in 2015. The more growth and profits, of course, the more travel. Additionally, the U.S. dollar is gaining strength, while the global economy remains weak.
Some trends to look out for in 2015 include an influx of boutique hotels popping up all over the globe, increased hotel technology that makes hotel check-in seamless, and a focus on wellness travel as hotels strive to support a healthier travel lifestyle.
As the above-mentioned predictions indicate, 2015 is shaping up to be a year of prosperity, growth and economic upturn for the travel industry. With that in mind, we at Perspective Magazine asked a few shared ownership executives to share their thoughts and insight on what to expect in 2015. The following is what they had to say.
Jon Blackmon of Vacation Condos
As the economy improves, I think we’ll see leisure travel continue to increase over the next year which will certainly help all aspects of the timeshare industry. With gas prices and inflation low, people have more disposal income in their pocket and are more apt to make investments in their future vacation plans. The rebound of the stock market has also helped individuals recover much of what was lost during the contraction allowing many to feel more financially secure. The only concern is what the Federal Reserve will do with interest rates over the coming year that could limit access to low cost credit. However, any impact would likely be felt in 2016.
Rich Hartnett of Festiva Resorts
We see 2015 as a growth year based on US economic predictions. We believe that the US market will continue to grow. The effect of the decreased EURO/ CAD value against the dollar will have a negative impact on new sales but we are not impacted as a percent of our overall business but we are watching the currency valuation closely.
Mark Waltrip of Westgate Resorts
Westgate is looking forward to another banner year following 3 consecutive years of record breaking sales and profitability. The consumer demand for our product is at an all time high and the securitization markets continue to favor our industry. We are leveraging this opportunity with sound and stable growth in new markets and investing heavily in the amenities and offerings to our owners and guests at our existing properties. While no one can foresee the future, one thing is certain – we will use the lessons of the past recession to make sure we continue to conduct our business as efficiently as possible and not over leverage ourselves for the sake of growth.
John Farrow of Farrow Commercial Construction
For 2015 Farrow Commercial Construction has seen a tremendous increase in construction both on the renovation/remodel side and also on the new construction/build side. We are bidding on average 3-5 new projects per week. These are a combination between renovation work and new construction projects. The forecast looks very bright for 2015 and beyond. With a slower ramp up after the downturn, Farrow is seeing a slower but steady increase in construction and new building permits being issued. We expect this trend to continue for the next several years. Additionally, the lending industry is finally starting to loosen their purse strings for construction related financing which allows builders and developers to start looking at getting new projects out of the ground.
Nico March Of March Group Of Wells Fargo Advisors
We still face challenges on the economic front and it’s always good to be aware of potential speed bumps. However in the U.S., the stock market is going up, and consumer confidence and spending are on the upswing. Barring unforeseen circumstances, the outlook is positive, as the U.S. heads toward a period of economic growth and prosperity.
Gordon Gurnik, President of RCI
2015 and beyond will present our industry with great opportunity. The ability for timeshare companies to capitalize on it will depend greatly on how well they adapt their business to reflect today’s prevailing travel trends. I expect to see resorts continue to find creative ways to infuse flexibility and choice into the product as current travelers demand more unique, customizable and authentic experiences. Companies will also continue to evolve their offerings to better appeal to the next generation of travelers by taking more of the business cycle into the digital space, especially the sales process. Finally, we should see more international companies look to develop in thriving markets like Brazil, India and the Philippines which are benefiting from a burgeoning middle class.
Curtis Knipe of El Cid Vacations Club
Demand will continue to grow in 2015 as the global economic situation improves. With oil prices still declining, transportation costs will be lower, and purchasing power will be greater. Americans should be encouraged to travel at home, and abroad, with the stronger dollar. And emerging markets in South America, particularly Brazil, are expected to increase their travel despite the appreciation of the US Dollar. Regardless of what happens, the reality is there will be change. And although we may be able to predict certain key indicators, there will be changes we did not see coming or expect. So prepare your mind. Expect the unexpected. Your willingness to adapt and flow with the changes will ultimately determine your ability to grow.
Ken Miller President of Global Marketing Group, Ltd.
Resort developers can be more relevant and profitable than ever. One area of growth will come by expanding guest wellness services plus other ‘fun’ benefits when guest return home. Staying in contact and offering a continuing service of fun and wellness will build loyalty, referrals, and profit. A caveat to continued growth is the spiraling cost to obtain good inventory by buying an existing property or purchasing land and building. Obviously this will cause developers to increase prices and services. One solution can be to work with property owners and consider Joint Ventures or revenue sharing.
Global expansion will come in emerging areas free from political chaos. Cuba will return as a tourist giant lead not by the ‘good old gambling days’ but by culture, beauty, friendly people and nature.
Harry Taylor, Executive Chairman and CEO of TATOC
Looking forward to the remainder of 2015 from a consumer aspect. With the increasing availability of short time contracts and fractional opportunities there is a growing feeling of optimism both from existing and new entrants to the timeshare experience. The review of the European Timeshare Regulations is to be published later this year and will take into account perpetuity, exit policy, plus other areas such as the resale market etc. It is important that the individual timeshare owner is fully protected but, careful consideration must be given to the club structure to ensure the future of the majority of satisfied timeshare owners. Developers, Timeshare Owners Committees, and HOAs must all look carefully at their constitutions and find a way forward that suits their members, before being faced with compulsory legislation.
Rob Webb, Partner at Baker Hostetler
2015 has the potential to be a year of significant growth for the global shared ownership industry, but economic signals continue to be mixed, currently more positive in the U.S. and less positive in Europe and Asia. I expect that this continuing economic uncertainly will encourage participants in all aspects of our industry to pour more of their resources into online marketing and delivery of their leisure products and services. I also expect the lines between regulated and unregulated leisure products to continue to blur, with attendant heightened marketplace confusion between products that protect consumers’ vacation expectations and products that burden consumers with a high risk of disappointment. The Golden Years of shared ownership are still ahead of us, if we can increase secondary market liquidity and reduce secondary market fraud.
Jude Carrillo, Consultant at Core Business Consulting Inc
“The art of prediction gets very tricky when it deals with the future.” With that as the supporting premise, in 2015 I see continued consolidation in the timeshare industry and more ongoing focus on first generation tour marketing initiatives. As well, there will be more innovation regarding product, shorter term with a natural exit. In all likelihood the more successful innovations will come from the hotel/timeshare organizations already participating in the industry. Although a choppy ride, the year should end with positive growth.
Joy Powers, Director of Business Development at Concord Servicing
We are very optimistic about global growth in the vacation ownership sector, particularly in Mexico, a market that has been very significant to Concord since the company was founded in 1988. Tourism forecasts for 2015 continue the positive trends set in motion a few years ago. The WTO predicted a 3 to 4% growth in international tourism, with America capturing a sizable portion of the travelers. Mexico received 19% more international visitors in 2014 than in the prior year, according to Sectur, and January 2015 arrivals reinforced the upward trend with an increase of 14% compared to January 2014. We project an increase in the purchase of vacation properties and club memberships in Mexico, fueled importantly by the economic recovery in the United States.
Mike Hoesten , Account Supervisor at Brand Tango
2015 is the year of mobile domination. Native (iOS, Android) applications and HTML5 responsive websites are enhancing the way brands engage and service customers, while at the same time cutting down operational costs. This year, we will see virtually every facet of the vacation ownership experience facilitated by mobile devices. Members and owners will be booking tours, making travel arrangements, paying maintenance fees, checking in on-site, scheduling dinner reservations, finding their way around properties and ordering drinks at the pool all from a device that fits in their pockets or on their wrists. And guess what? This will become the baseline for what customers expect in the blink of an eye.
Shawnah Sheehy, CSO of IMPACT International Marketing
Technology has changed the way organizations operate. The days of waiting weeks or months to make decisions based on results are now available in real-time allowing for adjustments that save valuable resources. In 2015, I predict organization’s that embrace innovation will need two essential business tools to stay relevant.
1. Data Mining through Predictive Modeling. It analyzes the consumer data collected. A unique algorithm is created based on the output which creates the model. The Model will
score and index the lead in real-time. The organization will be able to predict the propensity a consumer will convert to a purchase.
2. Marketing Automation brings together all of the moving parts into one central dashboard. With the number of worldwide tourists increasing exponentially each year the future of timeshare also looks brighter more than ever. However, don’t be fooled into believing that means everyone is going to be a winner. Let’s look at it in the context of over a short period of just the next one year. The companies that are likely to succeed are the ones who pull up their socks over a few issues listed here.
Ashraf El Zarqa, COO of Emirates Vacation Club.
Firstly companies should increase the flexibility of timeshare products. In a global survey, concerned with flexibility problem was the most frequently checked important reason for not considering the purchase of timeshare. Second, timeshare firms need to work towards building a positive image. Negative reputation toward timeshare was ranked second on the list of deterring factors for not purchasing timeshares. Third, timeshare companies should offer better investment choices. One-third of respondents in the survey reported risky investment as an important factor when considering not buying a timeshare. Therefore, timeshare products with potential rental income will be more attractive than those with simply vacation functions.
Fourth, companies may want to target markets of single and younger people. The same survey results suggest that resort timeshares are attractive to singles, and those aged less than 34 years old. Therefore, companies may have to adjust to targeting different market segments as against the traditional target audience which is the married and older group. For us here at Emirates Vacation Club we are doing our best to cover all the above challenges and we believe that 2015 will be better than 2014 in regards to the sales volume and the customer experience.
Bob Kobek, President of Customer Account
2015 has already demonstrated signs of steady growth and continues to demonstrate that growth. As an online customer feedback management system we rely on our technology to satisfy our client’s needs. We continue to invest in our technology based on our client’s requests and our particular knowledge of trends in the timeshare industry. Trends such as ensuring we meet the growing need to be “mobile friendly” to continue our commitment to make access to our surveys convenient and sustainable. The day we stop investing in technology is the day we become archaic and lose our edge.
Barry Robinson, President and Managing Director Wyndham Vacation Resorts Asia Pacific
In the next few years we will see rapid growth of the vacation ownership industry across Asia. In other parts of the world we will need to understand the various cultural differences that exist throughout Asia, which is becoming one of the largest global tourist markets. The service expectation from Asian travellers is also far more demanding than what we experience in most western countries. Tomorrow’s owners will seek more flexibility and tailored experiences. This will most likely include shorter-term ownership as well as pay-as-you-go maintenance fee options. The next generation of travellers seek new and unique experiences. Vacation ownership holiday offerings will be diverse and far more service oriented as companies gather more information about the preferences of their members.
Gregory Crist, CEO of the National Timeshare Owners Association
We’ve been able to collect over a half a million pieces of data in the United States through our Timeshare Ownership Study with Intuition and this has allowed us to see very important consumer trends that are forming like never before. Both existing and prospective owners are clearly indicating that they want new and flexible short term vacation products, as opposed to what is currently being offered in the traditional space. The future success of the timeshare industry will no doubt come from leaders who are committed to evolving the product.