Time shares are here to stay
April 28, 2005
It stands to reason that Lake Tahoe-area time-share attitudes and product offerings have come a long way in the last few decades. Tahoe is the home of the first deeded time-share program in the United States in 1973 at Brockway Springs on the North Shore.
A Sausalito developer, Innisfree Companies, put together a team with Hyatt Corporation as a joint venture, coining the word to make it easier for bankers to understand, according to Timeshare Beat magazine.
“Twenty years ago, time-share marketing was all about awareness. Now it’s about product offerings and location,” Marriott Vacation Club’s sales project director Scott Oldakowski said, looking over the development model where his company plans to enter its second phase next month.
Marriott expects to finish building the 56 units in August 2006 to add to the 145 in the 5,000-owner Timber Lodge and stagger the start of its development on Phase 3 about that time. South Lake Tahoe will allow Marriott to build out to 261 units in the traditional time share – which sells in weekly intervals averaging between $13,000 and $34,000, depending on size and season. Marriott touts an owner occupancy rate in the low 90 percent range. Grand Residence Club’s stands at the mid-60 percent range.
“What I think is going to make (Phase 2) hot is they’ll be three-bedroom units,” he said. The company has developed 1-and 2-bedroom units for their two time-share complexes located at the Heavenly Village near Stateline.
A stone’s throw away, Grand Residence Club owners rent out their units in droves, buying at least a quarter share over 12 weeks. They can spend anywhere from $31,000 to $500,000.
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Owners pay property tax, while their renters pay transient occupancy tax if the units are used as motel rooms. Timeshares generate a rough estimate of $497,000 a year to the city’s coffers, the El Dorado County Assessor’s Office reported Wednesday.
The latest in vacation trends
Oldakowski and others say fractional ownership has made vacation-home ownership a blossoming industry. In the end, those with a zeal for travel have something to show for their piece of the vacation pie, instead of “$80,000 of hotel receipts in a shoebox,” he said. And many cite other advantages to time share versus hotel occupation.
“You don’t always know what you’re getting with a hotel,” he said.
A $20 billion company, Marriott International has $1.5 billion of its business in time shares – marking a trend in which giant hoteliers have allocated a hefty portion of resources to the industry.
Jim Foff of the Fantasy Inn agrees timeshares have an advantage over hotels in the long-term discount if the owners use them. To compete for visitors who want to stay more than a week, Foff will discount the room rate.
“They’ve had a really big impact on the travel industry. But in Tahoe, I think they’ve overbuilt. There are so many now,” he said.
Frances Desimone, manager of the Pine Cone Acre on Emerald Bay Road, said the hotel has seen little effect from time shares taking away business. She pointed to a 45-day booking she got that morning.
A personal investment
Even with the advantage of owning, Dan Spano of Paradise Timeshare Resale and Real Estate admitted there’s little investment value in time shares. His company lists them for sellers, sometimes at half the rate.
“The bottom line is, 95 percent of the time-share purchased in the world, the day you walk off the development floor, lose half their worth,” he said.
Spano, a 20-year veteran, believes the industry has improved but there’s still a “bad image” to overcome. Resale listing fees alone range from $300-$500. His company sells on commission.
South Lake Tahoe Chamber of Commerce Executive Director Duane Wallace said the time-share industry has changed a lot in Tahoe since the days sales people would “chase people down the street.”
The industry in Tahoe doesn’t appear concerned about cannibalizing itself.
And like Spano, Jan McCarthy, who runs the Stardust and Americana Vacation Club, contends there’s plenty of business to go around because there are so many offerings and ways to sell in a timeshare network run by development, exchange, management and resale companies. Some people even go online and use eBay to sell their units.
“As hotels are struggling, timeshare people are struggling to get in,” she said. “They hear where the snow is and book the mountains.”
Then, time share operators cite the spillover benefit of visitors staying longer as well as eating, drinking and shopping their way through town.
“This town would be dead without the time shares,” she said.
Like Marriott, Embassy Vacation Resort and Trendwest at Round Hill – which sells points to its owner prospects, Stardust owners buy into a club membership that sends them to exotic locations like Hawaii and Aruba.
The Stardust sold time-share units 19 years ago and Americana 25 years ago, making them two of the oldest South Shore properties. Without lavish offerings, the Stardust instead caters to those looking for little pluses that add up. Her property brings out the free wine, beer and cheese and puts on a barbecue once a week.
Time share facts
— What is a time share?
A time share at its core is essentially a group of people sharing the cost of a vacation home. They come in a variety of vacation products and plans – traditional deeded, fractional ownership, private residence clubs and points clubs. The time-share concept was invented in France and Switzerland.
Source: Timeshare Beat travel magazine
— South Shore-area time shares: Americana Vacation Club, Beachcomber, Embassy Vacation Resort, Heavenly Village Townhouses, Marriott Grand Residence Club & Timber Lodge, Stardust, Ridge Tahoe, Tahoe Seasons, Trendwest