Surprise… Timeshares Lead in Customer Satisfaction!

Categories:  Customer Satisfaction
Date: July 29 2008
Author: Jonathan Barsky, Lenny Nash

Many vacation goers rarely want to visit the same place twice.  Timeshares (a.k.a. “vacation ownership”) offer the opportunity to "buy the hotel" and explore different locations through exchange agreements.  This innovative concept has flourished and continues to expand.  Sales were up 6 percent in 2007 and have jumped 66 percent since 2003.  Average occupancy was over 80 percent in 2007 (including owners, exchange guests and renters).  This "slice" of the industry foreshadows perennial profits, with an optimistic economic forecast. 

As a result of their popularity timeshares have proven to be remarkably lucrative for many resort developers and prominent hoteliers.  This form of lodging has spawned a variety of products sold on similar occupancy schemes including condo-hotel units and luxury fractional properties. 

This industry is clearly doing a lot of things right, including satisfying their customers.  Since Market Metrix began tracking the industry in 2004, timeshare accommodations have received rave reviews from guests.   In 2007 timeshares outperformed all other industry segments in overall customer satisfaction.  This is significant considering the high-priced brands competing in the luxury segment (e.g., The Ritz-Carlton and Four Seasons).  

Market Metrix Hospitality Index 2007

Why are timeshares more pleasing to guests? 

Timeshare companies, discovering the lucrative opportunities, have invested significant resources to protect and grow their customer base.  Also, due in part to an industry known for its aggressive sales tactics, customer expectations tend to be lower for this segment.  More professional marketing and new properties with plush amenities have pleasantly surprised many customers (“We had a wonderful experience and the accommodation and amenities were much more than expected” – Hilton Grand Vacation guest).  

Market Metrix recently analyzed where timeshares are outperforming the industry and which brands are leading the charge. 

In 2007, timeshare customers report feeling more excited, inspired and entertained from their experiences than other hotel guests (“it was a magical time for me…  everything was perfect” -- Disney Vacation Club).  Cleanliness of guest rooms and bathrooms were also rated higher than other hotel segments (“I am very pleased every time we stay with our Timeshare Resort.. the rooms are ALWAYS clean!” -- Fairfield Resorts).

Despite overall high customer satisfaction, there are vulnerabilities in this segment.  The rate of problems reported by timeshare guests is among the highest in the industry (14%), much higher than luxury hotels (9%).  Customers often report “we had a few minor problems, but nothing that would prevent me from staying there again” (Starwood Vacation Ownership).  This is an unsustainable situation during the honeymoon phase of timeshare adoption.  Customers will demand more.

Timeshares also appear vulnerable in customer service (e.g., Employee's Can-Do Attitude, Friendliness of Front Desk Staff, Telephones answered quickly).  Although among these important customer experience dimensions, timeshare brands exceeded industry averages.

Leading timeshare brands

RCI is the world's leading timeshare exchange broker, with more than 3 million member timeshare owners.  But other brands outperform RCI in customer satisfaction and are taking a bigger bite out of the rapidly growing vacation ownership market.  For 2007, Disney Vacation Club and Trendwest Resorts hold a significant lead in customer satisfaction over RCI and other leading brands. These two leading brands also showed the biggest improvements in customer satisfaction (up 1.0 and 0.9 respectively) while Fairfield Resorts and Starwood Vacation Ownership posted the biggest declines (-2.3 and -2.4 respectively).

Market Metrix Hospitality Index 2007

Customer Satisfaction with Timeshare Brands

Why are customer satisfaction and “loyalty” important post-sale?

Successful timeshare companies understand that positive word-of-mouth referrals are a powerful sales tool and the lynchpin to achieving aggressive expansion plans.   If a guest isn’t satisfied the biggest costs are due to loss of future business and negative word-of-mouth communication.   In addition, with a growing number of one-time renters occupying the units, a positive experience not only encourages them to return, but is crucial to getting them to purchase the property.

In the current economic downturn, while many hospitality companies are making cuts without understanding the impact on the guest, many timeshare companies are analyzing their guest experience.  As a result, these companies are able to make decisions that will have the greatest impact on guest loyalty.  According to Howard Nusbaum, American Resort Development Association (ARDA) President and CEO, “The continued growth of the timeshare industry in today’s economy is a direct indication of strong consumer satisfaction…  Vacation ownership, with its flexibility and spacious accommodations, continues to be a preferred travel choice for American families.”

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Jonathan Barsky and Lenny Nash are principles with Market Metrix LLC (MarketMetrix.com), a firm that provides multi-channel survey, analysis and service improvement tools and benchmarking data for the hospitality industry.  For more information, call (800) 239-7515.