-by Michael J. Tolan
or more than 30 years, holiday makers have been approached by the vendors of holiday timeshare programs in nearly every vacation destination under the sun.
The early days of the business attracted Ma and Pop hotel developers who converted their little slice of paradise into timeshare apartments. However the business has now reached adulthood with titans such as Wyndham Vacation Club, Starwood, Anantara, Hyatt, Marriott and Absolute all having a significant footprint on the global stage.
Interval Leisure Group has just taken the industry by storm with its massive M&A with CEO Craig Nash mounting an even bigger move.
However, what was working yesterday is about to change.
Nothing will ever be the same again.
Disruption is at the gate, and it knows no delay, it has few boundaries and is coming, as they say in the movie business, to a theater near you.
This is not to say that the industry will be wiped out; on the contrary, disruption will only facilitate enterprise to evolve in a way which will attract more consumers, cut through old processes, eliminate others entirely, make certain jobs obsolete and create new opportunities in the new dawn of the fresh growth cycle of the industry.
Consumers will become the largest beneficiaries of this new reality.
In order to drill into this opportunity, consider the current model.
The end user customer purchases a vacation interest in a property and normally pays upfront, or with a 5-10 year finance plan, for an interest in an apartment, club or points system.
In order to redeem the annual allotment of rights, the hopeful vacation owner applies for a swap, to trade their rights to another property somewhere else, or in a different season of the year, or both. Or, they may need to request to reserve the actual rights at the same location, which may be the reason they bought in the first place.
This is typically done in one of two ways, either through the company they purchased from or an external service known as an exchange company.
There are several of these services operating today, the most renowned being RCI, followed closely by Interval International and Dial An Exchange.
These companies for the most part share a similar business model. Their service is first of all a paid annual subscription to allow access to users in order to make a booking.
Then, once their membership of the service is activated the member may begin the selection process of finding a place that suits both their desired experience — let’s say mountains or seaside — and then the time of year they wish, or in many cases, due to work or school schedules, the only time they can travel.
This has worked well enough that millions of timeshare owners around the world have opted in for the purchase of a timeshare, and then the external reservation service.
However, it is often said that you can never please everyone.
That is just the way it is.
Have you ever met a timeshare owner who said, “We have been trying to get a reservation in XYZ location since last year”, but then said, “they offered us something else which we did not really like and we could not go anywhere”?
Now, change the channel. Remember when long distance calls were enormously expensive. It was just the way it was.
Enter Skype. Viber, Whats App, Uber and others. Remember a time when the phone you used was attached to the wall with a spiral looking wire?
Could it be possible for someone to develop an App that connects timeshare owners to one another with a Facebook-like platform that features the resort locations, apartment photos, seamless booking engine, all done from their mobile phone with a next to nothing charge to the consumer?
If you think it will take years, you are dreaming in ‘La La Land,’ it’s happening right now, as in yesterday.
I attended a think tank meeting with software and application developers for a project we have been asked to enable in Dubai, and the writing is on the wall. Only this time, the wall is portable, flexible and digital. At the time of writing this opinion piece I am sure dozens if not more enterprise custodians are meeting with similar solution providers.
If you are doubtful, don’t worry. If you have been doing things the way you do them today for 20 or 30 years, and they still work well for you because you have always done them that way, relax.
Ask the warehouse supervisor at Kodak, who is now a security guard, the best price for the 100,000 tons of 35 millimeter film and expect an offer you can’t refuse, unless of course you’re now using a digital camera.
Disruption made the film stocks rather obsolete.
Disruption is breaking down existing barriers to provide new impressive, robust solutions for connectivity for so many of our everyday needs and new ones that we never even thought about or knew we needed. Think Facebook. Hmm.
The travel industry began to see disruption interrupt the old fashioned neighborhood travel agent as it was far more convenient to check offers and prices online. Today billions are counted as a new revenue stream for online providers offering airline tickets, discount room rates and other convenient services. Billions.
So the question has been answered, will people still travel? Yes, in fact a lot more than ever.
Will they still seek bargain deals for 5 star accommodation? Ask AirBnB.com and their competitors.
Disruption might differentiate accommodation from the experiences consumers really want.
A great disrupt-or of our time might be Elon Musk.
His foray from creating Pay Pal as as on-line payment gateway to Tesla Motors gaining market acceptance and shareholder value in the creation of Electric vehicles, the Hyper-loop project to deliver passengers from LA to San Fransisco faster and cheaper than ever imagined through air-pod transit, the re-usable rockets at Space X that are being fervently researched and tested to realize a new cost effective method of space travel.
Now its a Mars voyage within 10 years.
His philosophy seems to be: Challenge any system or process and find a better way. Simple advice.
Captain Kirk from the famed Star Trek Series was the commander sent to search and explore new opportunities on his mission in space. His space and the shared ownership space are linked by the same common vehicle, the ‘Enterprise.’
In the Shared Ownership enterprise space, there is much room for improvement. The consolidation and amalgamation of unused space seems one place to start.
There are others.
The marketing process, for example, which is the deployment of the costly targeting and harvesting of leads, engaging potential qualified prospects, luring them to attend sales presentations with incentives, trips, gifts etc.
That alone is an expensive part of the profitability to shareholders and must be built into the price point equation. However, it is a vital fuel which feeds the revenue division in the current model.
Analysts then factor the cost per lead, cost per show of a tour, divided into the closing percentage and volume and get a number.
Cost per sale, VPG are vital signs within the manufacturing process of creating the end product, a new member. In public companies, these numbers are expressly reported in earnings calls. These cash intensive numbers are considered an acceptable cost of doing business and are factored into the product price point.
Could they benefit from disruption?
Consider the cart and horse wagons systems of yesterday’s marketing.
Direct mail shots would generate responses to a call center with trained operators to convert these responses into visitors to sales galleries. Or consider the parts of the world today where OPC systems — now called community marketing — are rewarded to engage, qualify and send new prospects to the sales team. The challenge these front line soldiers face everyday is, “Oh, we know what this is, what is ‘your’ special gift offer?” Or “No Thanks, we already have one”, or just, “Please No.”
But what if disruptive thinking could provide smart apps, developed and deployed, that attract the tourist or prospective tourist to download a free information App, one that provides real value in information, local deals on dining, activities and could also act as a lead-harvesting mechanism. What if community marketing could transform their paper-based invitations and surveys and just go digital, seamlessly.
Would you need to be a rocket scientist like Musk to figure this out?
Some companies are successfully doing this today, others are thinking about it, while dinosaurs would require a knock on the head to move their thinking from where it is now, to the reality of… Now.
From the consumers’ point of view, think about it. That is a much more friendly and less intrusive method of engagement. Thinking about the consumer is what this is all about.
Consider a potential customer, let’s call him Bob. This year, as he is not a timeshare owner, Bob wants to look up a vacation in Florida or Thailand to check prices. He gets on the net, he browses a few well known OTA search engines and Voila, finds a deal. Bang! Booked!
He is delighted, gets the family prepared and packed and heads off to his dream holiday for a two-week stay. Once there, he is approached in restaurants, gift shops, information kiosks, hotel lobbies by the undeclared army of community marketing soldiers with a welcome smile and a convincing proposition.
Bob finally agrees to attend a presentation, and is impressed by the company story, its rich legacy and the versatility of the offerings.
He then, after being told that he must only decide on the spot that he has to either sign up or lose the great offer, considers the price offer while leaning over the white written paper feeling the familiar hint of perspiration building up around his neck and on the palms of his hands.
What would be on his mind do you think? Would Bob calculate the purchase price, the annual management or club fee, the external exchange company fees against what he just paid to Booking.com?
But what if, what if, there was a new model that disrupted the old one, one that was so different, a shiny bundled monthly subscription.
Like Apple, think different.
This could only be possible if the up-front marketing costs could firstly be disrupted.
Consider what the I-Phone 10 might carry in its arsenal, it will ipso-facto disrupt all of its predecessors, so what do you think it will feature?
Hologram calls, 100,000 volts of Stun power?
VR Interface to a resort Holi-deck experience?
Disruption means an interruption in the way things were by looking at the desired outcome and exploring new possibilities in a new and effective way, by not accepting the status-quo.
Remember, if Henry Ford had asked people what they wanted they would have said …‘faster horses’.
Those that feel innovation and disruption is just a fad should ask any taxi driver in Paris not using Uber.
Myopia. Another 3.5 Billion was pumped into Uber in June, 2016.
Disruption is the new value trend.
Change is among us today and how entrepreneurs lead this change is yet to be realized in the industry.
The next 5 to 10 years will be an interesting time for property developers, service providers and any other vendor or supplier.
If you really believe your business could benefit from a new perspective, you might want to explore these insights with your own team and challenge every process of your business model, try to pull in new members into your think tank who do not even know how or why it works now.
The truth is doing that a SWOT analysis 5 years ago might have never calculated Disruption as a Threat or identified it as an Opportunity. Perhaps today that might change as everything else around us constantly evolving. Serendipity.
Live Disruptive and Prosper.
About World Class Group
With over 25 years experience in the Shared Ownership Industry World Class Group is a sought after services provider committed to linking solutions for developer clients within its business practice.
The Company is headed by Michael J. Tolan, the Chief Inspirational Officer of WCG is today an author , board adviser and motivational speaker, who prior to this pioneered 12 country markets and opportunities for shared ownership clients.
Today WCG attracts appointments from across the globe for its bespoke customer engagement solutions, process re-engineering, on-site sales and marketing learning and development programs, Leadership and organizational development with a focus on innovation and change management.
With representative offices in Manila, Dubai, Malta, the business unit is positioned to add value to developer companies seeking an alternative improvement within their current business process and an increase in performance results in customer satisfaction, reputation management, sales and marketing and growth.
Containing a potpourri of subject matter, included in this Guest Column section are articles about sales & marketing, in depth industry-specific news, legal issues, travel articles, opinion pieces and much more. To see everything in this category, click here. If you have something you’d like to contribute, reference our Contributor Guidelines for information or email [email protected] We’d love to include you!