A (Very) Brief History of the Timeshare Industry
Depending on how rigid your definition of the word is, modern timesharing was invented in either Switzerland or France.
Hapimag, headquartered in Baar, Switzerland, arose from Alexander Nette’s desire for rent-free holidays every year. He and his partner Dr. Guido Renggli established a company named “Hotel- und Appartementhaus Immobilien Anlage AG” on September 23, 1963 and began to acquire resort properties, which were sold in a “right to use” share program as opposed to deeded real estate. Hapimag lays claim to the very first points program and the first timeshare rescission clause, ever. Hapimag is still a successful company today, and interestingly never has formally affiliated with the major exchange companies.
Meanwhile sometime in 1964, ’65, ’67 or ’68, depending on which industry history you read, Paul Doumier of the Société des Grands Travaux de Marseille development company in France created a timeshare concept for his firm’s SuperDevoluy ski resort in the French Alps. Doumier coined a catchy advertising slogan that advised people it was cheaper to buy the hotel than to rent the room, and it caught on. It is interesting to note that as important to the industry as this innovation was, the year of its introduction is in dispute.
The first hotel-condominium timeshare in America, known as the Hilton Hale Kaanapali was located on the island of Maui, Hawaii within the 15,000 acre Pioneer Mill Plantation owned by Amfac. It was the creation of six people: Conrad Hilton, Fritz Burns, Greg Dillon, Ed Hasting, Erik Jacobsen, and Robert “Bob” Svoboda. Ground was broken for this product, the first timeshare in the USA, on October 25, 1965.
The first non-hotel condo timeshare sold in the United States was the Kaua`i Kailani on the island of Kaua`i in Hawaii. Bob Burns and Bob Ringenburg (informally called “the two Bobs”) sold leasehold condos there in weekly intervals (with a forty-year lease), beginning in May of 1969. They went on to form Vacation Internationale, and also created the original “points” system to make the product more flexible for their owners.
The first deeded timeshare program in the U.S. was offered in 1973 at Brockway Springs in Lake Tahoe, California. The developer was Innisfree Companies of Sausalito, California (a 50/50 joint venture with Hyatt Corporation) and the team who put it together was Carl Berry, Paul Gray, Greg Bright, Doug Murdock and Dave Irmer.
It was that group of men who pioneered the word “timeshare” to describe the product in order to make it understandable to bankers, who were already familiar with the term as used in the sharing of mainframe computers. They got financing through Avco Financial and when they filed with the California Department of Real Estate they labeled their product ‘timeshare’ and then used the word ‘timesharing’ in their marketing materials.
Keith Trowbridge developed the first successful purpose-built interval ownership resort in the United States in 1974, Florida’s Sanibel Beach Club, a 31-unit condominium project built and completely sold out in 18 months. He founded Captran Resorts International, Ltd. At its peak in the late 1970s, that company posted annual timeshare sales of $50 million.
The timeshare concept caught on quickly in the USA, especially in Florida where a small number of real estate developers, who were having difficulties selling their full ownership condominium properties in a down economy, began to pursue the new model of interval sales. As a result of their efforts (and successes), the world of vacationing would never be the same.
THE RISE OF EXCHANGE COMPANIES:
Christel and Jon DeHaan invented the first exchange company, Resort Condominiums International (RCI), in 1974. They correctly figured that if timeshare owners were able to trade their week for a week somewhere else, it would increase the perceived value of the product and more people would buy. This relationship among RCI/developers/timeshare owners proved to be symbiotic, wherein each entity profited by the existence of the other two.
When the DeHaans divorced in 1989, Christel bought out Jon’s half of RCI. In 1996 she sold the company for half a billion dollars to Hospitality Franchise Systems, Inc., which merged in December of 1997 with CUC International, Inc. The company created by that merger, Cendant Corporation, then took ownership of RCI.
In 2005 Cendant decided to split itself into four separate companies. Its hospitality division was renamed Wyndham Worldwide in 2006 and comprises the new company’s hotel, resort and timeshare businesses. The formerly named Cendant Timeshare Resort Group, which includes RCI as well as the timeshare companies Fairfield Resorts and Trendwest Resorts, was renamed Wyndham Vacation Ownership, Inc.
Interval International (II) was formed in 1976 by Miami attorney Thomas J. Davis, Jr. and former accountant Mario Rodriguez specifically to compete in the timeshare exchange marketplace. They marketed the company as a more upscale alternative to RCI.
Davis left Interval International in 1982. Leaguestar plc, a London-based holding company supported by European institutional investors, purchased Rodriguez’s interest in 1988. In 1992, II became a wholly-owned subsidiary of CUC. When CUC and HFS merged in 1996, forming Cendant Corporation, anti-trust concerns were raised because both of the major exchange companies resided under the same corporate umbrella. To mitigate those concerns, Interval International was sold in December of 1997 to an investment group formed and controlled by Chicago-based investment partnership Willis Stein & Partners, L.P., a group of II’s senior executives and a consortium of hospitality firms consisting of Carlson Companies, Inc. Hyatt Vacation Ownership, Inc. and Marriott Ownership Resorts, Inc.
In 2002 the company was purchased by USA Interactive, now renamed InterActiveCorp (IAC), owned by Barry Diller. Carlson, Hyatt and Marriott no longer had an ownership interest in the company, but they continued to affiliate their resorts with II.
Mario Rodgriguez, who was known as the industry’s goodwill ambassador throughout his life, passed away on March 25, 2003.
In 2008 IAC spun off Interval International, which became a publicly traded company named Interval Leisure Group. Besides Interval International, ILG’s other business segment comprises Aston Hotels & Resorts and Maui Condo and Home, which provide hotel and resort management and vacation rental services to vacationers and property owners primarily in the Hawaiian Islands, as well as Preferred Residences(TM), a hospitality branded membership and exchange program for luxury fractional resorts, private residence clubs, and condominium-style hotels.
To quote from the article “Giants of Our Industry”:
Today there are many more challenges timeshare developers are confronted with than in yesteryear. Yet as was true decades ago it will likely not be the executives comfortably sitting at their plush corporate ‘Brand’ offices who’ll get all creative and blaze a new trail leading the charge and our industry well into a bright future.
No, instead, that future will come from the likes of (in no particular order or rank, etc.) Alexander Nette & Dr. Guido Renngli (Hapimag); Bob Burns & Bob Rengenburg (Vacation Internationale); Carl Berry, Paul Gray, Greg Bright, Doug Murdock and Dave Irmer (Innisfree Companies); Roy I. Fraser (VRI); David Siegel (Westgate Resorts); Daniel Chavez (Mayan Resorts); Deb Linden (Island One); Artie Spector and Michael Kaplan (Consolidated Resorts); Sheldon Ginsburg & Perry Snyderman (Shell Vacations); Sheldon Cloobeck (The Jockey Club, et al); Bill Peare (Trendwest Resorts); Raymond ‘Rip’ Gellein & Jeffrey Adler (Vistana Resorts); Keith Trowbridge (Captran Resorts International); Steven Kosmas (The Kosmas Group); Wayne Kinser (Peppertree Resorts); the late James Lambert (Berkley Group) and other ‘giants’ of the era.
It was these giants and their management, sales, marketing and administrative staffs, etc. who over the decades not only brought a new way of vacationing to the world but, over time, literally revolutionized the motel/hotel industry and the way millions of travelers vacation these days.