Timeshare conversions tighten Kauai hotel market

Started by Newshound, February 15, 2004, 12:39:36

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.


Timeshare conversions tighten Kauai hotel market.

Kauai hotel inventory has declined more than 15 percent in the past three years as timeshare conversions take rooms off the market. That's why Garden Isle hotel occupancy reports have been consistently good even during slow weeks for the rest of the state.

That's what happened in last Friday's weekly report from Hospitality Advisors LLC, which found statewide hotel occupancy down about two and a half points from the previous week and about nine points from the previous year, but Kauai occupancy was up 25.2 percent year-to-year.

Hospitality Advisors President Joe Toy explains that timeshare sales have removed hundreds of rooms from use by hotels on Kauai. "Previously, if a timeshare unit was not yet sold, it was rented as a hotel unit and counted as such in my survey until it was sold, e.g. a timeshare property has 300 units, 200 of which were sold as timeshare, 100 still to be sold but rented as a hotel room in the meantime," Toy says. "These units were then finally sold, and removed from rentable hotel inventory once all the week intervals were sold."

In the past two to three years, this process has intensified until timeshare units now make up 25 percent of all visitor accommodations on Kauai and are sold out. "Kauai saw improved hotel performance during that time due in part to the shrinkage of rentable hotel rooms," he said.

The effect has not yet been noticeable on other islands to anything like the same degree as on Kauai. Maui timeshare conversions hotels, for example, are still selling a lot of their inventory as hotel rooms, Toy said.

So the bottom line is that Timeshare is getting more popular? Is my understanding correct?

Boss Man

Well yes you could say that. The industry is worth in excess of $8 billion annually. The top 10 timeshare companies alone reported combined sales in excess of $2.64 billion in 2002. Looking at the industry now, a lot of the big hotel chains are now getting in on the game; Marriot, Hilton, Sheraton, Disney, Airtours ... the list goes on. I guess that the chains know that more money is to be made per room selling it as timeshare than letting it out as a hotel.

If you look at a lot of the timeshare resorts, they are origionally hotels, and some of the rooms/apartments are still 'hotel'. As a typical example, Alanda Club Marbella is made up of -

1. Timeshare
2. Hotel
3. Private Members Club

Now thats diversity !!

The trouble with converting hotels to timeshare is at the end of the day the rooms are rooms - unless they plan on making two rooms into one.

Our first exchange through RCI was to a studio and when we arrived we were very disappointed.  It was just a small room with a bed which pulled down from the wall (i think the Americans call it a murphy bed) and a small kitchen area.  Now I know studios are small, but when the bed was in place we couldn't move without clambering over it.  I now will not accept a studio as an exchange.

You have to be very careful with Studio's. Some can be great and some very bad. AS you say, best thing to do is to avoid them.

Powered by EzPortal