Is Timeshare “Togethering” Profitable?
Tuesday, October 24, 2006
Towns across America are weighing their options, and their decision determines whether the new style of resort will be built in their areas. What’s the deciding factor? It pretty much comes down to the taxes.
In an October 16 meeting with town council members at Snowmass Village, Colorado, Hyatt Vacation Ownership vice president Larry Shulman and fractional developer Pat Smith explained Hyatt’s intent behind their recent application for a land use permit.
Hyatt Vacation Ownership is seeking to develop vacation properties to fill a new niche market. According to John Burlingame, a Hyatt Vacation Club vice president who had previously spoken before the Snowmass Planning Commission, more families are traveling together as a group. There is also a trend among extended families to buy shared vacation property. Hyatt referred to the concept as “togethering.”
To meet this specific need, Hyatt wants to offer fractional ownership of 51 residences, seven of which will be five-bedroom units; 25 will be four-bedroom units, with the others offering either one, two, or three bedrooms.
While council members were concerned about maintaining high occupancy of these larger units, Shulman reminded the group that timeshare owners typically either trade their week or rent it directly to another vacationer. Any Hyatt timeshare units that are not rented are listed in the global Hyatt reservation system as part of the Gold program, making them available to roughly one half million potential renters.
Hyatt estimates that if construction stays on schedule the properties will be available for occupancy in late 2009. By that date, Hyatt estimates that the active membership of the Hyatt Vacation Club will number somewhere around 40,000 members.
How does this impact the tax issue? Occupancy rate is the crux of the matter. Can a Colorado timeshare or fractional resort with a higher occupancy rate generate more tax money for the town via individual owners than a hotel with a lower occupancy rate but the added benefit of sales tax on top of property tax? Snowmass Village will be letting Hyatt and the rest of us know what they think.
Tell us about your experiences with “togethering!” How does it work for your family? Do you stay near home, or go somewhere in between Cousin Louie in Louisiana and Aunt Elma in Washington state? What timeshare company or fractional resort has been most accomodating for your large gathering?