The ARDA International Foundation has released its annual report titled Financial Performance 2011: A Survey of Timeshare & Vacation Ownership Companies.  The report is available for purchase from ARDA’s website.  Here’s a quick overview of some of the report’s findings:

Overall Sales

Net originated timeshare sales decreased 2.4% between 2009 ($4.74B) and 2010 ($4.63B).  While this may not initially look positive, remember that this sales figure dropped 28.3% between 2008 and 2009.  Some other good news:

  • Public companies experienced a weighted average increase in sales of 1.2% for the period.
  • Companies with more than $250M in net originated timeshare sales reported an average decrease of only 0.2%.
  • More companies with net originated timeshare sales below $250M reported growth as compared to 2009. 
  • Companies with points-based offerings experienced a weighted average increase in sales of 3% for 2010.

Key Metrics/Ratios

Sales commissions, marketing costs and general and administrative costs were reduced in all but one company category, resulting in a general improvement in pre-tax margins.  In thinking this through, I found the following most interesting:

  • The all-company average pre-tax margin pushed across the 10% threshold, with significant improvement for private companies (+6.3%) and companies selling traditional interval products (+5.3%).
  • The sales tour metrics VPG and average transaction value improved across several company categories.
  • The number of companies reporting total sales/marketing costs as less than 45% of net originated sales increased by 10%.  However, the number of companies coming in at 60% or more increased almost 5%.  
  • 83% of companies report the share of net originated sales to existing owners at 30% or more.  54% of companies report a “reload” share of 50% or more.  Not surprisingly, companies with points-based offerings appeared to lead the charge, increasing their share of sales to existing owners from 41% to 74%.