This article originally appeared in Travel & Hospitality Tech Outlook magazine.
Neither hotel nor peer-to-peer lodging, timeshare stands apart from other leisure accommodations. And while many major hospitality brands have a timeshare presence, it was independent properties that paved the way.
Many of these pioneering resorts date back to the 1980s and even the 1970s. Today, they face a number of challenges — aging infrastructure; aging owner attrition, which leads to unused inventory; and outdated technology.
“I started Vacatia,” says CEO Caroline Shin, “because the timeshare industry missed out on the innovations that occurred in the rest of the hospitality space.”
Shin speaks from experience. Head of product in Hotwire’s early days, she had a front-row seat as technology transformed travel booking. She later led Starwood’s revenue management and CRM team.
Now, 10 years after Vacatia’s founding, Shin and her team have made it their mission to modernize independent timeshare resorts. And it starts, as it did at Hotwire, with the right technology.
“A big part of our initial work is modernizing tech,” Shin says. “Some of the resorts don’t use software, and others use software from the 80s.”
Vacatia’s mix of proprietary tech and best-of-breed property management software has helped create resort-level efficiencies that allow staff to focus on elevating the guest experience. Most importantly, their implementation has contributed to significant rental revenue gains—something not typically associated with timeshare.
“When we walk into an independent timeshare, it’s often 30 percent to 60 percent empty,” Shin explains. “Unlike the brands, the independents are not actively selling and bringing in new owners.”
Compounding the challenge posed by inactive sales is one that has plagued the timeshare industry for decades. As owners age, they often stop using their timeshare due to a physical inability to travel, no means to pay maintenance fees, or both. The weeklong intervals that they purchased go unused, and the unpaid maintenance fees lead to lost revenue for the HOA, making repairs and improvements unattainable.
So, rental revenues pose a tremendous opportunity for resorts that need to offset deficits created by delinquent owners. Shin estimates that prior to Vacatia’s involvement, one-third of the properties didn’t do systematic rentals at all. The rest did, but results were limited by lagging tech and resources.
Vacatia typically doubles rental revenue after its first year on the job. Rental-designated inventory is distributed through hotel-centric OTAs such as Expedia and Booking.com, as well as vacation rental platforms like Airbnb and Vrbo. But Shin and team also saw a need for an OTA that extols the virtues of resort residences—a label that she uses to collectively describe timeshares and condo hotels. Since one didn’t exist, they built vacatia.com from scratch. Keeping it proprietary, Shin says, gives Vacatia control of the consumer experience from start to finish.
There’s nuance in all of this that hotels have never faced— not during Shin’s Hotwire days and not today. When timeshare resorts are occupied by both renters and owners, property GMs often have to get creative, telling an owner they’ll be staying in a unit comparable to or better than the one they own to avoid making a renter move from one unit to another during a short stay. Optimizing lock-off inventory and distributing rental revenue fairly are additional timeshare-specific challenges that Vacatia has risen to time and again.
But Shin says the credit for overcoming these obstacles should be shared. True, the Vacatia team has great ideas and vast experience, but the owners possess something just as important.
“They have a lot of love and care for the resort,” Shin says. “The owners and staff have known each other for decades. It’s a community.”
“We want to retain what makes them amazing while modernizing.”