Master of Business Administration

Sustainability & Innovation
International Timeshare Industry

SUSTAINABILITY & INNOVATION: INTERNATIONAL TIMESHARE INDUSTRY

March 3, 2015

Faculty of Hospitality & Tourism Management
Master of Business Administration

Table of Contents Abstract 1 CHAPTER 1 – Research Study 2 1.1 Introduction 2 1.2 Research Problem 3 1.3 Research Objective 3 1.4 Research Question 3 CHAPTER 2 – Description of Changing Landscape & Challenging Market Space 3 2.1 Changing Landscape & Challenging Market Space 3 2.1.1 Economic and Industry Analysis 5 2.1.2 Challenges & Strategic Trends 8 2.2 Description and Analysis of Four Key Businesses 9 2.2.1 Marriott’s Aruba Ocean Club 9 2.2.2 La Cabana Beach Resort & Casino 9 2.2.3 Tropicana Aruba Resort & Casino 10 CHAPTER 3 – Research Design and Methodology 10 3.1 Research Design – Data Collection 10 3.2 Methodology – Data Analysis 11 3.3 Quality of the study 11 CHAPTER 4 – Results and Findings 11 4.1 Descriptive Analysis 11 CHAPTER 5 – Conclusion and Recommendations 22 References 24 APPENDIX A – Interviews 25

Abstract

The timeshare industry whether large or small are competing on a variety of areas such as luxury, flexibility and service. It is also the least researched segments of the accommodation of tourists. This paper provides a analysis of the current situation of the timeshare industry focusing on innovation and sustainability of the mentioned industry based on the perspective of the key executives in the industry. Studies/analysis was conducted through questionnaires and secondary data that also analyzes the industry referring to its effects when considering the before mentioned areas. This paper provides also insights and at the same time contributing to a limited body of literature concerning the challenges within the organizations in general.

CHAPTER 1 – Research Study
1.1 Introduction
This chapter encompasses the research problem by focusing on the current and future competitive landscape of the business environment in Aruba through the perspective of executives in the timeshare industry. Furthermore, the research objective will be elaborated on, followed by the research design and methodology, and lastly, the results and findings are presented as well as further recommendations.
1.2 Research Problem
Vacation ownership better known as timeshare continues to outperform the hospitality and leisure market with constant innovation and improvement to respond to the consumers’ lifestyle and needs. The timeshare industry was once dominated by private developers selling one-week intervals, but is now actively developed by hospitality companies offering different price points in different resort and destinations (Market Research Report, 2014). Key factors that are currently influencing the growth of the timeshare industry include the increase of the high-net-worth individual (HNWI) and employed population, combined with increasing demand in leisure and recreation, and increasing internet penetration. The growth is more noticeable in the eco-friendly timeshare resorts; however this growth is being hindered by the low resale value and stringent government regulations.
1.3 Research Objective
This study serves to analyze and illustrate the different aspects in the timeshare industry and its impact on our economy on an international level. Furthermore, this report also provides future implications as to how the timeshare industry can keep up with the changing environment and maintain a sustainable future.
RQ:
1.4 Research Question

CHAPTER 2 – Description of Changing Landscape & Challenging Market Space
2.1 Changing Landscape & Challenging Market Space
The vacation ownership industry has evolved in terms of sales volume, number of consumers and array of developers that have entered the field, and more importantly product lines and the diversity of product designs have expanded over time as well (Upchurch, 2002). Many operators have chosen to develop timeshare alongside traditional hotel or other holiday accommodation developments. These projects have been referred to as ‘mixed use’ resorts and this has already proved to be a winning formula in other markets, especially the United States (Sharma & Chowdhary, 2012). Timeshare first started from fixed unit, to a more flexible arrangement, the float weeks and ultimately the purchasing of points which allows the owner to exchange and trade weeks, units, and seasons (Kaufman, Lashley, & Schreier, 2009).
Many owners are interested in timeshare ownership because of the many opportunities that exist. In most cases, a resort becomes affiliated with one or more major exchange companies which organize the exchange transactions for resort owners (Kaufman et al., 2009). The two widely known organizations that dominate the exchange business are: Resort Condominiums International (RCI) and Interval International (II). RCI is the bigger organization with more affiliated resorts, consumers serviced, a larger stock of weeks, as well as a larger number of confirmed exchanges (ARDA, 2002). The timeshare product was sold primarily as a fixed type of arrangement in which the consumer held the rights to use a specific unit during a specific week per year (Upchurch, 2002). As the consumer became more demanding, the float system emerged enabling the user to use a specific unit while the week ‘floated’, thus giving consumers more flexibility. According to WTO (1997), the future growth within the timeshare industry is likely to emanate from three factors i.e. the emergence of new types of timeshare products such as the point system, the emergence of new markets for the timeshare product and the expansion of existing timeshare markets. The latest revolution is the points system in vacation clubs where consumers can simply purchase or gain points to satisfy vacation needs (Kaufman et al., 2009).
A discussion of the changing product in vacation ownership would not be complete without the inclusion of human capital. Perhaps the greatest strength is the people, their ability to anticipate the changing needs of the consumer and their creativity in developing product and exchange to meet those needs. With the explosive growth in vacation ownership properties has come a scarcity of finding skilled human resources (Stringam, 2009).

Vacation ownership presents a complicated model for taxation and legislation. As vacation ownership products are exchanged for points or other travel products, it becomes currency or a transparent product, which is then taxed. According to a timeshare executive; ‘timeshare is regulated as real estate, taxed as real estate but it is really a tourism product’. Executives involved in legislative arenas anticipate further attempts at taxation as the product evolves. The major concern is that this may be a growing problem as the industry becomes larger (Stringam, 2009).

Increased recreational product has become standard for the vacation ownership property. In addition to the extensive resort-like recreation facilities, recent years have seen an expansion of these to include water parks, spas and spa services. These amenities contribute significantly to the success of their vacation ownership offerings. While location dictates the types and extent of recreational offerings, these high-profile recreational facilities enhance sales of the vacation ownership unit (Stringam, 2009). According to (Deng, 2013), over time, the timeshare product evolved in order to remain relevant to changing consumer tastes, the growth of segmented markets and accelerating segmentation of tourism accommodation products as a whole. This innovation and change of the product over time has been one of the drivers of continual dynamism in the timeshare industry (Christian Rogerson; Wayde Pandy, 2014).

2.1.1 Economic and Industry Analysis
The timeshare industry is defined by an intense competition amongst the big players focusing their competition based on quality, location, flexibility of usage and other exclusive services they offer in the attempt to differentiate from the competition. Actual Leaders in the timeshare industry include the leading player which is Wyndham World Wide Corporation with regards to revenues, the number of resorts and number of owners. Other leading players include Marriott International, Starwood Hotels, Hilton Hotels and Hyatt Hotels (Burlingame, 2014).
Vacation ownership sales, timeshare and fractional sales combined, expanded at 7 percent in 2013 vs. 2012 – which combined with a 10 percent rise in 2012 (over 2011) – are the biggest back-to-back sales growth years vacation ownership has experienced since prior to the economic downturn which set in hard in 2008. Timeshare sales alone increased 11 percent, again the largest jump since 2006 to 2007 (13.5 percent). There were many timeshare companies who had very good growth years, with Diamond Resorts International (58.7 percent), The Villa Group (25 percent), Bluegreen (20.8 percent), and Welk Resorts (18 percent) leading the way. Only Royal Resorts (33 percent) and Fairmont (27.8 percent) reported gains in fractional sales. Fractional sales increased with 3.8 percent in 2012. Since 2009, vacation ownership has been on an upward path and this continued in 2013 (Burlingame, 2014).
The WTO (1997) has stated that there are mounting evidences to show that timeshare has a positive impact on development areas. From a destination perspective, the financial benefits from timeshare include sales of timeshare, maintenance fees, local taxes, on-site payroll, and the purchase of travel facilities. A timeshare development creates permanent full time and part time jobs on site, and temporary jobs are created within the community. The conversion of hotel units to timeshare can release capital for much needed renovation in older hotels, and boost revenues in the short time. The timeshare phenomenon has a fundamental advantage for a tourism destination compared to the rest of the industry (Sharma & Chowdhary, 2012).
The performance of the U.S. economy is as important to vacation ownership as it is to other industries. The U.S timeshare industry contributed an estimated $70 billion in consumer and business spending to the national economy in 2011, according to a study conducted by Ernst & Young for the American Resort Development Association (ARDA). That includes a total of 493,000 jobs with $23 billion in income and $7.7 billion in tax revenue. There are over 194,200 units in 1,548 timeshare resorts in the United States, encompassing a significant portion of the U.S. hospitality industry. Overall, the travel industry has been creating jobs 26 percent faster than the rest of the economy since March 2011, creating 271,000 new jobs in that time (ARDA, 2011).
The timeshare industry within other markets has also seen tremendous improvements. A projection has been made which shows that the growth of vacation ownership in the Asian Pacific basin is expected to be explosive in the coming years. It is foreseen that this growth is being supported both from local, national, and from international companies buying in these markets. This region holds significant promise for both the resort and urban model of vacation ownership. Australia is predicted to continue to show strong growth as a result of the consumer growth in Southeast Asia. The Middle East had also proven to be a growing market with mostly regional national ownership. A study indicated that Africa had not yet shown itself to be a consistently profitable market (Stringam, 2009).

Most development in Africa is local, non-branded vacation ownership. The fluctuating political and economic stability are expected to outweigh any demand for African adventure travel. However, South Africa is a very highly penetrated and very mature vacation ownership market. Accordingly, the saturation of this market does not encourage new development or increased demand (Stringam, 2009).

Europe holds mixed opportunity. While the creation and expansion of the European Union (EU) and the increasing developments in Eastern Europe have been providing new opportunity for vacation ownership development, Western Europe is not expected to be a strong growth market. The vacation ownership product in Spain is more mature and stable than most of Europe (Stringam, 2009).

Central and South America have mixed reviews for opportunity. The political and economic instability of most Central and South American countries resulted in a feast or famine model of development. There is a favorable prediction for growth in the Central American market, concluding with the observation that ‘warm beach always sells ’. However, there is a concern that the economic models throughout most of Central America ‘favor condominium development over vacation ownership’. It’s expected that Mexico and the United States to have steady, strong growth. A combination of favorable changes to real estate ownership laws, increasing real estate values, development and travel from the United States and Canada, as well as demand from Mexican nationals, has fostered abundant vacation ownership development. People also have an interest in returning each year to locations of childhood vacations. This is also a contributing factor to growth in many international markets, with abundant opportunity in the United States and Europe (Stringam, 2009).

There are numerous growth opportunities for the timeshare and vacation ownership industry in the Caribbean region. In fact, it is one of the fastest growing regions for our industry. This is the right time to have a solid and sustainable presence from ARDA Caribbean to help foster and promote this growth. The primary goal of ARDA Caribbean is to promote and protect the legislative interests of developers and owners in specific jurisdictions within the region (Macouzet, 2009).
2.1.2 Challenges & Strategic Trends
The past few years Vacation Ownership WORLD has identified the biggest threats to the industry as including: the financial health of many legacy resorts, the state of the resale market, the consistently bad publicity the timeshare industry is undergoing, the threat to vacation ownership's value proposition, and timeshare rental inventory that is selling for less than the annual cost of maintenance dues (Burlingame, 2014). As ARDA president and CEO Howard Nusbaum said: "The biggest problem of all is the legal documents for many legacy resorts as they were drafted when the timeshare industry was in its infancy, thus documents may require a very hard to reach threshold of a 100 percent vote by the owners to modify the resort structure, programs and services, thus putting these resorts at a disadvantage to make substantive changes that may be required for the long-term viability of the property” (Burlingame, 2014).
As we look into resale of timeshares, there have been many cases where timeshare owners want to gain the most out of re-selling their timeshare. The issue of resale has been something of a complicated matter, and highly dependent on the legal format of the timeshare arrangement (Kaufman et al., 2009). Under the deed of covenant or fee simple arrangement, the owner has the right to sell the ownership like any purchased property. Under the right-to-use arrangement or vacation club (points), no such right may exist. The initial contract of agreement should clarify the position about resale. According to Noguera (2015), Marriott Ocean Club stipulates in its contract that the company will always have the first choice to re-purchase the timeshare upon re-sale. This ensures that timeshare owners will not seek to re-sell online or with other timeshare consumers at a lower price.
Elson and Muller’s research (2002) shows that across all segments of lodging, but especially in vacation ownership, guest expectations are becoming more demanding. Hovey (2002) examined whether or not a timeshare could be more financially feasible and attract a wider market if the industry were able to reduce cost of sales, maintenance costs or exit costs. According to Ragatz and Crotts (2000), maintenance fees and cost of the product were the first and third most frequently cited reason purchasers hesitated in their purchase of timeshare (Pollard, 2010).

Some traditional marketing methods are under threat. ‘Do not call’ and ‘do not e-mail’ regulations have caused significant changes in the marketing methods for some resorts. While many companies indicated that they had already moved away from these marketing models, the independent developers indicated that they are facing challenges in reaching the consumer. Because some markets are reaching saturation and other markets are finding themselves faced with increased competition. Recent concerns over the cost and availability of energy worldwide has several resorts exploring alternative energy sources, such as solar panels, and hydraulic and wind-driven energy generation (Stringam, 2009).

2.2 Description and Analysis of Four Key Businesses
2.2.1 Marriott’s Aruba Ocean Club
Marriott’s Aruba Ocean Club was first opened in 1997 and was the first Marriott Vacation Club in the Caribbean. The timeshare hotel offers 218 one- and two-bedroom guest suites in a six-story, U-shaped building around a garden courtyard. Marriott’s Aruba Ocean Club is part of the world’s largest pure-play timeshare company, Marriott Vacations Worldwide Corporation. Since entering the timeshare industry in 1984, Marriott earned its solid position as a key player and innovator in vacation ownership products. Also, in late 2011, Marriott Vacations Worldwide has established itself as a separate, publicly traded entity focusing primarily on vacation ownership experiences. MVWC continues to offer a diverse portfolio of quality programs, products and management expertise with more than 60 resorts and over 416,000 owners and members. Marriott Vacation Club’s brands include, Grand Residences by Marriott and The Ritz- Carlton Destination Club. Furthermore, the new company’s mission is to preserve high standards of excellence in serving its customers, investors and associates while maintaining a unique relationship to Marriott International, Inc.
2.2.2 La Cabana Beach Resort & Casino La Cabana Beach Resort and Casino started in 1988 as a shared vision between an experience business-group spearheaded by the Mansur family. The idea was to create the most complete and unchallenged timeshare resort on the island. The concept is to provide a home away from home combined with vacation fun. La Cabana has almost 12,000 timeshare owners worldwide. The resort is perfectly located right across from the famed islands white sands and clear Caribbean waters of Eagle Beach, and their amenities assure a wonderful stay for the whole family.

The first sales & marketing company, who was in charge of selling the fixed weeks’ timeshare units, started sales operations on March 13, 1989 and by December 15, 1990 a total of 5000 weeks were sold. This was done under the first management company OHEM.
After having sold more than 70% of the inventory, the developer Casa Grande N.V. decided to sell the unsold units to Blue Green Properties NV in 1997 and transferred the building to the Association in 2003. Blue Green Properties NV decided to stop selling fixed weeks in 2004 and started selling the point system which count for about 29.5% of the inventory.
In 2005 the Board of the Casa Grande Resort Cooperative Association I, terminated the agreement with OHEM through a court case. This important step is viewed as their “Independence".

2.2.3 Tropicana Aruba Resort & Casino Tropicana entertainment bought the resort in 2010 and started operating it as a timeshare resort. However, slowly but surely the structure of the resort started to shift towards a non-timeshare resort. They opened the casino in December of 2011 and are currently renovating the resort. Tropicana Aruba Resort & Casino has only a few timeshare owners and have more transient guests. The resort has a total of 362 one-, two- or three-bedroom suites. Each is a private haven with air conditioning, a complete kitchen, a spacious living room, and a private balcony or patio surrounding the oasis swimming pools.

CHAPTER 3 – Research Design and Methodology
3.1 Research Design – Data Collection
As part of the research method, a 7-point Likert Type Scale questionnaire was utilized in order to measure the current and prospective health of business environment in Aruba. According to (Coulter, 2005) the best way to address strength and weaknesses in an industry organization is by obtaining personal opinions of the strategic decision makers in the industry. For this specific study a total of seven executives were interviewed among a total of 3 timeshare resorts which includes La Cabana Beach Resort, Marriott Aruba Ocean Club, Tropicana Beach Resort. The timeshare resorts were selected on the basis of approval by high-ranked executives of each resort, on a first-come basis.
The questionnaires were collected by performing face-to-face interviews with each of the executives for a duration of 65 minutes and were filled out by the researchers ensuring the validity of the questionnaire.
3.2 Methodology – Data Analysis According to Aliaga and Gunderson (2000), quantitative research is ‘Explaining phenomena by collecting numerical data that are analyzed using mathematically based methods (in particular statistics)’. The secondary data collected (seven questionnaires) for this study was entered into an excel spreadsheet and various descriptive analyses were conducted to review the distribution of the data, to analyze the central points of tendency, amount of variability and the extent to which the variables relate to each other.
3.3 Quality of the study The validity and reliability of your instrument influence the extent to which you can learn something about the phenomenon you are studying and the extent to which you can draw meaningful conclusions (Leedy & Ormrod, 2010). The questionnaire utilized is derived from the widely known ‘The Global Competitiveness Report’ conducted by World Economic Forum. This report has been conducted for 35 consecutive years and has shed light on the key factors and their mechanisms and interrelations that determine economic growth and the level of present and future prosperity in a country (Schwab, 2014).

CHAPTER 4 – Results and Findings
4.1 Descriptive Analysis Presented in the following tables are the results that indicate the mean, median, mode, and standard deviation of each variable within each section of the questionnaire which in turn measures the research question and sub-questions in this study.
Top three primary business challenges facing your organization over the next two years:

Organization associates the following areas with sustainability:

Top three sustainability trend(s) seen as most critical for your company over the next 3 years:

Organization's business model changed as a result of sustainability:

Elements of business model of your company that have changed in connection with sustainability:

Factors that have led to changes in your business model:

The following methods are you used to deal with resource scarcity issues:

Pursuing sustainability-related strategies necessary to be competitive:

How organizations believe that sustainability-related actions/decisions have affected its profitability:

Where do you see profit from sustainability?

Why do you see sustainability as subtracting from profit?

The greatest benefits to your organization in addressing sustainability:

Overall, has your organization developed a clear business case or proven value proposition for addressing sustainability?

Referring to the above mentioned table you can see clearly that the results lean towards the fact of difficulty issues when addressing sustainability (43%). There is no actual success based on these results when speaking about sustainability. More than half of the respondents have either failed to establish/develop a clear business case or did not even putting any effort in it. A 58 % of the respondents state that there unsure if this has already taken place.
We can conclude that this topic is still sensitive and is being indirectly avoided as much as possible since it costs a lot of capital when it comes to environmental issue. The long term unavoidable benefits are to strong to ignore for long.

The most significant obstacles in your organization to evaluating the business cas for sustainability-related strategies:

Referring to the above mentioned table the answers vary allot. 17 % of the respondents signal the issue lies in the lack of individual incentives compared with a 6 % of the respondents’ that state their issue lies in the difficulty quantifying sustainability related risks chain. Further we noticed that 11 % of the respondents chose lack of model/framework as their bottleneck. On the other hand we can say that 11 % chose difficulty capturing comprehensive metrics as a issue. A 17 % of the respondents state that competing priorities is a down point. Lastly a another 17% say that difficulty in quantifying intangible effects as barrier. We can say that being sustainable is costly and executives tend to lean more on making money then spending on sustainability since they are focused on making big profits and sustainability will dig to deep in to that.

How has your organization's commitment to sustainability-in terms of management attention and investment-changed in the past year?

According to this table we can see clearly that the respondents agreed on 2 answers with a convincing 71 % saying that there were no significant changes in their commitment towards sustainability. Furthermore we can say that 29 % are not aware of any changes. With this we can conclude based on the results that the interest level is very low to non when it comes to commitment towards sustainability on managerial level. It will eventually change since the new customers are more aware and critical when it comes to these topics which are very important and also ate the same time sensible.

How do you expect your organization's commitment to sustainability - in terms of management attention and investment - to change in the year ahead?

According to this chart we can see that there is a positive outlook on the coming year when it comes to commitment to sustainability with a 38 %. On the other hand we can see a 46 % whom does not know the actual situation in their company when it comes to committing to sustainability. Furthermore we can see that the other 2 answers which are business as usual/no changes and will decrease significantly/somewhat received a even 8 %.

The following best describes the status of sustainability on the agenda of your organization's top management:

According to the results illustrated in this chart we can conclude that the majority with a 86 % of the respondents

Regarding sustainability in your organization, does your organization have?

In these results we can conclude that a 30 % of the respondents confirm that a clear communication of responsibility of sustainability is present. A 26 % of the respondents state that strong ceo commitment to sustainability is present. 2 of the options which are link between sustainability performance and financial incentives/Personal KPIs related to sustainability where even with 13%. Further we can see that 9 % of the respondents state that a responsible person for the sustainability per business unit is present. As last we can see that separate sustainability reporting and company/operational KPIs related to sustainability share a even 4 %.

Which stakeholder groups are driving the sustainability agenda of your company today?

According to this table 31 % of the respondents refer to senior management when it comes to driving the sustainable agenda. Followed by a 19 % of respondents saying that the customers are in charge of driving the sustainability agenda. Compared to a 13 % of the respondents choosing competitors chain as employees as the key player driving the sustainability agenda. Last we have 6 % respondents whom chose suppliers and local communities affected by operations along the supply chain with a even 6 %.
What is noticeable here that when it comes to this topic management are either open to involve other parties or there are not interested in this topic.

Sustainability caused your company to increase its collaboration with any of the following:

According to this table we can see that the respondents had a even 20 % on the suppliers and customers as answer when speaking about the above mentioned question. On this question we could also conclude that the respondents were even with 12 % on 3 of the answers which are none of the above/contractors and local communities units across geographies. Last we noticed that 6 % of the respondents chose government/policy maker as where it detected a increase in collaboration.
We can say that we were sure that these two answers would excel since in our opinion they are the 2 of the most important stakeholders that contribute to the well being of any company.

Company communicate its sustainability efforts and commitments as follows:

According to this table we were not surprised that the majority chose CSR as the main channel to communicate their sustainability efforts with a 30%. A 20 % of the respondents chose 2 of the options which are 1. integrate it in their annual report and 2. Social media platforms as their channel of communication. In this table we could notice that 3 of the answers had a even 10 %. Which are participation in sustainability ranking/indexes/integrated conferences/stands/roundtables and dedicated website or section on company website.
With the evolving technology we can conclude that companies have quite some options when it comes to communicate its sustainability efforts since there are different ways that are cost effective to communicate their efforts and still reach their intended target.

CHAPTER 5 – Conclusion and Recommendations The numbers in our paper shows that Timeshare hotels are currently thriving in the international market space. The timeshare industry needs to remain dynamic to sustain this success or promote growth.
Innovations play a very important role in the competitive strategy of any hotel. Innovation can be the differentiator providing a competitive advantage to hotels who incorporates it in their strategy. We see innovation is what will enable businesses smooth their path in the world.
Research shows that the important tools when referring to sustainable competitive advantage are in fact innovations, product offerings, service quality, technology, ambience, food and beverage and other services they offered by hotels based on speed & flexibility.

Market penetration could provide many opportunities worldwide. The external environmental plays an important role when it comes to development and sustainability in developing countries. It is imperative that organizations such as ARDA consistently and effectively execute their purpose by being vigilant in terms of taxation and legislation, seeking further consumer protection and governmental action.

Based on our interviews conducted with several key players in the timeshare industry we were informed that another key aspect regarding sustainability is to have strategic investments based on forecasted costs. According to La Cabana’s Safety and Environmental Manager there is an ongoing trend in the service industry; “Service companies are going ‘green’ and many of these ‘green’ programs are based on sustainability in the business sense by reducing energy costs and by using local products hereby stimulating the local business economy which in turn reduces the company costs of purchase. These ‘Green Programs’ sets goals for the company and contains a benchmark program which controls company’s usage of utility consumption per guest night, waste handling and giving back to the community”.

An investment in human resources, such as providing proper trainings, enables the development of staff members to assist in providing high quality service therefor enhancing guest experiences with the goal of creating repeat guests and free promotion, i.e. word of mouth.

References
American Resort Development Association (2002). State of the US vacation ownership industry.
ARDA (2011). Financial performance of the timeshare industry.
Burlingame, S. (2014). 2013 vacation ownership sales leaders. Retrieved on February 6, 2015 from www.evacationownershipworld.com.
Deng, E. Y. (2013). Timeshares: an analysis of development processes and methodologies.
Kaufman, T. J., Lashley, C., & Schreier, L. (2009). Timeshare management: the key issues of hospitality managers.
La Cabana Beach Resort & Casino. http://www.lacabanabrc.com/about-us.

Macouzet, E. (2009). ARDA Caribbean conference.

Pollard, L. M. (2010). Perceived service quality’s impact on behavioral intentions in the timeshare industry. University of Central Florida, Orlando, USA.

Rogerson, C., & Pandy, W. (2014). The evolution and consolidation of the timeshare in a developing economy: the South African experience. Urban Challenge, 25, pp. 162 – 175.

Sharma, S., & Chowdhary, N. (2012). Leveraging tourism: the business of timeshare. South Asian Journal of Tourism and Heritage, 5, 1.

Stringam, B. (2010). Timeshare and vacation ownership executives’ analysis of the industry and the future. Journal of Retail & Leisure Property, 9, pp. 37 -54.

Upchurch, R. (2002). Product design evolution in the vacation ownership industry: from fixed weeks to points and vacation clubs. Journal of Retail & Leisure Property, 2, 3, pp. 239 – 253.

Upchurch, R., & Lashley, C. (2006). Timeshare resort operations.
Vacation Ownership Timeshare Industry Report (2014). Retrieved on February 2, 2015 from www.marketresearchreports.biz.

APPENDIX A – Interviews
Marriott’s Aruba Ocean Club
Highest Ranking Leaders
General Manager Mr. Erwin Noguera has been in the tourism industry for more than 20 years. Mr. Erwin started his professional career as R&M Mechanic specialized in air conditioning and refrigeration. During this period he also worked on guests request and was very familiar with the service process of the maintenance department. In 1994, Mr. Erwin became the assistant Director of Engineering at the Hyatt Regency Aruba Resort & Casino where his responsibilities were to oversee that the proper procedures were taken within the department and that all aspects were according to the hotel’s standards. After 5 years, he got the opportunity to become the Director of Engineering at the Hyatt Key West Marina in the US where further developed his expertise in the field of engineering. Mr. Erwin later became the Director of Engineering at Park Hyatt in Toronto, over 1 year he maintained his position but transferred to the Aruba Marriott & MVCI Complex and in 2009, he moved to the Hyatt Regency Aruba Resort & Casino. After 3 years,
Mr. Erwin is now the General Manager at the Marriott’s Aruba Ocean Club and oversees all aspects of the property management including the financial performance, maximization of profitability, executing the provisions of Marriott Vacation Worldwide Corporation, design and execute development plans, annual action plans and investment, maintenance and expenses plans, and overseeing the compliance of applicable legal regulations.
According to Mr. Noguera, Marriott as an international product is stabilizing itself with e new point system program which would prevent our timeshare owners from going to Interval International to exchange or hand in their timeshare. People are looking for flexibility. For example the destination based points program. Destination based point program has several benefits. Marriott offers reward points in its hotels and have also introduced destination points in the timeshare industry. Timeshare owners now have the flexibility to exchange and go on cruise ships, other destinations and Marriott reward points. Marriott is consistent with the products it offers and services it provides. Thus, Marriott delivers high quality service. The timeshare industry on Aruba consists mostly of retired adults who have the flexibility of coming on vacation not only during the weekends but also during the week. Furthermore, timeshare owners used to come to Aruba for one week. However, with the new points system, they can stay for weeks.
When asked about resale of timeshare, Mr. Noguera believes that it will affect the timeshare industry. Marriott has approximately 218 units and there will be timeshare owners who would like to re-sell their timeshare for more money with a prospect buyer. However, Marriott timeshare hotels place the right to refusal policy in its contracts; Thus, if you own a timeshare unit at the Marriott, the company has the right to re-purchase the unit first.
Our sustainability approach depends a lot on the availability of products or system we currently have on the island, says Noguera (2015). . Marriott currently focuses on recycling, cleaning of beaches, reduce waste, re-use water and reduce electricity usage. In 2013, Marriott Ocean Club reduced its electricity with 400,000 Kwh and in 2014, with 200,000 Kwh. The issue we currently have is that the facilities are available but we do not have the resources, in this case labor, to maintain these facilities. Preservation of our current resources is key to sustaining the future.
Director of Rooms Operations Ms. Lorraine Mariana started her career as a front desk clerk back in 1994. Ms. Mariana ensured that all guests were treated equally and that concerns and complaints were immediately handled increasing customer satisfaction. Customer service was top priority for her. Through her continuous dedication and excellent performance Ms. Mariana was promoted to Front Office Supervisor where she supervised all front office associates and contributed to the development of efficient procedures to carry out all necessary duties. In 2001, Ms. Mariana was given the opportunity to become the Rooms Operations Manager in the US where she excelled in her performance.
In 2010, Ms. Mariana was promoted to Director of Rooms Operations where she is now responsible for coordinating the organization and administrative functions in all areas of the Rooms Division, ensuring total compliance with standards of operation, ensuring that staffing is maintained at an appropriate level to match business demand, participating in all regular and ad hoc operational meetings and in the formulation of strategic business plans contributing to the strategic development of the Marriott’s Aruba Ocean Club. Furthermore, by closely monitoring the financial performance of all departments, in particular monitoring all Rooms expenses to ensure that they are kept in line with budget she provides solutions to improve problem areas and assists in implementing corrective measures to improve company performance. Her role towards sustainability is in reinforcing her associates to participate and contribute in the resort’s green efforts.
Front Office Supervisor Mr. Marvin Leonidas started his career in the hospitality industry as a part-time activities coordinator back in 2004. In 2007, he applied for the position of Front Office Clerk where he ensured a high quality standard of customer service throughout his career. He also contributed significantly to the constant improvement of procedures while maintaining a customer-driven attitude. In 2012, he was promoted to Front Office Supervisor.
Mr. Leonidas needs to ensure that the department provides outstanding service and ensures customer satisfaction, address customer concerns and complaints promptly and professionally, respond to customer needs and requests in a timely manner, plan and assign workloads for front office associates, supervise associates in their assigned job duties, and ensure associates follow company policies and operational procedures. His contribution towards the company’s sustainable development is to continuously engage in environmental efforts both in- and outside the organization by participating in green efforts contributing to the community and adhering to corporate social responsibilities.
Divi Resorts
Highest Ranking Leaders
Managing Director Divi Resorts Aruba & Bonaire As the Managing Director for Divi Resorts, Alex Nieuwmeyer is in charge of overseeing all properties. Mr. Nieuwmeyer manages and controls the properties’ cash flow. Furthermore, Mr. Nieuwmeyer will seek for additional advice on how to create new processes that are more efficient and that will eventually contribute in increasing the company’s profit.

Managing Director – Vacation Ownership Sales (VOS) As the Managing Director of VOS, d.b.a. Daltime N.V. (the firm in charge of the sales and marketing efforts of timeshare properties of Divi Resorts), Craig Bosio oversees all aspects of sales and marketing for Divi Resorts throughout the Caribbean. Craig has been involved with vacation ownership from the initial development of the timeshare business in the Caribbean through the evolution of Residence Clubs, Fractional Ownership and Points Clubs. Mr. Bosio has generated 75 percent of the sales that the company has generated through the Caribbean. He is in charge to advocate changes, restructure sales, product programs, build strategic partnerships, and maintain the continuity of the product. Lastly, Mr. Bosio has been involved in the implementation of company strategies and was responsible for many of the company’s success.

General Manager – Divi Phoenix As the General Manager at the Divi Phoenix, Mr. Griffith oversees all aspects of Property Management, including maximization of financial performance, guest satisfaction and staff development within established quality standards. Mr. Griffith has 38 years working for Divi Resorts and was involved in the growth of the company that started with ’40 casitas’ next to the beach back in 1969. His role towards strategy development within the company is really important since he assists with all information gathered from guests. Being constantly aware of the rapid changing environment and customer behavior, Mr. Griffith gives advice to the company to make relevant changes and adapt their company strategies towards its guests. Being on top of the importance of sustainability, Mr. Griffith manages and supervises the implementation of their sustainable strategies as well.

According to an interview with three key leaders within the company, specifically Mr. Alex Niewmeyer, Managing Director at Divi Resorts Aruba and Bonaire, Mr. Gerrit Griffith, General Manager at the Divi Phoenix, and with Mr. Craig Bosio, Managing Director Vacation Ownership Sales, Divi Resorts is a company that operates with an open system model acknowledging the importance of external influences. The company strategies are based on information gathered from guests and the management team evaluates and tracks this feedback really close to modify their strategy towards their guests needs. This has been one of the keys elements of the growth of Divi Resorts during the years and one of the reasons why the company accepts the importance of sustainability. The company sustainability operations are based on ‘reduce, reuse and recycle’, known as the three R’s of sustainability. On the operational level, these three R’s are implemented looking at the long term for the next generation and to create more efficiency and eventually more profit. Divi Impact and scholarship are examples of charity programs established in order to do something for their employees and for the community. These programs are established with the mission to educate the community and let them be able to stand up for themselves, instead of having the company giving out handouts and donations. Giving trainings and support career development is also one of the company’s values.
La Cabana Beach Resort & Casino
Highest Ranking Leaders
Environmental & Safety Manager
Mr. Delano Sabajo Started out as a Shift Engineer what is known as an “All Arounder”. Then he did a course to become the “Energy Coordinator” and view months after graduating he became the “Environmental & Safety Manager”. The additional courses that he took are: “Environmental Management”, Middle Management and HVEC Technician.
The most important aspect towards the company’s sustainability is to stay in business. The key is to have the right investments based on speculations regarding future cost. These costs are for example: operations, utilities, and payroll etc. It’s not only about cost reduction and equipment, but also your employees, for example trainings etc.
An example of equipment investment is the purchase of new chillers. New generation chillers are very efficient when it comes to energy consumption. When sudden energy price increases occurs you can break-even with the consumption. You could then reduce the amount of Kwh needed for the operation of a cooling plant. If no energy price increases, it could be translated into a win-win situation for the company. The production of the cooling plant refrigerant R22 (which is used for the cooling of the chillers) is almost terminated. This will force you to purchase different new and improved environmental friendly products. The refrigerant R22 and its predecessor R12 are responsible of the contamination and depletion of our ozone layer. The damage with regards to the ozone-layer caused by these products on Aruba is minimal. But in big countries these product have contributed greatly to the destruction of our ozone- layer causing global warming. La Cabana used to have florescent-lamps which are very energy efficient but due to the fact that it contained Mercury they switched over to Led-lamps. Mercury pollutes and contaminates the ground when it is disposed. The led lamps are more expensive and more energy efficient then the florescent lamps but the negative impact on the environment is much smaller.
La Cabana is also an “Earth Check” green resort since the year 2000. Earth Check is an international environmental program that audits the environmental responsibilities of companies. It set goals for the company and it contains a benchmark program which controls company’s usage of utility consumption per guest night, waste handling and giving back to the community. Most of La Cabana’s products are biodegradable. The Earth Check program promotes companies to use local products & services. One of the benefit is that you safe on stockpiling. This occurs mostly when products are ordered abroad. The down part is that Aruba doesn’t make many products. There is also a trend going on in the industry of tourists wanting to stay at an environment conscious company. Cabana is now a Platinum level in the Earth Check program.
Assistant General Manager
Jessica has been 5 years in the position of Assistant General Manager, and 27 years in the company. Mrs. Franken worked with the company, from day one, while it was still in the planning phase before there was any building structure. This was done by selling Time-Shares based on future hotel existence. She remained in the Sales & Marketing department for 5 years but mostly in an administrative position. When they dissolved the company that contained the “Sales & Marketing” department she transferred to the resort as Operations. That time the resort was mostly a leisure hotel and the developer was selling Timeshares. The Sales office gave invitations to random tourists on the island to visit their office and become Timeshare owners. La Cabana’s Marketing department had the responsibility to attract potential guests from abroad to come to Aruba and stay at La Cabana. These leisure guests were then approached to have them converted into Timeshare owners enabling guests to stay at La Cabana in a certain room in a certain fixed time frame. Mrs. Franken is now head of the following departments: Housekeeping, Front Desk, Bell Services, PBX, Activities, Health Club, Pool & Beach, Owner Services and Night Manager. Strategic Planning is done by the Executive team. It’s the General Managers task to set everything in-place for each Division Head to see which strategy they are going to take.

The La Cabana is a local company and does not belong to a hotel chain or franchise. This means that they do not receive any international franchise or hotel chain sustainability assistance. “Blue Green Properties” which is still a La Cabana member managing about 30% of their “Point System” inventory does make promotions for them. To sustain and move forward they partially rely on “Blue Green Properties” expertise. These expertise are Blue Green Properties own hotel-chain service standards, (room) products and best practices. . Blue Green has its own exchange program that enables its members to be exposed to La Cabana’s promotions. Blue Green Resorts is a company that focusses on going green. La Cabana has now been a member of “Earth Check” for 10 years and has its platinum level. La Cabana is totally committed to being “green” and they contribute to the environment by managing waste and recycling. La Cabana needs to comply and pass the yearly Safety Audits in order for “Blue Green Properties” to be able to assist them with more sales. There is also a Quality Audit that occurs twice a year. This audit inspects the quality of operations, services (SOP’s) and products of their hotel. La Cabana has recently been admitted to be affiliated to “Interval International” which is a Quality Vacation Exchange Network. This network with over 5000 other hotel members allows their clients/guest to exchange their timeshare stays within the hotels that is affiliated with this network. This company has very high standards and different levels of premier resorts. If they fail this audit you won’t be considered as a quality hotel and loose its membership. It is Mrs. Franken’s duty together with the other executives to ensure to qualify for all audits to that gives them access to these international networks to ensure the sustainability of their resort.

Financial Controller and Head of IT Department
Mr. Anthony started studying Accounting in the United States. After two semesters he stopped and decided to get his Bachelor’s Degree in Hotel management. After returning to Aruba Mr. Anthony followed and completed an additional course in Business Administration and then started to work at the La Cabana. At first he was enrolled in a Management Program. After completing this program he was approached by La Cabana to work for them as a full-time employee in the Accounting department. Mr. Anthony received 4 promotions within the department and is now the Financial Controller of the La Cabana hotel and head of the IT department.
His concern towards the company sustainability is that degree of taxing of tourists. Aruba needs to be careful of not becoming a too expensive destination for tourists to visit. If this occurs the market for Aruba could decrease rapidly. The present tourists are not 100% loyal as they used to be. The changing market shows that tourists wants to go further, e.g. to China. The market of our old “loyal” group is becoming older and less. They are going on social security, pension and won’t be able to afford the airfares. We can’t really focus now on the wealthy tourists because their difficult to convert to loyal timeshare members. They are more interested in seeing the world and travel to distant places.
Tropicana Aruba Resort & Casino
Highest Ranking Leaders
Financial Controller Mr. Randolph Ponson has a Bachelor degree in business economics. He also has ample experience in the hospitality industry in the position of Financial Controller. Due to the nature of the business and considering the challenges it brings with it, he chose to further broaden his experience by earning before mentioned degree and by also cross-training in most departments. This allowed him to take courses as well, such as Food and Beverage management, H.A.C.C.P., Sales and Marketing, Timeshare Sales and Marketing, Purchasing, Storeroom Management, Labor Law and others. Besides Financial Controller, he has worked as a business consultant, secret shopper and he has assisted in the opening of two hotels, one Casino, several F&B businesses and a Water park (Morgan’s Island). While working at the water park he was challenged by the investors to function as the General Manager during very difficult times. As the Financial Controller of Tropicana, he prepares the financial statement; discusses the results with Corporate, GM and other executives. He also prepares variance report and seeks for justification of accounts that are above or below budget, he makes sure the resort is in compliance with the S.O.P.’s, that proper audit and controls are being performed, and the day to day accounting tasks are being done. A Timeshare budget must be prepared to calculate the Maintenance Fee, a Resort and Casino Capex and Opex budget.

Chief Engineer Mr. Angel Rojas has a college degree in engineering and has 26 years of experience in this field with a background in Electronic Engineering, Facility Management, Emergency Medical Technician, and Emergency Operations Management.
At Tropicana Aruba Resort & Casino, Mr. Angel Rojas coordinates the maintenance of the property and equipment and also provides P&B service and landscaping. Mr. Rojas is also responsible for the capital reserve planning and operational and utilities budget. Lastly, he oversees a man power force of 37 team members.
Operations Manager Mrs. Angelica Christiaans has gained her experience starting from bottom up with about 30 years of experience in the tourism industry working in other Caribbean islands such as St. Maarten and now Aruba
Mrs. Christiaans roles and responsibility is overseeing the operation of the Front Office, Housekeeping, Reservations, and Members Relations. She is also responsible for compiling and operating the resort within the authorized budget, implementing new procedures and standards as directed, reviewing daily security, front desk & housekeeping reports; take action where necessary, and authorize purchasing requests for abovementioned departments
In conjunction with the engineering department, they focus on an environmental mission which in fact is creating a strategic plan that will carry out the sustainability objectives of the company, and educating employees on how to be “green” in the workplace. Another action which is being taken which is similar to the engineering department is focusing on the water costs and trying to reduce this as much as possible.