For those not in the know, Travel + Leisure Co are the world’s leading membership and leisure travel company, Including brands such a Wyndham, who many timeshare owners will be familiar with. Wyndham is credited with being the largest timeshare developer in the world.
Also featured within the group are RCI, 7 Across, Extra Holidays, Panorama Travel Solutions, Club Wyndham, Worldmark by Wyndham, Presidential Reserve by Wyndham, Margaritaville Vacation Club and Shell Vacation Club.
It has recently been announced that an agreement to acquire the timeshare business of global hospitality giant Accor for US $48.4 million. The acquisition is expected to complete in the first quarter of 2024, as we understand it, this will be subject to approval.
Who are Accor?
Accor is a French hotel, timeshare and hospitality business based in Paris. Accor is the story of two friends, Paul Dubrule and Gérard Pélisson, who opened their first Novotel in 1967 at a time when no one in France believed this new hotel business model would work, the rest, as they say, is history.
In terms of timeshare, Accor Vacation Club has 24 resorts and nearly 30,000 members, so not small by any stretch of the imagination. The timeshare business is predominately in the Asia-Pacific region with key strengths in both Australia and New Zealand. On top of this, Accor is the largest international hotel chain in the Asia Pacific region with more than 1,600 hotels in operation, although these are not part of the deal. The addition of Accor Vacation Club to the Travel + Leisure international portfolio increases its membership to more than 100,000 in the Asia Pacific region and grows its club resort count by approximately 40 percent to 77 in the region.
Asset light strategy?
An interesting part of the deal is how Accor will still benefit ongoing, apart from the projected $48.4m selling price. Travel + Leisure will no doubt retain and grow the Accor resort sales teams; the purchase agreement states that Accor will be paid a percentage of new timeshare sales revenue.
According to Duncan O’Rourke, Chief Executive Officer at Accor “The transaction is aligned with our asset light strategy and allows us to monetise our existing business and enhance recurring fee streams”
So what is “asset light”? Well in this sense it means that the resorts, i.e. the bricks and mortar will be sold in total, removing all ongoing maintenance and expenses from Accor, however Accor still retain an income stream.
To draw an analogy, a lot of people ask which resorts are owned by RCI. The answer to that question is none, there’s no such thing as an RCI timeshare resort. From a timeshare owners point of view when looking at the RCI portfolio of exchange resorts, on the surface it appears that RCI own resorts, but they don’t.
RCI still make considerable profits from the business but given that they don’t own a single resort, they could be described as “asset light”; their profit is derived from properties and resorts owned by timeshare developers such as Wyndham, not by owning any resort directly.
TCA comment
Branching into timeshare was no doubt a lucrative move for Accor, however it was merely a deviation from their core business, that of being hoteliers. According to the Accor website, The Accor group’s brands span 100 countries throughout the world, and operate 5,100 hotels.
Once again we see the Accor philosophy of being “asset light”, when viewing the Accor website; over 3,000 hotels within the group are on a franchise arrangement. These hotels are owned by companies and even individuals who pay for Accor branding and management expertise, not by Accor directly.
This is the latest news showing a consolidation within the timeshare industry, the Hilton acquisition of Diamond resorts, also their acquisition of Blue Green Vacations, Wyndham and Travel + Leisure Acquisition, Marriot acquiring ILG (Interval International), Hyatt absorbing Welk, these are all examples of industry consolidation.
In 2003 there were 75 companies operating timeshare on the open market. Today, there are less than a dozen major players as larger branded and public companies have continued to absorb smaller ones. Our best guess is that this trend will continue until there are but a handful of multi faceted hospitality companies left. In terms of resorts and destinations, nothing is likely to change significantly; however, choice of holiday provider will become lesser and lesser as the trend for mergers and acquisitions carries on.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk