VACATION OWNERSHIP, AND THE BVI TOURISM OPPORTUNITY

From September 14th through the 15th 2009, hundreds of delegates from the vacation ownership and hotel development industry, along with lenders, architects and investors, gathered for the 11th Annual Vacation Ownership Investment Conference (VOIC) in Orlando, Florida. In response to the setbacks presented by last year’s economic environment, this year, the conference titled “Opportunities in Adversity,” turned its attention to the industry’s current coping methods and the arising opportunities expected to create momentum and lead the industry forward.

Present at this event were Tim Peck, Chairman at OBMI and Doug Kulig, Chief Executive Officer at OBMI. During the conference, Peck shared the stage with other industry leaders to discuss “Value Engineering Strategies in the New World.”  

Value, as defined, is the ratio of function to cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements. “The most significant opportunity for value creation is in the design stage,” noted Peck. “Value can be created in the aesthetic quality of a structure and functionally, well-designed plans have significant operational efficiencies with savings to operational costs,” Peck added. Peck’s messages during his panel also included topics of sustainability and the use of local resources and materials, which can have significant long-term savings.

Tim Peck, OBMI Chairman

The Caribbean was used as a prime example of a region using sustainability in value design. “It is our privilege to be part of such an important forum especially in these challenging times,” indicated Peck. “Within these challenges are exciting moments that present great opportunity for innovation within various markets. In the BVI, where OBMI has its Caribbean roots, the vacation ownership or higher-end fractional or private residence club sector has tremendous potential for growth.”

Despite the current financial conditions and the difficulty of forecasting a market rebound with total precision, there was a real sense of optimism among VOIC experts suggesting that hospitality and vacation ownership will continue to grow. One reason to believe this outcome is signaled by the sustaining high level of interest among consumers regarding vacation ownership and time-sharing. According to Peter Yesawich, keynote speaker at VOIC and CEO of Y Partnership, a leading research firm specializing in travel and hospitality, vacation home rentals increased 92 percent in 2009 compared with 78 percent in 2008. Furthermore, the Y Partnership study revealed that future timeshare buyers are willing to pay as much as 20 percent more for a product or service that has a level of customization to their specifications.

With its infinite allure and closeness to the U.S.,-one of the largest vacation ownership consumer regions- the Caribbean can take solid advantage of this personalized service strategy. In fact, according to Yesawich, overall interest in traveling to the Caribbean increased 13 percent from last year, making the area an important emerging market. For the BVI this is a promising prospect as well, given that the travel and tourism economy in the BVI is expected to grow by 4.6 percent per annum between 2010 and 2019, according to a 2009 World Travel Tourism Council study. Similarly, with its spectacular natural beauty, exposure to cruise ship traffic and top-notch hospitality and lodging capabilities, the BVI has significant growth opportunities, especially in fractional, private residential club properties and destination clubs, which in turn are big movements in the industry.

The industry movement toward the fractional and club sectors has resulted from an adaptive reaction from second-home buyers challenged by the current economy, the conversion of existing stagnated condominium developments, and traveler’s propensity to secure lower long-term lodging rates. For those communities that have an existing depth of vacation ownership, this has helped maintain high occupancy where traditional resorts are suffering. For developers, it has also been a coping strategy as a response to the recent credit crunch, which caused many hospitality developments to stall. Consequently, many developers are diversifying their product portfolio as a method of generating more revenue options from services that respond to the current market demands.

“There is no doubt that the industry has been more cautious in developing new projects, and has taken measures to adapt and minimize risks,” said Doug Kulig. As an example, Kulig mentioned the growing trend in fractional and destination clubs as well as the increasing emphasis on the importance of credit worthiness. “From adaptation comes progress, and we are confident that the vacation ownership industry will continue to grow and expand,” said the executive.

The current economic landscape has also generated for many developers a significant number of unsold inventory, which in turn has either slowed down many future projects or has deterred many investors from building in established and matured markets. As a response strategy, developers have been more inclined to venture out and expand into new markets within the established markets of Mexico, and the Caribbean, For the BVI, this is source of good news, since many American vacation owners and potential buyers, which represent the largest industry buyer in the region, currently seek exotic destinations close to home.

FOR ADDITIONAL INFORMATION ABOUT OBMI OR TO INQUIRE ABOUT SERVICES, PLEASE CONTACT:
Steve Fox, British Virgin Islands office
T  284 494 2148 / F  284 494 3898
[email protected]
www.obmi.com

For seven decades, OBM International has been the premier full-service design-consulting firm in Bermuda and the Caribbean. Today, with nine multinational offices, projects throughout the world and a diverse team of experts, OBM is a global leader in luxury hotel/resort design development, architecture, master/town planning and interior design, with landmark projects in the Caribbean, the Americas, Europe and the Arabian Peninsula.

OBM has design offices located in Antigua, Bermuda, British Virgin Islands, Cayman Islands, Madrid, Miami, Muscat and Trinidad and Tobago.