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US Vacation Ownership Market - Outlook and Forecast 2023-2028
The U.S. vacation ownership market experienced substantial growth and was valued at USD 10.08 billion in 2022. It is projected to reach USD 15.32 billion by 2028, with a compound annual growth rate (CAGR) of 7.22%. This growth can be attributed to the increasing adoption of point-based vacation ownership, which offers numerous benefits such as luxurious accommodation, attractive tourist services, and enhanced travel experiences. Additionally, the rising preference for adventure and seasonal holidays among consumers contributes to the surge in demand for vacation ownership in the U.S., further driving market growth.
The hotel occupancy rate serves as a crucial performance indicator in the hotel industry. In 2022, the occupancy rate exceeded the pracademic levels of 80.8% and reached 82.6%, indicating a positive trend. Augmented reality (AR) is poised to become one of the top hotel and timeshare technology trends in the coming years, offering unique opportunities for the industry. Point-based timeshares have gained popularity as an alternative to traditional fixed-week timeshares, providing owners with flexibility and convenience in planning their vacations. The growth of the tourism and hospitality sectors in the U.S. also supports the expansion of the vacation ownership market in the country.
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USD 10.1 billion in 2021
Type, Occupancy, Owner Type, and Region
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AR technology holds significant value for the hospitality industry as it enhances the physical environment offered by hotels through virtual elements. As the target demographic shifts towards millennials, who are more inclined to use digital technology and invest in virtual reality (VR) and AR devices, the importance of technology in the vacation ownership industry has increased. With the momentum gained by AR and VR, new growth opportunities are expected to arise in the U.S. vacation ownership market.
A point-based timeshare allows owners to plan their vacations according to their preferences, offering flexibility and convenience. This type of timeshare also ensures exceptional customer service, personalized concierge services, and a wide selection of amenities, dining options, and hotel choices, maximizing the enjoyment of vacationers. Point-based timeshares provide members with the opportunity to explore destinations globally, expanding their vacation experiences.
When purchasing a timeshare, owners are responsible for paying annual maintenance fees. These fees cover various maintenance and repair costs associated with the property, including amenity repairs, pool cleaning, golf course maintenance, gym equipment servicing, landscaping, record keeping, property insurance, administration, and scheduling. According to a 2018 study by ARDA, the average timeshare maintenance fees increased by approximately 4% annually from 2013 to 2017. It is worth noting that these fees serve a broader purpose than just property maintenance, as they contribute significantly to the income of timeshare companies. In some cases, owners may also need to pay additional assessment fees to cover expenses such as natural disasters that are not included in the regular maintenance fees. The high maintenance costs associated with owning a timeshare can act as a hindrance to the growth of the U.S. vacation ownership market.
The market is segmented based on various factors, including type, occupancy, owner type, and region.
Segmentation by Type
Segmentation by Occupancy
Segmentation by Owner Type
Segmentation by Region
The largest contributor to the U.S. vacation ownership market is expected to be the timeshare ownership type segment. Timeshare ownership is a popular form of vacation ownership where multiple individuals own the rights to a resort or vacation property through a fixed week, season, floating week, or point-based system. According to ARDA (American Resort Development Association), timeshare ownership involves shared ownership of vacation property, which may or may not include an interest in real property. In the past, timeshare ownership was typically based on a fixed-week basis each year. However, leading vacation brands and clubs now offer a more flexible and versatile point-based system. Timeshare resorts provide additional privacy and space, and people can even rent out their unused units for certain periods.
The U.S. vacation ownership market can be segmented based on occupancy, including owner, renter, exchange, marketing, and vacant guest segments. In 2022, the owner segment accounted for the largest market share, representing over 43% of the market. Owner guests are individuals who have purchased the right to occupy a specific real estate unit during a designated time period. For example, purchasing a one-week timeshare equates to owning 1/52nd of the unit, while a one-month purchase represents 1/12th of the ownership. It is anticipated that the owner segment will generate an additional revenue of USD 2.33 billion during the forecast period.
Among the different owner types, Generation X held the largest market share in the U.S. vacation ownership market in 2022. This generation is driven by the desire for flexibility and unique experiences, contributing to the demand for timeshares. Unlike previous and subsequent generations, Generation X tends to have higher travel spending, with over 70% of them using online travel agencies for information and purchases. Additionally, many Generation X members, due to career demands, prioritize family vacations over solo trips and prefer nearby, family-friendly resorts.
The Southern region of the United States dominated the vacation ownership market, accounting for over 46% of the market share in 2022. This dominance can be attributed to several factors, including the region’s large population base, which leads to significant domestic travel, the presence of rural areas, and growth in the real estate, tourism, and hospitality sectors. The Southern region includes states such as Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
The U.S. vacation ownership market exhibits a high level of fragmentation, and this fragmentation is expected to intensify in the forecast period. The market is populated by a significant number of both global and domestic vendors. Global players, including Wyndham, Marriott Vacations Worldwide, Hilton, InterContinental Hotels Group, Disney, and Bluegreen Vacations Holding Corporation, are actively seeking to expand their market presence through profitable partnerships. On the other hand, domestic vendors focus on developing product and service portfolios that cater specifically to domestic needs. Key players in the market employ strategies such as product launches, mergers and acquisitions (M&As), and collaborations to gain a competitive edge. Mergers and acquisitions are common occurrences within the industry as companies aim to broaden their offerings and capabilities. In some cases, resources are allocated towards mergers rather than innovation when larger players collaborate. However, it should be noted that M&As in the market can be complex and involve various challenges.
Key companies profiled in this report include Wyndham, Marriott Vacations Worldwide, Hilton, InterContinental Hotels Group, Disney, Bluegreen Vacations Holding Corporation, Exploria Resorts, Breckenridge Grand Vacations, Westgate Resorts, VI Resorts, Somerpointe Resorts, Capital Vacations, Expectations Club, Royal Holiday, Raintree Vacation Club, Multi Resort Ownership Plan, Royal Aloha Vacation Club, Landex Resorts International.
Key Questions Answered
How large is the vacation ownership market in the United States?
The vacation ownership market in the United States was valued at USD 10.08 billion in 2022 and is projected to reach USD 15.32 billion by 2028.
What is the growth rate of the vacation ownership market in the United States?
The vacation ownership market in the United States is experiencing a compound annual growth rate (CAGR) of 7.22% from 2022 to 2028.
What are the emerging trends in the vacation ownership market in the United States?
The emerging trends in the vacation ownership market in the United States include high occupancy rates and the integration of virtual reality and augmented reality technologies in the vacation ownership industry.
Which region holds the largest market share in the vacation ownership market in the United States?
The Southern region holds the largest market share in the vacation ownership market in the United States, accounting for over 46% in 2022.
Who are the major players in the vacation ownership market in the United States?
The major players in the vacation ownership market in the United States are Wyndham, Marriott Vacations Worldwide, Hilton, InterContinental Hotels Group, Disney, and Bluegreen Vacations Holding Corporation.