AIF Tool Kit www.ardafoundation.org/AIFToolkit This PowerPoint presentation is provided by the ARDA International Foundation for use in addressing those entities and individuals who need reliable, current statistical data about the timeshare industry in the U.S. The statistics contained in this presentation are drawn from respected sources of research, much of it commissioned by the AIF. These statistics may not be altered unless they are substituted with updated information from AIF certified sources. You should make a copy of this presentation now and store as your master reference version for the future. When addressing specific audiences in your region, state or municipality, it may be desirable and effective to include data that reflects consumer and economic patterns in your locality. To attain such data, contact the AIF directly and request that we work with you in developing reliable data for you to use in support of timeshare development in your region. You may also check the AIF web site for updated information on a regular basis by going to this web site: www.ardafoundation.org/AIFToolkit Remember to DELETE THIS PAGE when preparing your own presentations.

The American Resort Development Association or ARDA is a Washington DC based trade association representing all segments of the shared vacation ownership industry including timeshare, fractional and private residence clubs. Timeshare owners and their well-being are served through the ARDA Resort Owner Coalition or ARDA ROC. It is the mission of the American Resort Development Association to foster and promote the growth of the industry and to serve its members through legislative advocacy; public relations and communications; membership development and ethics enforcement. Research and education programs are provided through the ARDA International Foundation (AIF), who also developed the program we are presenting to you today. www.arda.org Produced in cooperation with the ARDA International Foundation

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What is Timeshare/ Vacation Ownership? Investment in a Lifestyle Benefits of Real Estate Ownership Buying a timeshare is an investment in a lifestyle. It brings the benefits of real estate ownership without the headaches. And it opens a universe of possibilities for vacations that simply did not exist to consumers even a decade ago. Today’s vacation ownership product is diverse. The product has developed in response to the unique vacation dreams of the consumer, and to the realities of their budgetary limits. This has driven the timeshare industry to create a broad range of products to fit those individual choices. While the timeshare industry offers a broad variety of products, the three major product categories are: Timeshare Fractional Private Residence Club All of these products are identified by the legal and regulatory industries as timeshare. They all provide the owner with a vacation lifestyle combined with the benefits afforded through real estate ownership. What differentiates the products are: Unit size Resort size Amount of time of annual occupancy Amenities Service Prices Manner in which these products are marketed and sold

Evolution of Timeshare Consumer Protection/ Regulation Fractionals/PRC International Exchange Floating Week Points Fixed Week, Fixed Unit Hotel Brands To help understand how the timeshare product has developed, let’s look at some of the most significant industry developments: The product came from Europe to the US in the late 1960s Early resorts were converted whole owner resorts and hotels. The product sold was a fixed week, fixed unit. The exchange product, introduced to the industry in 1974 by RCI, brought much demanded flexibility to the product, resulting in rapid industry growth. Additional product flexibility was introduced via the floating concept – first time then inventory. Marriott entered the industry in 1984. The entrance of the first major hotel brand improved the image of the industry. Desiring to overcome the negative image of the industry that was being created by overzealous timeshare sales and marketers, the industry developed a Uniform Timeshare Act and the ARDA Code of Ethics. To give timeshare owners a legislative voice, ARDA ROC was formed in 1989. In spite of an industry slowdown at the end of the 80s caused by a worldwide recession, the industry surpassed the one million mark in number of owners. The 1990s were dominated by the entrance of additional hospitality and hotel brands including Hilton, Disney, Hyatt and Starwood. The entrance of brands combined with increasing consumer demand led to improved product and service level standards. Vacation lifestyles changed driving change in the timeshare industry. Thus the rebirth of club products, flexible point-based programs and fractionals drove industry growth in the final years of the millennium. By the close of the decade annual vacation exchange had exceeded two million and timeshare had spread to six continents. The first decade of the 21st century has been dominated by consolidation, September 11, and consumer demand for luxury spurring continued growth of fractional and PRC products. Today pressures on industry have never been greater – the impact of the War in Iraq, the unpopularity of the US throughout the world, the collapse of the housing industry, Congress’ reaction to predatory lending and the proclivity of state and local governments taxing the visitor to raise revenues and baby boomers reaching retirement – through it all the timeshare industry will continue to offer a wide variety of great vacations and an opportunity for consumers to own the fun. 1970s 2000s

Timeshare a Global Village While today’s industry has been shaped by U.S. companies, the timeshare industry actually got its start in Europe in the 1960s. Today timeshare resorts are located in more than 120 countries. The ability to exchange a timeshare in one country for one in another country, has been a major factor in the growth of the industry worldwide. Just as ARDA had an important role in fostering the growth of the US timeshare industry, sister organizations are working to create growth environments throughout the world. These organizations include: ATHOC (Australian Timeshare & Holiday Ownership Council) CARDA (Canadian Resort Development Association) LADETUR (Latin American) AMDETUR (Mexico) OTE (Organization for Timeshare in Europe) AIRDA (All India Resort Development Association) GATE (Global Alliance for Timeshare Executives)

Timeshare in the US Weekly Product vs. Points Points = Vacation Currency Timeshare has advanced from the purchase of a single week to the use of timeshare points as vacation currency. The weekly unit guaranteed accommodations for a vacation. Points can be used not only for timeshare accommodations but for other services like air travel, car rentals, hotel stays, restaurants and even cruise liners. Today, many timeshare companies use points in some manner. They extend the flexibility of the purchase for the owner and also increase the competition among developers to provide more value in their offerings. Weekly Product = Accommodations

Timeshare in the US $6.4 Billion Annual Sales 2000 2010 Let’s look specifically at the U.S. timeshare industry today. In most of this presentation, we’ll be sharing information about traditional timeshare products. Although I do have some additional data about fractional and PRC resorts to share.. Traditional timeshare sales volume was $6.4 billion in 2010. The combined fractional and PRC sales volume was $349 million bringing total new sales for the shared ownership industry to $6.75 billion. Since its inception in the 1970s through 2008, timeshare enjoyed a history of steady growth in virtually every community where it’s been introduced. Unfortunately as credit markets froze and the ability to fund new sales diminished, timeshare developers were forced to reduce their sales efforts by as much as 40%. 2000 2010 SOURCE: 2011 State of the Vacation Timeshare Industry: United States study, Ernst & Young for ARDA International Foundation

Timeshare in the US 1,548 Timeshare Resorts 197,668 Units 2009 Based on a study conducted by Ernst & Young and released by the ARDA International Foundation, key industry measurements include: Resorts – 1,548 Located in 47 States Total Units – 197,668 Average resort size is 128units Average Interval Price - $19,308 Points Equivalent to one week - $19,921 Weeks - $14,744 At year end 2009, 7.3% of US households owned a timeshare interest. SOURCE: 2011 State of the Vacation Timeshare Industry: United States study, Ernst & Young for ARDA International Foundation

Timeshare in the US Leading States Florida 23% 362 California 8% 130 NUMBER OF RESORTS Florida 23% 362 California 8% 130 South Carolina 7% 106 Hawaii 6% 93 Colorado 5% 76 Nevada 4% 58 Texas 3% 52 Missouri 3% 49 North Carolina 3% 49 Arizona 3% 48 This screen shows the 10 states with the most timeshare resorts. Florida leads the way with 362 resorts representing 23% of all US timeshare resorts. It’s not surprising that this list reflects the pattern of the most popular travel destinations in the United States. Timeshare is responding to the needs of consumers along with the rest of the travel and tourism industry. 2011 State of the Vacation Timeshare Industry: United States study, Ernst & Young for ARDA International Foundation

Fractional and PRC Alternative to Traditional Timeshare 201 Fractional and Private Residence Club Resorts Combined Sales Volume: $349 Million Fractionals and Private Residence Clubs, or PRCs, are an upscale version of timeshare. They feature the purchase and use of extended time periods, and offer amenities comparable to luxuriant hotels. Although this is a relatively small segment of the industry in terms of the number of owners, percentage wise it is growing very rapidly. Fractional and PRC 150 Fractional resorts 51 Private Residence Club resorts: 201 Total Fractional and PRC resorts Resorts located in 32 States Top 6 States: Colorado – 38 – 18.9% California – 23 – 11.4% Oregon – 13 – 6.5% South Carolina – 13 – 6.5% Michigan – 12 – 6.0% Vermont – 10 – 5.0% Fractional Sales Volume - $107 million Private Residence Clubs Sales Volume - $ 242 million Total sales volume - $349 million SOURCE:The Shared Ownership Resort Real Estate Industry in North America: 2011 prepared by Ragatz Associates

$1,574 Average Spending per Trip 73% Spending Outside Resort Timeshare in the US Economic Benefit We have looked at the industry in terms of size – resorts, units, owners and sales volume. Now let’s look at timeshare owners. Timeshare owners make great visitors for the local economies they visit. Average spending per trip is $1,574 73% of this spending is spent in the local community. The average timeshare traveling party is 3.3 people. They stay for an average of 7 nights per trip in the resort area. Because timeshare owners have prepaid for their accommodations, they have more money to spend while on vacation. Obviously all this consumer spending also creates jobs in local economies. $1,574 Average Spending per Trip 73% Spending Outside Resort SOURCE:Economic Impact of the Timeshare Industry on the U.S. Economy, 2010 Edition, prepared by Ernst & Young for AIF

$22.1 Billion in Salaries/Wages Timeshare in the US Economic Contribution 465,803 Full & Part-Time Jobs $22.1 Billion in Salaries/Wages $8.3 Billion in Federal & State Taxes Which leads us to look at the combined impact that timeshare has on local economies across the country. In 2009, timeshare accounted for nearly 466,00 jobs across the country. These were jobs for people directly involved in the industry and for all the jobs created through consumer spending by the owners during their vacations. This accounted for $22.1 billion in salaries and wages. And happily provided $8.3 billion in federal and state taxes. SOURCE:Economic Impact of the Timeshare Industry on the U.S. Economy, 2010 Edition, prepared by Ernst & Young for AIF

Insert Local Stats In this slide, insert any statistical data that may pertain to your specific locale if available. This could be number of resorts, owners, annual visits, etc. You may want to add multiple slides here. Look in the appendix for data on AZ, CA, FL, HI, NV, SC, and TN. You can also get help from ARDA International Foundation in acquiring and preparing statistics for your region.Contact them at www.ardafoundation.org/AIFToolkit

Who Owns Timeshare? Mean Age 52.2 80% Married/Partnership No Children Under 18 Median Income $78,400 61% College Graduate/ Professional Degree We’ve talked about consumer spending – so let’s take a closer look at these timeshare owners. The average timeshare owner is 52.2. 80% married or in a committed partnership The majority of them are married with no children under 18 living at home. Their median income is $78,400 61% have a graduate or professional degree. SOURCE: Shared Vacation ownership Owners Report, 2010 Edition prepared by The Research Intelligence Group for the AIF

Aspirational Items of Americans The Top 10 58% Own a Vacation Home Stay in a Luxury Hotel 44% Beautifully Decorated Home 38% Own an Expensive Car 38% Travel Abroad 38% Eat at an Expensive Restaurant 37% Own Your Own Business 34% Something worth noting here. In a general survey of aspirations of Americans, what they want most in their lives, owning a vacation home was at the top of the list. In fact most of the top ten items related to travel and vacationing. Obviously, this is a major factor in the success of timeshare: we’re providing the items Americans want most in their lives. Fly First Class 33% Own Latest Technology 26% Own Expensive Jewelry 25% SOURCE: 2005 Roper Reports Annual Presentation

Boomers Leading the Way 76 Million Approaching Retirement 77% More Adventurous than Parents 72% Took Leisure Trip in the Past Year Another factor in timeshare’s success is its appeal to our largest target market. It’s no surprise that Baby Boomers are leading the way for growth in timeshare. Nearly 76 million boomers will be retiring in the coming years and we can be the perfect host as they enjoy more leisure time This is a generation that values their leisure time: 72% took at least one leisure trip in the last year, 77% consider their travel behavior as more adventurous than their parents. This will be a new generation of retiree’s that seek more for their retirement. SOURCE: 2005 Travel & Adventure Report, A sampler of Boomers’ Travel & Adventure Experiences by AARP

Travel with larger parties Why Do They Own? Affordable terms Internal exchange Travel with larger parties Save money on future vacations When asked what is the most important factor in continuing to own their timeshare, the most frequent responses were: Affordable terms Internal exchange Ability to travel with large parties of family and friends Timeshare will help save money on future vacations Use of an external exchange company – offering the opportunity to stay at resorts around the world External exchange SOURCE: Timeshare Owners Report, 2009 Edition prepared by Penn Schoen Bertrand, Inc. for the ARDA International Foundation SOURCE: Shared Vacation Ownership Report, 2010 Edition prepared by The Research Intelligence Group, for the AIF

Consumer Satisfaction Satisfaction is the Highest Endorsement And here is a statement that really makes the industry proud: Owners love their timeshares When asked how they feel about their timeshare, 84% rated their vacation ownership experience good to excellent. This is a statistic that has held consistently for more than a decade. And they don’t stop at just feeling good about their timeshares: they buy more of them. In 2010, 59.9% of all new timeshare sales were made to consumers who already owned a timeshare. SOURCE: Timeshare Owners Report, 2010 Edition prepared by The Research Intelligence Group, for the AIF

Value to Consumers 76% 75% 71% 70% 70% Vacation home away from home Spend time w/people important in my life 75% 71% Include those who cannot afford vacations Vacation in new areas 70% After experiencing the ownership of a timeshare, consumers begin to develop value beyond the flexibility and quality that led to their initial purchase. You can tell by these categories that timesharing opens something significant in the lives of owners. From the pure joy of the vacation to a more profound connection to their families and their own health, these sentiments are reported to be part of the benefits of owning timeshare. Makes vacation planning easier 70% SOURCE: Shared Vacation Ownership Owners Report, 2010 Edition prepared by The Research Intelligence Group for the AIF

ARDA ROC Advocacy organization for timeshare owners Over 1 million members and growing Responds to government at Federal, State and Local levels The ARDA Resort Owners Coalition, or ARDA ROC, is a political action group, entirely supported by individual timeshare owners. Its sole purpose is to preserve, protect, and enhance vacation ownership for individual timeshare owners.  ARDA ROC was started in 1989, and today, it has more than one million timeshare owners.   ARDA ROC responds to legislative issues where the interests of timeshare owners are being affected -- at all levels of government (federal, state, local) In just about every state legislature or county council or other government body, some type of regulation is being considered for the timeshare industry.  Most timeshare owners live in a state other than the one where their timeshare is being regulated. So, they need a voice that protects their interests. ARDA ROC gives them that voice. ARDA ROC is unique not just to the timeshare industry but to consumer protection in general, It underscores the commitment that the industry has to protecting the consumer while they are advancing the growth of timeshare.

Timeshare into the Future Matches American Aspirations Proven Benefit to Local Economies Appeals to Diverse Market Segments High Approval Ratings Flexible and Satisfying Experience Part of an International Market So we think the key factors in timeshare’s success overall up to this point will continue well into the future. Timeshare matches up well with the general aspirations of Americans: they like to vacation and love to travel. Timeshare has proven to deliver measurable and escalating benefits to local economies. It matches up extremely well with the Baby Boomers, but timeshare appeals to an increasingly diverse market. Owners give high approval ratings on their timeshares, over 80% for many years now. They say it’s a satisfying experience and they value its flexibility and quality. And timeshare is part of an international industry, allowing owners to exchange for experiences all over the world. We think as long as Americans anywhere are looking for a way to create vacation memories, timeshare will continue to be a mainstream choice for making those dreams come true. And that will enable us to continue to play the roles we play in the communities where we’re located.

There is a wealth of information located at ARDA’s web site There is a wealth of information located at ARDA’s web site. And of course we’re happy to provide whatever other information you may need from us as well. Thank you for your time and interest. QUESTIONS?: BE SURE YOU ARE PREPARED TO ANSWER QUESTIONS BEFORE YOU INVITE THEM. www.arda.org