In honor of celebrating the 40th anniversary of the Timeshare Industry in Aruba, a report was commissioned by the Aruba Timeshare Association, ATSA, to provide an overview of the island’s timeshare landscape from data collected in 2017. The report was commissioned in collaboration with Aruba Tourism Authority, ATA, and prepared by the University of Aruba, UA.
The following is the third article in a series of six, summarizing the study.
Timeshare motivations and Market Factor
The respondents in the current timeshare study are very satisfied with and loyal to their Aruba timeshare resorts. They use their timeshares and almost virtually never trade for other Caribbean or other global locations. Most of the respondents purchased their timeshare new (50.2%) and have 1 or 2 weeks (75.2%). The motives used to persuade them to acquire timeshare in Aruba were 1) Aruba as a destination and 2) The resort itself. The sales and marketing factors most likely to influence the respondents to purchase timeshare in Aruba were 1) Previous visits to Aruba and 2) Direct contact with the resort representative.
Timeshare Usage and Expenditure
In summary, the overall spend by the timeshare respondents was very good. It is important to note though that consistent with behavioral economics and consumer behavior research, visitors tend to overestimate expenditures by as much as 10-15%. The highest categories were food and beverage (both inside and outside resort), gambling and shopping. The areas that were lowest in expenditures were nature adventures, beach rentals, and cultural activities. Even sightseeing and tours were fairly negligible and would benefit the island if increased.
With an average party size of 3.28 and average length of stay of 12.5 days, there are opportunities for spend increases if Aruba works to determine weaknesses and capitalize on them. One thing to note is that the average maintenance fees on Aruba were $1,000 per week and that almost half of respondents paid an average of $753 in assessments and other fees over the past two years. The following section describes the direct and indirect economic impact of the timeshare industry on Aruba based on the self-reported spend of the respondents to the survey, along with the maintenance and other fees considered.
It is good to remember that the overall spend by timeshare owners or revenues from the timeshare industry is based on purchase price, maintenance and other fees, spend on food and beverages, gambling, shopping, activities (recreation, watersports, golf and others), car rental, groceries, and sightseeing. Direct spend would include timeshare costs, maintenance and other fees spent for the timeshare itself, as well as food and beverage monies spent at the resort itself.
Indirect spend would include all other monies spent while on Aruba to other businesses or entities that are providing products or services to the timeshare owners.
In assessing the gross economic value of the Aruban timeshare industry in 2017, it is conservatively projected at an estimated $530 million. This is equivalent to one-third of gross tourism earnings and almost 20% of nominal GDP projected for 2017 for Aruba, the equivalent of one-fifth of the Aruban gross domestic production.
More specifically, the Aruban timeshare industry generates directly an estimated $274 million, whereas indirectly its impact is estimated at $191 million, with a calculated induced impact of an additional $63 million.
When accounting for all factors the net added value of the Aruban timeshare industry is estimated conservatively at $387 million to Aruba.
A large number of industries on Aruba can feel the economic benefits of the timeshare industry such as: retail, restaurants, casinos, tours and sightseeing among others.
To conclude, the timeshare industry has a very positive economic impact on Aruba and adds value in many ways, both economically and through positive word of mouth due to the tie that these customers have to the island of Aruba.