Independent timeshare resorts: Mounting challenges and solutions
By Shep Altshuler, Publisher
In a recent interview with TimeSharing Today, Shep Altshuler, Publisher, was joined by Jerry Rexroad, Co-President of Capital Vacations. During the conversation, Rexroad provided detailed insights into the current challenges facing independent timeshare resorts, the shifting expectations of owners, and how Capital Vacations is helping resorts navigate these changes.
Insights
Rexroad’s background is a key factor in his understanding of the financial and operational challenges that many independent timeshare resorts face. Prior to joining Capital Vacations, Rexroad’s started his career in public accounting at KPMG, where he became a partner specializing in financial services and worked with large-scale operations.
He then transitioned into the banking industry, holding executive roles such as Chief Financial Officer and CEO of CresCom Bank, where under his leadership the bank grew to over $5 Billion and over 70 branches in the Carolinas until it was sold to United Bank in 2019. Rexroad then joined the United Bank Executive Team.
After the sale, in 2023 Rexroad sought new opportunities and, through his relationship with Capital Vacations’ Founder and CEO Jason Shroff, joined the company as Chief Financial Officer and within six months was promoted to Co-President, where he currently oversees finance, treasury, and certian operational areas for the company, helping to drive its significant expansion, resulting from the acquisition of Vacation Resorts International (VRI) in 2022, which brought Capital Vacations managed resort portfolio to over 200 independent resorts.
Legacy timeshare resorts in the current market
Rexroad emphasized that independent timeshare resorts are at a crossroads. While these resort owners have deep emotional connections to the properties, the resorts are facing difficult challenges.
The costs of maintaining or upgrading these resorts are rising, and the expectations of vacationers have changed dramatically in recent years. Many legacy resorts by themselves, Rexroad noted, are struggling to compete with newer resorts that offer modern amenities and more flexible vacation models.
“Independent resorts have a rich history and a lot of heart, but they face unique challenges that newer properties do not,” Rexroad said. “Without proactive management and forward-thinking strategies, these resorts risk falling behind in today’s fast-changing market.”
Financial strain on aging properties
A pressing challenge facing legacy resorts is the increasing financial burden of maintaining an aging infrastructure resulting from deferred maintenance issues, and the costs to keep these properties in good condition. Structural repairs, roof replacements, and essential upgrades like elevators or HVAC systems are just a few examples that have escalated in recent years.
These financial challenges are further compounded by weather-related events such as hurricanes, flooding, and freezing rain, which can add to the already heavy financial load.
Rexroad noted that in some cases independent resorts have inadequate reserve funds to handle these expenses, leaving them vulnerable to financial instability. “In many cases, resorts are improperly prepared for the long-term maintenance costs associated with major repairs due to insufficient reserves thus creating a financial burden for both the resort and the owners,” he explained.
Capital Vacations is focused on working closely with independent resort boards to develop long-term financial plans that can help ensure resorts are adequately funded for future needs. “Our value-add offerings and services allow for resorts to build strong reserve funds and proactive maintenance plans, so resorts can meet these challenges head-on without passing on excessive costs to owners.
Any company can help a board run a playbook, we differentiate ourselves by showing up and collaboratively working with the board to write a playbook for what is needed,” Rexroad emphasized.
Changing consumer expectations
Rexroad also noted that Capital Vacations is focused on solving the shifting landscape of consumer expectations in the timeshare industry. The traditional fixed-week ownership model that many independent resorts operate under is becoming less appealing to modern vacationers, who increasingly seek flexibility in their travel plans.
Today’s travelers desire more in terms of where and when they vacation, and they prefer ownership models that give them more control over their experience. “The fixed-week model that many independent resorts use doesn’t fit with how people travel today,” Rexroad noted. “People are looking for more flexibility to choose when and where they vacation, as well as the ability to visit different resorts, not just the same one year after year.”
To address this trend, Capital Vacations offers a solution that helps transition resorts from a fixed-week models to points-based systems, giving owners the greater flexibility they desire. These systems allow owners to book vacations at different resorts within the Capital Vacations network and beyond, giving them more options to fit their changing lifestyles.
“Flexibility is key to attracting new owners and retaining existing ones,” Rexroad said. “By transitioning to a points-based systems, legacy resorts are able to offer the kind of flexibility that today’s travelers require. More travel options allows the resort to be more competitive in the marketplace.”
The importance of professional management
For many independent resorts, one of the biggest challenges is finding the right management team to guide them through these changing times. Many independent resorts are overseen by diligent and caring owners who volunteer their time but often lack the expertise necessary to manage the complexities of resort operations, especially as costs rise and industry standards shift.
“Being on an HOA board is a volunteer position, and it’s often a thankless job. Board members are asked to make major decisions that affect the future of the resort, but they don’t always have the resources to handle these challenges effectively,” Rexroad explained.That’s where professional management companies like Capital Vacations can make a difference.
“We provide the expertise and resources that independent resorts need to thrive,” Rexroad said. Capital Vacations offers a comprehensive suite of services, including financial management, sales, marketing, operations, and owner engagement, all tailored to the unique needs of each resort.
Rexroad emphasized that a strong partnership between the management company and the board is essential for long-term success. “Collaboration is key. We work closely with boards to develop strategies that are in the best interest of both the resort and the owners.”
Regional challenges and tailored solutions
One of the complexities of managing a diverse portfolio of independent resorts is addressing the unique challenges that vary by region. Rexroad shared examples of how resorts across the country are dealing with very different issues.
A resort in Lake Tahoe, for example, recently spent over $120,000 on snow removal, while a resort in Daytona Beach faced the financial impact of a seawall collapse. In contrast, properties in Maui are contending with the aftermath of the Lahaina fires. Whereas, resorts in New England face a different kind of struggle, finding seasonal workers to manage housekeeping.
To address these diverse needs, Capital Vacations draws on the expertise of a highly experienced leadership team. Rexroad credited Gary Hyde, who leads their hospitality division with 40 years of experience, for helping resorts tackle these region-specific issues. “It’s not easy managing such a diversified client base, but having seasoned professionals makes all the difference,” Rexroad said. “We are also fortunate to have the financial resources to step in and assist resorts when needed.”
Repurposing and the future of legacy resorts
Rexroad also touched on the growing trend of repurposing independent resorts, where resorts are converted into wholly owned condominiums or other real estate ventures. Many resorts are exploring this option as a way to remain financially viable, especially when faced with escalating costs and aging owner demographics of some of the resorts most loyal owners.
“Repurposing as a concept is becoming more common; however, it is extremely difficult and time-consuming. It is important to provide owners who want to continue to experience the benefits of vacation ownership the opportunity to do such. All too often we see third parties that are only focused on financial gain, Rexroad cautioned.
Capital Vacations is actively involved in helping resorts repurpose their properties, but Rexroad emphasized that Capital Vacations works to ensure owners have options. “We don’t just go in and repurpose the entire property,” he explained.
“We offer owners choices, whether it’s trading their week for ownership at another resort or joining a club that allows them to continue vacationing in a way that suits their lifestyle. Our process is all-inclusive and given our business model this is a service we offer not as our sole profit-generator unlike others.”
Facing the future with confidence
As the interview concluded, Rexroad emphasized the importance of adaptability in ensuring the long-term success of independent resorts. “The timeshare industry has changed, and independent resorts need to change with it,” he said. “With the right management, financial planning, and a commitment to modernization, these resorts can continue to thrive.”
About Capital Vacations
Capital Vacations is helping independent resorts across the country navigate these challenges, ensuring they remain competitive and provide the exceptional vacation experiences that owners expect. learnmore@capitalvacations.com.