Kaua‘i’s timeshare industry – the leader in the state with the most timeshare units on one island — will continue to grow and remain an economic asset for the island, a Hawai‘i and Mainland expert on the subject said yesterday.
Kaua‘i’s timeshare industry – the leader in the state with the most timeshare units on one island — will continue to grow and remain an economic asset for the island, a Hawai‘i and Mainland expert on the subject said yesterday.
Of the 5,735 units found at 74 resorts in Hawai‘i, 1,996 units are found on Kaua‘i, Howard C. Nusbaum and Mitch Imanaka told the Garden Island.
Nusbaum, president and chief executive officer of the American Resort Development Association (ARDA), and Imanaka, ARDA Hawaii chairman, said timeshare owners throughout the United States have aspirations of staying at a timeshare unit somewhere in Hawai‘i one day.
“Aging baby boomers (said to have the highest discretionary income of any generation of Americans) are hungry to buy into this market (timeshare industry in general),” Nusbaum said.
Nusbaum and Imanaka discussed the impact of the timeshare industry on the nation and on Hawai‘i during a meeting at the Waikiki Beach Marriott Resort and Spa on O‘ahu Thursday.
Nusbaum talked about the positive impact timeshare projects have had on communities, and how “states are realizing the value of the industry,” said Nathan Hokama, a contact person for the O‘ahu event.
Some legislators in Mainland communities have passed or have considered passing legislation that favors the timeshare industry because the industry pumps money into communities, Hokama said.
Hokama is under contract to Pacific Management Consultants Inc., a O‘ahu-based multidisciplinary marketing and communication specialist that is working with ARDA and KPMG LLP.
KPMG prepared “The 2004 Hawaii Timeshare Industry: Overview and Economic Impact Analysis.” It looks at how the industry has impacted Hawai‘i.
In Hawai‘i, new timeshare sales jumped an average of more than 23 percent yearly over the past five years, from $234.5 million in a 1999 to $538.9 million in 2003, according to the study, which was commissioned by the Hawai‘i chapter of the ARDA.
Of all the states, Florida is the number one leader in the timeshare resort industry, Nusbaum said.
“Florida has 25 percent of all the time share resorts in the country,” he said. Hawai‘i ranks fourth or fifth nationwide, thanks in part to the large number of units on Kaua‘i, followed by Maui, Nusbaum said.
“The product has served Kaua‘i well. Kaua‘i has spurred more interest in timeshare units in the rest of the state,” Nusbaum said.
From his point of view, Nusbaum contended the presence and use of timeshare units helped Kaua‘i’s visitor industry and economy rebound faster after the destruction of Hurricane ‘Iniki in 1992.
While hurricane-damaged hotels took a beating, timeshare owners from other parts of the nation still came to Kaua‘i, Nusbaum said.
“They came back to Kaua‘i because they had pre-paid accommodations, and they were going to come,” he said. “Traditional hotel guests would not come.” Following the terrorist attacks of Sept. 11, 2001, hotel occupancies in Hawai‘i dropped between 25 and 50 percent, Imanaka said.
At the same time, occupancy rates for timeshare units in Hawai‘i dropped by only 6 percent, he said. “We learned timeshare units were coming back after 911 and ‘Iniki,” Imanaka said.
Those staying at the Kaua‘i timeshare units have given a big economic boost to the island over the years, Nusbaum said. In 2003, expenditures by timeshare visitors to Kaua‘i totaled $406.1 million, he said.
Timesharing has existed in the United States since the 1970s, and the idea took hold on Kaua‘i in the early 1980s, Imanaka said.
“Kaua‘i had a lot of resort development in the 1970s and the early 1980s,” Imanaka said.
“A lot of products brought into the timeshare mix were condominiums, and they were not selling (due to lack of market demands), and developers looked at other methods for liquidating units, and one of them was timeshare units.” Kaua‘i has emerged as the leader in the timeshare business in Hawai‘i “because of creative developers who looked at ways of marketing the product,” Imanaka said.
Nusbaum said that Kaua‘i’s timeshare industry may have “been born by accident as a way to sell condominiums in a depressed real estate market, but today we are this viable vacation product.” Timeshare units are in demand today, and developers are making the push to build new ones, Imanaka said.
“The study indicates 70 percent of the new timeshare units are being built from the ground up,” he said.
Nusbaum said that every timeshare project that is being built today is being “finetuned” according to the taste and needs of a developer.
Currently, some hotel operators in Hawai‘i have converted hotel rooms into timeshare units to address the demand for such units.
The Kaua‘i Marriott Resort & Beach Club is an example of this new direction. In recent years, timeshare units were added to the hotel to reach a large segment of the visitor market.
When the property was operated as the Westin Hotel, that hotel offered only hotelroom accommodations.
The demand for timeshare units in Hawai‘i and in the United States is spiraling, Nusbaum said. “Many visitors want to stay in timeshare units.
Baby boomers want to travel with teen-agers, and older parents want their own suites.
They have privacy,” he said.
People also prefer timeshare units because they are equipped with kitchens, and people can save money by cooking their own meals, Nusbaum said.
Statewide, the “economic impact of this half-billion dollar industry on Hawai‘i is outpacing that of traditional visitors, and the growth of the industry is expected to continue,” according to a news release from Pacific Management Consultants Inc.
In 2003, Hawai‘i’s timeshare units and resorts attracted around 524,000 visitors to Hawai‘i, about 12 percent more than visitors who came to Hawai‘i for meetings, conventions and incentive trips.
The timeshare study noted that timeshare visitors spend about 44 percent more on each visit to Hawai‘i than do other visitors from the Mainland, accounting for more than $627 million in “direct expenditure” statewide.
Indirect expenditures and the “multiplier effect for induced expenditures” raised total spending by timeshare users to $1.1 billion yearly, the study showed.
The revenues generated from the timeshare industry is good for the state, the survey indicated.
State tax revenues totaled an estimated $81.8 million last year, and $18.1 million tax revenues for the four counties in Hawai‘i, the study noted.
The timeshare industry also provided more than 4,000 fulltime jobs last year. Direct wages accounted for $105.6 million last year.
Lester Chang, staff writer, can be reached at 245-3681 (ext. 225) and lchang@pulitzer.net
