This industry innovator generates consumer programs designed to make timeshare the best time for leisure
If you've ever stayed at a timeshare resort, chances are you were a guest of an RCI-affiliated property. Seven out of every 10 timeshare resorts worldwide are affiliated with RCI, and eight out of every 10 vacation exchanges are being fulfilled by RCI. As the only single-source provider of integrated services in the industry, Indianapolis-based Resort Condominiums International Inc. (RCI) and its group of businesses have redefined the timeshare concept with the vacation exchange program.
RCI has aggressively pursued industry growth in all three segments of the timeshare marketplace - luxury, upscale and value. RCI has more premium-quality resorts than any other timeshare provider worldwide. In 1974, RCI invented the concept of the timeshare vacation exchange - trading accommodations at one timeshare resort for comparable accommodations at another resort. Historically, exchange has been one of the primary motivations for purchasing a vacation ownership week, generating broad appeal for the timeshare product and the entire industry.
With more than 3,200 affiliated resorts located in 90 countries, this timeshare leader is the top exchange provider for the industry. On a global basis, RCI provides vacation exchanges and travel services for more than 2.4 million member families, who are timeshare owners at RCI-affiliated resorts. Through its worldwide network, the firm arranged more than 1.8 million exchanges in 1997, sending some 6.5 million people on vacation and raising the company's revenue to $355 million last year.
RCI's affiliated partners receive integrated software systems, resort management and consulting services from RCI's internal business arms. These business services include Resort Computer Corp. (RCC) and RCI Consulting. RCC develops, installs and services customized software systems for the international timeshare andindustries. RCC Premier is the timeshare software management tool available to all RCI affiliates.
"We have made significantin technology, and we have the premier technology that is used by the timeshare industry with respect to resort operations and reservations," says Steve Miller, CEO of RCI. "RCC is another illustration of how we're leading the market, because we have the best technology that exists for a developer community. We look at what the critical needs of our affiliates are, and we put those first. And most of all, how do we become a part of the solution when there is a problem to be solved. So, we're very interested in continuing to cultivate the affiliates into the RCI group of resort developers."
RCI Consulting also establishes comprehensive timeshare services for affiliated resort developers, marketers, owner/operators and industry newcomers. The firm offers services through RCI Travel Inc. and RCI Management Inc., both internal service arms delivering exclusive travel services, resort operations, hospitality and property management services to the timeshare industry.
In December 1997, RCI was acquired by the Cendant Corp. (NYSE:CD), the leading franchisor of hotels and rental cars worldwide for travel services. At year-end 1997, Cendant had reported revenues of $5.3 billion, an increase of 36% over the previous year's $3.9 billion. RCI is a significant part of this consumer and business services conglomerate due to its market strength.
"Consistent throughout my entire time with RCI has been our desire and execution to deliver services around the world. One way that we stayed ahead of the competition and continue to do so is we establish operations in the best markets worldwide," says Miller. "We found it a highly successful strategy to make the investment in many local marketplaces around the world to grow the timeshare philosophy and, of course, to have RCI grow along side of it."
Growth is consistent in the timeshare business. According to the World Travel and Tourism Counsel, $766 billion was invested in the timeshare industry in 1996, and a projected $1.6 trillion is anticipated by the year 2006. To keep up with this growth, RCI will add two new programs - RCI Lead Generation Services and RCI Club Services in spring 1998. The first is designed to reach the right consumers with the timeshare message. The second is aimed at providing flexible options that are critical to selling and servicing timeshare programs.
"Our membership will grow 8% to 10% annually and we have a lot of members that own multiple weeks, so with respect to industry growth, part of that is the factor of multiple ownerships," says Miller. "On a net basis, our growth includes both new and renewal memberships, so it's a strong percentage within our industry. We make money in the membership process and transaction fees charged for an exchange. We also offer travel services to our members that generate income. Being part of Cendant, there are other products and services we are making available to our members that will produce a revenue source. Most of our money is made by selling memberships. We will grow with all our members and we have new affiliates in the area of high-end hospitality - Westin and Hilton in particular."
"As Westin gets into the timeshare business, they're using RCI for many support services. We have partnered up with Westin and we have other affiliated hospitality groups, such as Sun International," adds Miller. "The hotel groups have come to realize that the timeshare business is a good business for them to be in. We provide services that are beneficial to those affiliate groups, such as market research and the exchange service for their owners."
Today, hotel companies fit well into the timeshare ownership concept, and RCI has acted upon this natural relationship. "Vacation ownership for timeshare is seen not as a competitive product, but as a complementing product to existing hospitality facilities. What this does is add another dimension of hospitality service on a permanent long-term basis," says Ron E. Jackson, president and COO at RCI. "We're in a business of providing another level of guest satisfaction. Our industry automatically adds the family component to the vacation experience. Many hotel owners have a real, sincere interest in looking at vacation ownership for timeshare as a complementing product to their hotels. We are currently working with a five-star hotel chain that will lead the industry at the high-end level of timeshare and hospitality working together. Presently, there is a concept being developed called Star Resorts that is the equivalent of a resort location with the Ritz-Carlton experience."
RCI is expanding into new markets with the completion of the Cendant merger last December, and it will continue to develop new relationships.
"We have a 70% market share of the exchange business worldwide in terms of resorts. We bring potential developers together and evaluate what they need to compete in this business, and then we offer them services that complement their needs, if it's sales management, marketing or technology," says R. John Cully, national vice president of resort sales.
"We're at a very critical point in the industry right now," he continues. "What has been missing until now is branded marketing, where at the point-of-sale someone represents integrity, and that's why I think a Westin or Hilton is so important. Brands have a reputation of standing by their product, and today people can see the types of developers that are involved, and brand names are a natural extension of this business. This is a mature business now, and it's an ongoing viable business that did more than $6 billion in global sales last year with more to come."