Executive Summary by zhangyun

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									Executive Summary

C.A.R.E.
Cooperative Association of Resort Exchangers
Strategic Plan
2010

The Strategic Plan 2010 defines the direction of C.A.R.E. by
establishing its goals and objectives relative to the position of the
association within the vacation industry. It further sets forth the
strengths, weaknesses, opportunities, and threats confronting
C.A.R.E. as it seeks to sustain its vision and carry out its mission
of providing ethical and outstanding vacation services by providing
education and networking opportunities.

The plan provides an overview of the vacation industry focusing
primarily on the United States and includes summaries of global
economic factors, demographics and social trends, and industry
issues and competition. An analysis of the strengths, weaknesses,
opportunities and threats facing C.A.R.E. is followed by a
statement of goals, objectives, and strategies. The plan concludes
with the development of an action plan which sets forth specific
objectives and actions to be initiated and concluded throughout the
year.

Information for portions of this plan has been gleaned from various
industry resources and publications such as: ARDA State of the
Vacation Timeshare Industry: United States Study 2009, and
Ypartnership/Yankelovich, Inc. The plan is not intended as a
commentary on any individual C.A.R.E. member company, whose
practices and performance may vary from the information included
herein.
Global Economic Factors

The United States and much of the industrialized world have been
undergoing a recession since December 2007. The global
recession has resulted in a sharp drop in international trade, rising
unemployment, and slumping commodity prices. Economists
predict that recovery may not appear until 2011.

While debate continues regarding the origin of the global
recession, all countries have been affected, some more so than
others. Of the seven largest economies of the world by GDP, only
China and France avoided the recession. The US Federal Reserve
stated in June 2009 that “the pace of economic contraction is
slowing.” Conditions in financial markets have generally
improved in recent months. Household spending has shown signs
of stabilizing but remains constrained by high unemployment rates,
lower housing wealth, and tight credit. Economic projections
include a growth level of 2 to 3% in 2010, an unemployment
plateau of 10% and typical inflation of 1-2%. Tourism is
especially vulnerable to economic uncertainty and volatility as
travel and tourism involves a discretionary expense. People will
continue to travel although they will do so differently than they did
in favorable economic times. Tourism and hospitality businesses
that can adapt will not only survive but will thrive as the demand
for low cost and value priced products and services will likely
grow.

The credit crunch has severely impacted the timeshare industry. It
is predicted that sales will not pick up until credit markets thaw in
mid-2010 or later. Accordingly, timeshare developers have slowed
their sales efforts and increased their credit score and down
payment requirements. Sales of resort intervals have decreased by
12% as compared to the auto industry (13%) and new home sales
(38%). Resort occupancy was up 1.5% in 2008 while hotel
occupancy declined by nearly 3%. These slight yet encouraging
signs may be the result of the strength of the vacation industry.

Demographics and Social Trends

According to published reports 9 out of 10 active leisure travelers
are familiar with the concept of timeshare and 4% are interested in
purchasing a vacation in the next 2 years. Prospective vacation
purchasers are typically married, between the ages of 30 and 62,
and they rely heavily on the Internet for travel information and
reservations. Boomers are aging, Gen-Xers are moving in to their
peak earning years, and Gen-Y is entering their adult travel years.
Information indicates that the emphasis of today’s demographic
trends is still on the Baby Boomers, new trends are constantly
emerging. As a result of these dynamic trends opportunities and
threats exist for C.A.R.E. and its members.

Social trends drive the vacation industry. Forty-one percent of
U.S. respondents to a Trip Advisor survey said they intend to
spend more on leisure travel in 2010 than they did in 2009. Ninety
two percent said they plan to take or more leisure trips and 66%
said the economy will not affect their travel plans for the coming
year. However, leisure travel in 2010 will continue to be affected
by the recession as travelers will search for great deals and
bargains. Predicted top travel trends for 2010 include: value-added
budget options, Eco-travel, mixing business with pleasure, Latin
adventure travel, train travel, pet travel, family reunions, and
senior adventure travel. The Internet continues to be the number 1
source for booking and purchasing travel. In general the current
social climate dictates that 2010 will be the year of the bargain
hunter and that leisure products offering relaxation, fun and value
will continue to receive strong consumer support.
Industry Issues and Competition

The vacation industry has been positively impacted by the
expansion of major, high profile companies in the timeshare
industry and by the efforts of trade associations and the
development of new products and programs. However, a pressing
concern of the industry is the lack of available capital, primarily
receivable financing. Education throughout the financial markets
is paramount in order to eliminate or reduce the denial of loans.

Harnessing the Internet and making use of social media, viral
marketing, etc. are keys to businesses’ ability to communicate with
today’s consumers.

Economic challenges continue to affect consumer spending habits
requiring the public to reevaluate priorities. Developers, travel
clubs, and fulfillment companies are responding with increased
“drive-to” vacation destinations. Declining real estate values have
created long-term, cost effective opportunities for our industry to
create vacation ownership and fulfillment resources from
distressed properties.

Developers are seeking lower price point products as possible
vacation ownership options such as travel clubs. This scenario
may present itself as an opportunity for many C.A.R.E. member
companies. Travel club sales ensure a continued tour flow and
represent an introduction to the concept of vacation ownership.

With regard to industry regulation there will continue to be
scrutiny of industry sales and marketing practices and related
issues. Taxation authorities have begun levying taxes on rentals,
wholesales, and exchanges of condo resort inventory.
The entrance of resort developers in to the travel club environment
could have an impact on the availability of excess inventory.
Health concerns such as H1N1 virus, insecurity about the future,
and a glut of inventory due to foreclosures will necessitate the
development of new techniques for marketing and selling.
Industry analysts state that recovery may take up to 5 years.

Strengths, Weaknesses, Opportunities, Threats

Strengths: quality and quantity of resort offerings available through
C.A.R.E. members; knowledge base of membership; member’s
ability to adapt to changing economic environment; networking
and educational opportunities

Weaknesses: lack of recognition of C.A.R.E. within the industry;
failure to fully embrace current technologies; attrition and apathy
of members; negative effects of the economy on renewals and
conference participation.

Opportunities: continued need for direct and 3-way exchanges;
availability of excess inventory for rentals, wholesales and trades;
continued expansion of travel clubs and the resulting requirements
for fulfillment inventory; educational opportunities available to
members; expanding international membership.

Threats: stagnation of overall growth of membership; limited
public relations; unethical business practices; incorrect perceptions
regarding benefits of C.A.R.E. membership; lack of availability of
financing of club memberships and timeshare sales; lingering
negative perception among the general public and lenders; taxation
and industry regulation.
Goals, Objectives and Strategies

To achieve its goal C.A.R.E. proposes the following: enhance
exposure within the vacation industry, expand uses of technology
and awareness of C.A.R.E., provide and enhance members-only
benefits, raise awareness of the need to protect proprietary
information, provide education on industry changes and regulatory
issues. An action plan setting forth goals, timetables for
completion and resources has been established.

The Strategic Plan defines the direction of CARE by establishing
its goals and objectives with the intention of providing high quality
service to its members and maintaining the association’s proper
position within the vacation industry. Fundamentally the goal of
C.A.R.E. is to offer its members the tools to provide outstanding
vacation services and practice effective yield management through
information, education, and networking opportunities while
remaining committed to the highest standards and ethics.

								
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