SHARE OPTION A 9,000-sq.-foot lakehouse in Michigan, one of the offerings in the Inspirato portfolio. Photo: Inspirato By Debra Kamin
EARLIER THIS fall, Devin Florez, who lives in St. Louis, took his 8-year-old niece to Disney World. He felt safe heading to the park, he said, knowing both he and his niece would be masked, most of their time would be spent outdoors and they would be able to maintain social distancing. But with Covid-19 raging, he worried about booking nights at a hotel, where they’d encounter any number of other guests and staff. When first planning the trip, Mr. Florez, 34, began browsing Airbnb s in Orlando, but costs were high. Then he saw a promo on the Points Guy, a blog focused on travel-club loyalty points, for $150 off bookings with Koala, a new platform that follows Airbnb’s model but allows individuals to rent one-time stays in timeshares that would otherwise sit unused.
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Through Koala, Mr. Florez booked a week stay in a two-bedroom condo that put him within minutes of Disney World and came with amenities like a swimming pool and concierge. Thanks to the Points Guy promo, the cost was a mere $475, or about $68 a night.
“ D. Alexander homes operate like hotels, with perks like wine and Malin+Goetz skincare products. ”
Covid-19 has battered the travel industry. One-third of American hotels face potential bankruptcy. U.S. air traffic has stalled—in October, U.S. airlines carried 62% fewer passengers than the same month last year. But one sector of the industry continues to grow and is actually thriving in the face of the pandemic: the stodgy old timeshare industry.
Traditional timeshares—vacation rentals where ownership is split among several parties—took root in the 1960s. The Hilton Hale Kaanapali, a 253-room condo hotel on Maui, was among the first. Advertised as a “whale of a place to play,” it opened in 1966, with studios priced from $26,000 that could be booked for a maximum of 30 days a year. The timeshare model started popping up in all the usual vacation spots as eager developers lured potential buyers to sales presentations with free toasters and discount helicopter tours. The bait paid off. According to the American Resort Development Association (ARDA), there are currently more than 5,000 timeshare resorts in 121 countries.
In early 2020, fear and lockdowns kept customers away from traditional hotels and rental properties. But because timeshares are like second homes for their owners, they didn’t experience the same extreme drop-off, even at the height of coronavirus lockdowns in spring 2020. “Once regulations began to be lifted in July, some places saw occupancies of 100%,” said Jason Gamel, president and CEO of the ARDA.
According to Mike Kennedy, Koala’s CEO, the timeshare industry has evolved very little since the 1970s. Many owners find it difficult to exit, and at any given time, a sizable chunk of the sector consists of empty rooms. He launched Koala in August as a way to bridge the gap between short-term rentals in desirable destinations—a hot commodity thanks to Airbnb—and the bounty of timeshare units.
Koala is one of a handful of startups targeting millennials, rethinking the timeshare model for a tech-obsessed generation raised in a sharing economy. There’s D. Alexander, which owns a collection of homes that it operates like hotels with flat-rate packages that include perks like wine and Malin+Goetz skincare products. Pacaso, launched in October by Zillow co-founder Spencer Rascoff, lets you buy a second home by joining forces with up to eight buyers via an LLC designed for co-ownership. Even RV companies have gotten into the mix: Texino, a Los Angeles-based camper-van designer, has its own share platform which lets owners collect 50% of rental profits and avoid dealing with the headaches of parking or maintaining their vehicle when they’re not using it.
Travel clubs like Inspirato offer multiple subscription-based models: Inspirato Club charges people $600 a month to access the site’s curated portfolio of homes, hotels and experiences (the average nightly rate for bookings runs around $1,400). Inspirato Pass will set you back $2,500 a month for nearly unlimited bookings.
Inspirato CEO Brent Handler, who likens the company’s subscription-based model to fashion company Rent the Runway, says it makes more sense to younger generations than the fixed payments and rigid schedules of a traditional timeshare. “Millennials in particular don’t understand having to wait for something,” he said. “They want food and they call DoorDash. If they want a car, they don’t order a rental car, they hire an Uber or a Lyft. We’re just scratching that itch.”
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