'Vacation Rental Ready' – a new type of Time Share?

In desirable vacation areas, today’s traveler has a plethora of traditional and new lodging options to choose from. Hotels, time shares, vacation rentals, cabins and lodges are just a few of many choices the consumer looks at on their smart phone or computer prior to booking online. Their budget, available time, area recreational activities, transportation access, hospitality services – all are factors in helping choose that special spot to enjoy a vacation or gathering with family, friends, and groups.

Ouray has proven to be a very desirable location for vacationers and special events attendees, with a variety of lodging options available in the area. Would a new option, such as a vacation rental-ready, luxury townhome community find a spot in Ouray’s market? We think so. What about a corporate time-share property? Same answer – we think so.

Surprisingly, a resort time-share option has yet to hit Ouray’s lodging inventory. For the consumer unfamiliar with time-shares, it may come as a surprise that this decades old hospitality classification is still strong, popular, and growing in 2018 … “Eight years of consecutive growth attests to timeshare’s unique value proposition for vacationers,” said Howard Nusbaum, president and CEO of the American Resort Development Association (ARDA). “Timeshare offers more space and privacy for the whole family, tremendous use-value over time, and over 5,300 resorts worldwide to choose from, coupled with the health benefits of vacationing on a regular basis. This is a product and industry positioned to provide incredible vacation experiences well into the future.”

Sales volume rose from $9.2 billion in 2016 to $9.6 billion in 2017, nearly a four percent increase and more than a 26 percent increase since 2013. Average occupancy rate was more than 81 percent in 2017, compared to the 65 percent average hotel occupancy rate. This higher occupancy rate extends benefits beyond the resort itself and into the local surrounding markets and communities with spending at local restaurants, purchasing groceries for the fully-equipped in-unit kitchen, purchasing gas for rental cars, participating in recreational venues, etc.

There were 1,570 timeshare resorts in the United States in 2017, representing approximately 205,100 units. About 72 percent of timeshare units are two bedrooms or more and the average unit size is over 1,000 square feet. Annual maintenance fees averaged $980 in 2017, remaining relatively flat with a one percent increase over 2016.

An exciting new concept, similar to time-share properties, is what we classify as a vacation-rental community. These developments are purposefully designed as an investment opportunity, home, and vacation getaway all in one. As an “investment property,” a cash-flow stream and increasing property value are important factors. A “home” needs to be designed for comfort, efficiency, and convenience. And an attractive “vacation getaway” needs close access to recreational opportunities. Perfect for a Ouray Colorado development.

As an investment, a vacation rental property should be as trouble-free as possible. This means a lot of up-front work for the developer, but then later dividends through sales and rentals when the project is operational. A proper vacation rental community structure today includes an online booking and promotion system. The units will need cleaning and maintenance, and the general property amenities must be carefully operated, supervised, and maintained. A staff, just like a hotel housekeeping crew, will be recruited, established, and managed. An on-site office location then needs to be managed, and can operate as the community center for a variety of functions and activities. Typically to maintain and operate the luxury community once completed, it becomes a function familiar to those currently in the hospitality industry, and familiar with hotel management and operations … book, accommodate, clean, maintain, promote. The cycle repeats daily, weekly, monthly, and yearly. So the developer recruits and puts in place the organization to accomplish this.

The hospitality industry has been dominated by corporate entities, franchises, and independent mom and pops. The newer category of individual and investor owned vacation rental properties has created a strong demand for property managers. Many of these property managers are familiar with online booking sites such as VRBO, AirBnB, HomeAway, and others. Ouray’s 9 Acres Vacation Rental developer will not only plan the site, the floor plans, and the amenities, but likely contract for the property management function.

Although a variety of configurations are possible, we feel a group of approximately twenty buildings with a mixture of duplexes, tri-plexes, and four-plexes would easily yield 60 to 80 units, in addition to parking, streets, and attractive common areas. By being next to the popular Uncompahgre river trail, the property is already an attraction. A contemporary, modern design, thoughtfully crafted, with smart use of space for the vacationing renters, will be a five-star winner. Every bedroom a bathroom; a large number of bedrooms; large gathering great room with large table and many seats ... popular with vacationers and group gatherings.

An unrealized positive for Ouray – many don’t know that four beautiful seasons exist in SW Colorado, so there is a real upside potential for fall, winter, and spring traffic growth, in addition to the boom in the summer.

An investor wants not only nice, but “trouble-free” – after all, they became able to invest by being busy and successful with other ventures. Or – they may be a retiree, one of the more than ten thousand boomers retiring every day – many in excellent health and having dreamed of experiencing more of a recreational lifestyle away from crowds and freeway traffic.

Today Ouray proves perfect for the escapee ready for small-town life, and an outdoor recreational lifestyle through four wonderful seasons. A boomer / investor can reserve their own lodging time at the resort on the online calendar, and then offer the remaining time to the property management organization for booking others. Management entities typically charge in the range of 20-40% of revenue for performing the hospitality and promotional roles.

Ouray has proven attractive to retirees from Texas, California, and Florida, and those three states alone are accounting for 27% of U.S. boomer retirees today. Close by metropolitan areas will provide additional visitors and investors, especially from the Colorado front-range metropolitan areas.

We believe this Ouray vacation package will be tough to beat for vacationers, investors, and the hospitality staff. The offering includes:

· World-class outdoor recreational areas in SW Colorado

· Popular outdoor amenities on the property

· An investment property and vacation home all in one

· 1031 exchange opportunity if they choose to have it be their primary address

· Close to area national parks, hiking trails, skiing, golf, hot-springs, and airport

· Resort-style feel with the luxury of a home

What will life at the resort on Ouray’s 9 Acres be like? For starters, residents and guests will discover that many of their passions are literally minutes away from home. Located alongside US550 and the Uncompahgre River, the stakeholders in Ouray’s 9 Acres will become part of the best that SW Colorado has to offer. If you are that developer – contact us today and come see and walk the property. We are sure you will agree – this opportunity is waiting to happen.

Ouray Colorado Real Estate, Ouray Colorado Development, Ouray Colorado Land,

Ouray Commercial Real Estate, Ourays 9 Acres