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A newspaper ad eventually led this entrepreneur to a $4.6 billion deal

Craig Nash, chairman, ILG.
Craig Nash, chairman, ILG.

A newspaper ad led Craig Nash to the timeshare industry.

It was 1978, and Nash had just graduated from law school when he applied for a position with a two-man law firm that had begun advising clients in the then-nascent industry.

That serendipitous act put him on a path that led to the presidency of one of the pioneering sharing-economy platforms, a prescient series of acquisitions and the company’s eventual public spin-off as ILG.

Over the years, Nash has served as president of Interval International, the firm’s original name before being acquired by IAC, InterActiveCorp.; and chairman, president and CEO of the spin-off ILG, Interval Leisure Group. In 2018, ILG made headlines when it merged with Marriott Vacations Worldwide in a $4.6 billion deal with Nash at the helm.

But the titles tell just part of the story. As an entrepreneur, Nash has been pivotal in developing widely used timeshare practices, shaping regulation that protected consumers and facilitated responsible operators, and navigating digital disruption.

Last summer, he joined Greenspoon Marder’s Corporate Real Estate Timeshare & Resort’s practice group as “Of Counsel,” where he briefly worked in the 1980s. He continues as senior adviser to Marriott Vacations Worldwide and non-executive chairman of Interval International, the Miami firm founded in the 1970s to enable timeshare exchanges pre-internet. Today the company offers a variety of membership services for timeshare owners.

In a digital exchange, Nash shared his views on the current state of the timeshare industry with the Miami Herald’s RE|source team.

Q: Give us a 2020 view of timeshare development. With so many big players in the industry, and so much product available worldwide, how are developers reshaping the product? Are they leaning more toward hotel-condo versus freestanding timeshares? Incorporating additional services?

The industry has evolved to be much more capital efficient, fueled by the events of the Great Recession. As a result, there are many more constructs of how timeshares are done today that don’t require developers to build as much. For example, there has been a rapid adoption of products like pure points clubs, which smooth out earnings and reportability and allow developers to sell the same product throughout the country, as well as provide a lot of flexibility to consumers. There are also “fee-for-service” arrangements in which timeshare operators sell inventory on behalf of a third party and get fees associated with the product, such as fees for marketing, selling and management. With respect to the incorporation of additional services, timeshare players are focused on the overall vacation experience. While the individual units themselves are still very important, consumers today are increasingly interested in experiences at timeshare resorts and their surrounding areas, including activities, dining and social communal spaces.

Q: Where do you see the greatest potential for growing timeshare use, both in terms of locations and in terms of demographics?

In the U.S., growth will continue to be concentrated in the usual high-demand destinations such as Florida and Hawaii. However, we are also seeing that timeshare players are increasingly moving into secondary locations that have become incredibly popular with younger demographics such as Nashville, Austin and Portland. Additionally, we are also seeing more participants push into cities that haven’t typically had many timeshare options, including New York City, San Francisco, Washington D.C., and San Diego. These alternative locations are increasingly appealing to millennials and Generations X,Y and Z as well as to baby boomers who want more options, and timeshare players are taking notice.

Q: How has the explosion of Airbnb and other home-sharing options affected the timeshare industry? Has it impacted investor interest in developing new product?

Whenever supply is added to the travel dynamic, there will be an impact on home-sharing competitors, including hotels and timeshares. Investors buying into public companies will always have questions about home-sharing competition. The answer should be that home-sharing options are always going to compete for customers and timeshare operators need to provide a better customer experience. This is being done through professional resort management, consistency of service delivery and providing activities and other vacation experiences that are tied to the overall offering. Timeshare players have historically thrived in this arena, and that is what has been the best selling point of timeshares for many years.

Q: From a development standpoint, how does ROI on timeshare development stack up against ROI on traditional hotel and multifamily?

ROI on timeshare development depends on several factors, including location, how the financing is structured and the marketing efficiencies for a particular location. Timeshare operators today are also deploying capital in a more efficient manner versus years ago. Holding less inventory on the balance sheet in advance of sales and utilizing just-in-time inventory arrangements are just a few of the ways returns are being enhanced.

Q: Where do you see the industry in five years?

The industry will continue to consolidate and evolve rapidly. In my four-decade career, I’ve seen the product evolve from the fixed-week, fixed-unit sale of converting condos to vacation usage, to floating units and floating time and most recently, to pure points clubs. In five years, I expect the industry to continue its evolution, with the incorporation of even more experiences and technology-enabled conveniences, as well as a variety of products that allow less-than-lifetime purchases by the consumer.

Q: You started in the timeshare industry in the 1970s, when most developers were small players, there was no internet, and the industry had a shady reputation. Much has changed since then. To what do you attribute your own ability to navigate disruption, and what advice do you have for others undergoing disruptive shifts?

The timeshare industry was really the first form of the sharing economy in U.S. hospitality. Like many other emerging industries, it did not fit well into any existing regulatory or legislative frameworks, which I and other early practitioners worked to create in the late 1970s and early 1980s. Since then, the industry has undergone massive waves of disruption that have ultimately produced a much higher quality product. I have found that the key to navigating these disruptive shifts is to embrace the disruption and constantly look for ways to evolve.

From the time I took over as President of Interval International, we were always looking for new features to add and for complementary service offerings to enhance the value proposition. Much later, as a public company CEO, I led the company’s strategy to expand and diversify our platform, including the acquisition of Hyatt and Starwood’s shared ownership businesses. This established us as a vertically integrated leader in the industry. Our success navigating the disruptive events of the Great Recession was driven by a great team of people that were focused on a common goal and were eager to disrupt a constantly changing industry.

My advice for others is to embrace this disruption. Businesses can only be successful if their product and distribution evolves with changing demographics and continues to satisfy the desires and tastes of consumers.

This article was updated to correct Nash’s role with IAC.

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Jane Wooldridge, an award-winning journalist and Miami Herald veteran, oversees coverage of real estate, economy, urban development, tourism, cruises, visual arts and Art Basel. She is president-elect of the Society of American Travel Writers. Find her on Instagram @JaneWooldridge.
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