AIF Study by PricewaterhouseCoopers Reports Robust Financial Indicators In Multibillion Dollar Timeshare Industry.

WASHINGTON -- The AIF annual benchmark study by PricewaterhouseCoopers (PwC) of the financial performance of the timeshare industry released today by the ARDA International Foundation (AIF) underscores the ongoing, robust financial performance of the multibillion dollar vacation ownership industry. The study, which focused on an industry subset of 46 companies encompassing 293 timeshare resorts in active sales1, showed key financial ratios such as sales and marketing costs remained in-line as companies posted robust 9.1 percent growth in 2005. Each year, PwC surveys a group of timeshare resort developers to take the industry's financial pulseCoanalyzing industry trends and setting benchmarks on product pricing, sales, marketing costs, and financing, and other financial indicators. This year's findings reveal a 9.1 percent year-over-year increase in net sales of timeshare resorts in active sales, as the industry subset reported $6.1 billion in net new sales, following sales of $5.6 billion in 2004. Approximately 91 percent of 2005 sales occurred in the U.S. Average net sales per active resort were $21.3 million last year.

"ARDA's recent research has shown the popularity of vacation ownership continues to rise among consumers; this study takes a close look at the business of timeshare development and shows companies' financial performance remains on-track to satisfy that growing demand," said Howard Nusbaum, president and chief executive officer of ARDA.

Half of respondents sold more than 2,500 timeshare weeks during 2005, with the largest companies experiencing the most rapid growth (11.8 percent increase in net new sales). While most timeshare companies continue to sell timeshares that are based on ownership of an interval week at a specific resort, points-based products, in which an owner has purchased a points or credits backed by a usage right to a club's resorts, have achieved a prominent position. Of the $6.1 billion of net new timeshare sales in 2005 (excluding fractional sales), $5.1 billion (84 percent) was classified as interval week sales, while $1 billion (16 percent) was classified as points sales.

Timeshare sales in many locations exhibit seasonal patterns, as popular vacation periods correspond to heightened sales activity. Compared to 2004, net sales in 2005 were 7.2 percent higher in the first quarter, 6.7 percent higher in the second quarter, 10.9 percent higher in the third quarter, and 10.5 percent higher in the fourth quarter.

"Study results reflect strong growth in the timeshare industry, as well as companies' ability to control key financial indicators as they expand and enter new markets," explained Scott Berman, a PricewaterhouseCoopers partner.

The weighted average price of a timeshare interval, or week, sold during 2005 was $17,797, reflecting an increase of 3.8 percent over 2004 prices. The increases reflect changes in timeshare week prices as well as any changes that may have occurred in the types of units sold. Approximately 63 percent of respondents reported higher average prices in 2005 than in 2004, indicating that price increases were broad-based.

Study results reflect the continued importance of financing provided to consumers at the point of sale. Companies reported financing 72.9 percent of the dollar value of timeshare sales in 2005, compared to 69.7 percent in 2004. The remainder of the sales was cash or cash-out within the first 90 days. The average interest rate on new consumer loans in both 2004 and 2005 was 13.9 percent, and companies reported receiving average down-payments equal to 14.9 percent of the contract price.

The study participants included eight publicly traded companies, or subsidiaries of publicly traded companies, which accounted for 72 percent of net sales reported, and 38 privately owned companies. Geographically, the survey respondents broke down as follows: 17 companies were headquartered in the Southeastern U.S., including 13 Florida-based companies; 13 in the Northeast and Midwest; and 12 in the Southwest and West. Approximately four percent of the respondents were based in other North American countries (comprised of two Canadian-based companies), and approximately four percent were based in other international locations.

The PricewaterhouseCoopers study supports the findings of an AIF study released last week on the full industry that also points to the dramatic strength in vacation ownership, with increases in new owners and occupancy rates that far exceed U.S. hotels.2

The American Resort Development Association is the Washington D.C.-based professional association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has nearly 1,000 members ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The ARDA International Foundation (AIF) conducts research and develops education programming for the timeshare industry.

1 Companies with resorts that reported 100 or more new sales during 2005.

2 Timeshare sales climbed nine percent during 2005 to $8.6 billion, according to a comprehensive industry study released in September by AIF. According to the survey of 596 timeshare resorts, there were a total of 1,604 vacation ownership resorts operating in the U.S. as of January 1, 2006.