I recently came across two news items that talk about the latest trend in technology and travel. One was from ABC news. The other was from hotelsmag.com which may have put it best by calling the trend “digital detox.”
What are they talking about? The idea that people want to go on vacation to get away from it all— technology, email, phones, Wi-Fi and so forth. Funny isn’t it. We are so infatuated with the latest and greatest, yet it is driving us back to what vacations are all about. And that is regenerating our own batteries by shutting down.
Yeah, hotels are coming up with lots of fancy names for it. Like “Braincation Zones” at Marriott and “tech-free areas” at Renaissance. And even the “Disconnect-to-Reconnect” program from the Four Seasons Costa Rica.
But all you really need is some will power, a beautiful location, a spectacular property, and some great weather. So, where do you want to go?
Founder, CEO, and Chairman
When I began my career in resort real estate, home swapping was not anything too many people paid much attention to and most of us in resort sales never thought much about it. It was paper-based and you made your reservation over the phone—today it seems so out-of-date and almost foreign.
It’s safe to say that the “old guardhouse swapping clubs” have struggled to adopt to the Internet—at least at first. Industry professionals agree that it’s a pretty hefty accomplishment to have migrated from “traditional paper-based catalogs”to what we call today “online matching-making websites.”
Traditional home exchange companies have made a mark for some types of homeowners, however, they have really never made a significant impact on the luxury resort real estate market. The main reason is because their programs were not geared toward luxury or second homes.
With the explosion of online applications, companies like 3RD HOME are now coming up with innovative ways to incorporate the functionality of high tech into creating value for owners of luxury resort real estate. Functions like member reviews, online chat, online bookings, 24/7 reservation program, reviews and testimonials, and the option to search online are all necessary functions to earn the respect of a luxury second home owner.
Many of the traditional exchange sites are acting like online dating services. This “affinity” program is almost like a dating service. During registration, users are asked to fill a “detailed profile to describe not only the location and the services of the property, but also the member’s interests and educational background for better member-to-member matching.” The Facebook model certainly applies here—customers are asking to be integrated and want to know more about each other’s interests and backgrounds. Then people start reaching out to each other chatting, asking millions of questions and lots of talking back and forth. Now, some people may have the endurance and time for this type of activity, but many in the affluent category do not.
Our members do not want the hassle of all the chat, the talk back and forth, they just want to go on line, find what they want, when they want it and book it. This is what makes us different from the others out there. One thing for sure, our members are all like -minded individuals, that demand efficiency, privacy, speed and information and they want it now.
Founder, CEO, and Chairman
Home exchanges are a great option for cost effective family vacations. Expenses are nominal and you are saving thousands of dollars versus hotel rates. They come with lots of added amenities and offer lots of vacation options —from resort-style villas to ski condos, and swanky city lofts. It did not surprise me when RCI took notice and launched programs similar to a traditional home exchange.
Wyndham Vacation Rentals, part of the Wyndham Worldwide family of brands, launched Wyndham Home Exchange; a program that would allow “homeowners of vacation rental properties to trade weeks at their rental property for access to accommodations at more than 4,000 RCI affiliated resorts around the world.”
Wyndham clearly sees the growth of this segment and wants to be a part. Similar to our company 3RD HOME, the new Wyndham program administered by RCI, the world’s largest vacation exchange company, gives “Wyndham Vacation Rentals homeowners access to additional vacation options by allowing them to deposit unused weeks of their choosing at their rental property.”
It’s a way for owners of vacation homes to see the world and get added utility. That being said, I do believe that Wyndham will attract a different customer than 3RD HOME. They will appeal to vacation homeowners that perceive going to a timeshare as a good option for them. But, that is not necessarily the case for all second homeowners.
In short, Wyndham will attract a mass audience, probably not the luxury second homeowner, who wants to visit properties of the same caliber as their own, as well as host like-minded individuals.
All told, the fact that Wyndham is allowing vacation homeowners to exchange into RCI is further evidence of the value and growth of home exchange to second homeowners.
Founder, CEO, and Chairman
A tumultuous ride over the past 5 years got me thinking about the future of vacation home ownership. Things seem to be settling down. However, they are settling down at a snails pace compared to what we saw from the late 90’s to 2007. Was it a false surge in resort real estate? Absolutely! People were not buying for personal use but for financial gain. After all, prices were rising at record rates, and people were flipping contracts without closing and making big profits. And the bottom line was not views, or family enjoyment, but simply profits. How much and how quick.
I watched buyers line up at our launches and buy up to 28 units each. They did not care about the views, floor plans, and amenities. They only cared about how quick they could flip it and for how much profit. Financing? They never expected to have to close. A contract could be flipped a week later for a $100,000 profit.
Who do we blame? We could say the sales people for selling the wrong values. But can we really blame them since they were being paid commissions? Or maybe the mortgage lenders, who, with 5% down and easy to qualify programs, made buying multiple units achievable for people who really could not afford them. Or was it the buyer for being greedy? Remember the old game we all played as kids called Musical chairs? In 2007 the music stopped and the nine people standing had one chair to find. Maybe one out of nine of these flipping investors found a safe chair. The rest? Well, they probably gave it all back.
So, what is the future for second homeownership? Many of these owners now feel “stuck” with ownership and the expenses that come with it. In the past people could sell and buy a different second home every 5 years, however, in today’s economy most people who bought more than 5 years ago could not sell it for anywhere close to what they paid for it. So, owners are looking for more value. More benefits to turn an under-utilized asset into something that is more acceptable financially. Many have turned to short-term rentals or obtained travel benefits by joining luxury exchange or reciprocity clubs like 3RD HOME. And what was first driven by the economy will no doubt become the standard.
Founder, CEO, and Chairman
Firstly, in our society at large, we have evolved into a community driven by a desire for options. Whether it’s a second car or a second watch, or a second home, we have grown accustomed to having options expand our lives in multiple ways. At THIRDHOME, we understand this core human desire and are satisfying it in a new way, specifically within the second home market.
Secondly, the current economic climate has affected most industries, but the luxury property development sector has been hit harder than most. Selling real estate is now more challenging, and agents and developers need meaningful points of difference and added-value services to help drive sales. THIRDHOME has created a unique proposition that will differentiate its offering by creating an owner benefit that no one else is currently providing.
Built as a private club where members gain access to multiple luxury second homes via a limited access property exchange network, THIRDHOME has created a unique value proposition for second home ownership based on the principle of reciprocity. Enabling our members to ‘get out what they put in’ lies at the heart of everything do.
Our thinking is simple. If you own a luxury second home, you should not have to pay rental rates to use others when you travel. Use your second home to give you a THIRDHOME anywhere else in the world.
The Club has rapidly grown to over 14,5000 properties in 100 countries worth an average of $2.4 million each. Members have access to a network of other homes of a similar level all over the world. And, given the economic climate, everyone is looking at what they own through different lenses and asking themselves – ‘Am I getting the most value possible from owning this particular home?”
THIRDHOME is the answer to the main question and concern that prevents the purchase of a second home – before I buy this property, am I sure that I want to be coming back here year after year?
Now, with THIRDHOME membership, a single second home now opens the door to hundreds of others all over the world for a reasonable membership and a nominal reservation fee.
THIRDHOME will revitalize vacation home sales and resort/luxury property investments and provide second home-owners with a win-win way to leverage their investment.
To find out more, visit https://www.thirdhome.com/