The latest entry into the vacation rentals listing/management space is Vacatia, a site wholly owned and operated by Vacation Listing Service, Inc.
The site, headed by CEO Keith Cox alongside a 12-employee team, is aiming squarely at the timeshare segment of the vacation rental market - a segment often overlooked as one of the original business models of the shared economy, as Cox shared with Tnooz:
I see the timeshare industry as the original ‘share economy’ with roughly 8 million week-long vacation ownership intervals already structured, sold and freely tradable in the U.S. alone. The industry is now global with $14 billion in new timeshare sales every year, even with a relatively illiquid secondary market.
I see this business opportunity as the most exciting one in my career to date, with a chance to help create a sustainable resale solution and build an online sales and marketing channel for an industry that currently sells almost exclusively offline through traditional methods.
Especially given the more seedy reputation fueled by some very high-profile failures in the timeshare market - the Siegels of Queen of Versailles notoriety comes to mind - the market opportunity to shift sales and management of the timeshare industry online is very real.
The idea is to allow timeshare properties to solicit fractional owners via the website, rather than traditional offline channels.
This both allows the properties to build up ownership at a lower cost and to allow potential owners to compare offers and availability across a worldwide network. This comparison shopping leads to a more informed consumer, who will likely be more happy with their choices - and should also lead new owners into the timeshare fold.
Read on for the Tnooz Q&A with CEO Keith Cox. Cox's stint in the vacation resort world began after co-founding an early-stage venture firm Brainstorm Capital, and co-founding World Wrapps and Pacific Catch, which is a moderately priced, Pacific-inspired fish house. He has also worked at Booz-Allen & Hamilton and Deloitte & Touche.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
I’ve been involved in the formation of a number of consumer businesses over the years, both as a founder and an investor.
I founded Vacatia after running a business in the fractional ownership space for some time and experiencing first had the need to support owner resales.
I was introduced to a like-minded colleague with a depth of timeshare experience. We identified a white space in the industry — the need for an open, online marketplace for the timeshare industry — and then began to develop a business case and team that would be able to execute on our vision.
What is the size of team and names of executives and key personnel?
We currently have a dozen employees and a half a dozen contractors. Key executives include: Keith Cox, CEO; Michael Burns, President; Caroline Shin, Chief Product Officer; Scott Christian, CFO; Peter Zimmerman, SVP of Corporate Development; Steve Muldowney, General Counsel; Alex Gamburg, Senior Director Online Marketing; Nicole Reitter, Director of Marketing; Michael Longway, Director of Business Development
Please tell us about your funding arrangements.
Closed a Series Seed round with a total of $5million, including our initial convertible notes. The funding was raised with investments from leading executives and investors in the travel, hospitality, timeshare and real estate e-marketplace sectors.
What is your estimation of market size?
This is $14 billion global annual market, including $10 billion in North American sales each year.
Please discuss your competition.
The competition is quite fragmented. Most notable in the industry are: Redweek.com and Sellmytimesharenow.com, both of which charge upfront advertising fees. There is a very credible group of regional timeshare brokers. Vacatia is creating a new, open transactional marketplace that serves the entire industry.
What is your revenue model and strategy for profitability?
Revenue capture is based on a platform fee generated when a timeshare is sold. Strategy for profitability is to continue to expand our presence through brokers, developers and other partnerships and marketing to capture market share.
We also have several marketplace product lines that will launch over the next year, including rentals of timeshare inventory.
Describe what your start-up does, what problem it solves (differently to what is already out there) and for whom?
Vacatia.com is an online marketplace for shared vacation ownership products. Vacatia provides consumers and the vacation ownership industry with a groundbreaking safe, open and easy-to-use transactional marketplace where people can research, discover and buy timeshares and fractional interests at great prices, and cost-efficiently sell timeshares all online.
Why should people or companies use your startup?
Today, there is a need for an active marketplace serving the growing number of owners who are trying to sell their vacation ownership interests. Vacatia.com is an end-to-end transactional platform that will support liquidity and benefit everyone in the space — consumers, brokers, agents, developers, homeowner associations and resort managers.
In addition, we are focused on creating a trusted marketplace that caters to a new generation of buyers who want ready access to information, content and tools online to make smarter, easier and more rewarding lifestyle and purchase decisions and are embracing the sharing economy, making timeshare a perfect fit.
With Vacatia, we hope to bring a solution to both issues with a platform built around transparency and reliability.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
Vacatia will utilize a variety of marketing and business development strategies and initiatives: Promotion of curated deals; targeted online campaigns; offline destination marketing; listings and content distribution; social campaigns with timeshare enthusiasts; supporting the active brokers in the space; creating strategic industry partnerships; referral programs; etc.
The good news is that there is a huge market need and people are looking for a solution.
How did your initial idea evolve? Were there changes/any pivots along the way? What other options have you considered for the business if the original vision fails?
Vacatia.com ultimately came out of my experiences running a fractional ownership company. The concept evolved over time in concert with my partners in the business who brought both timeshare and online travel experience.
There were multiple changes to the original business concept along the way as we became smarter about the industry and how to create a platform that can serve all the industry participants.
The vision extends to positioning timeshare to the next generation of buyers and generating leads for developers of new timeshare and fractional ownership resorts as well as creating a rental business given the beautiful resort residential properties that make up the industry.
Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome?
Running Vacatia as the leading online vacation ownership marketplace, bringing transparency to a currently illiquid secondary market, creating a long-term sustainable resale solution and supporting the needs of the vacation ownership industry. I believe Vacatia will be transformational in a way that serves the interests of all stakeholders.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
The vacation ownership industry segment is a very active and robust vertical that provides tremendous satisfaction to millions of Americans...until they want to re-sell their timeshares. The resale opportunity happens to be a white space that needs a solution in a 40+ year old industry (vacation ownership).
Plus, there is virtually no online sales and marketing channel addressing the need to source the next generation of buyers. We are excited about addressing these needs.
Timeshares have often been relegated to the bargain bin, or looked at as a meeting on the way to a complimentary ticket to a show or some other activity. Many travelers sit through these timeshare sales pitches, even though they know full well that they aren't going to by. And those that do by aren't looking at all of their options - just at the sales person before them.
So Internet savvy travelers seeking fractional ownership situations will be interested in this budding marketplace. It will also bring new customers into the fold, as the ease-of-purchase (and elimination of the hard sell approach) streamlines the decision making process for a timeshare purchase.
$5 million in funding backing a beta product is also very significant. Clearly some investors are bullish on this area of vacation rentals/ownership, and the most telltale sign of the product's potential will be how quickly similar services pop up.