Marriott Vacation Club Exposure Analysis

With the rapid increase in vacation rental inventory in top tier holiday destinations, Marriott Vacation Club is seriously exposed to inventory overhangs in some, but not all, of its locations. This is an analysis of Marriott’s exposure to competing vacation rental inventory.

Methodology

Scope

The data is an aggregate analysis of the world’s top five vacation rental conglomerates (Airbnb, Homeaway + VRBO, Flipkey + Tripadvisor, Villas.com + Booking.com + Priceline, Housetrip). This covers at least 80% of online viewable vacation rental inventory in the top vacation rental destinations.

Process

Out of a total of 5.5 million vacation rentals globally, each was examined for the number of rooms, whether it is actively renting, whether it is a potentially duplicate listing, and the distance to the nearest Marriot Vacation Club property.

The geocodes of each vacation rental and each Marriott property were used to calculate accurate distances. However, some vacation rental agencies obfuscate geocodes around a 100 to 500 meter radius. We assume this random obfuscation averages out across the thousands of properties in consideration.

Properties were included only if they were full units that contained at least one bedroom. The average number of bedrooms was closer to 2.5.

Only 11% of listed vacation rental inventory was found to be duplicated across the providers.

For Marriott destinations with competing vacation rentals, the total number of rentals on the market was calculated within a competitive band of 0.5 miles, 5 miles, and 10 miles. The destinations were then analyzed in terms of Marriott’s market strength within the specific location (0.5 mile radius) and within the town (10 mile radius). Please note: the exposure of a Marriott location with multiple sites is the average exposure across each of the Marriott sites within that location.

Analysis

Location Market Share
(Number of Marriott Units According to Market Share Exposure)
Vr exposure pie 25ff537577b9f957502d9f1570b98751c95985c61416d647a2f3113d5bf77a0d

For almost half of Marriott properties, Marriott owns a significant majority (80– 90%) of its location inventory, and all of Marriott’s properties are in prime locations within the local holiday destination. This means that within a half mile radius of Marriott’s properties, there are only a small number of competing vacation rentals. Some examples of these healthy destinations are Mallorca, Miami, Orlando, and Phuket.

However for over a quarter of their units (yellow, orange and red slices on the chart), there is significant competition that will lead to inventory overhangs as this competition grows. These destinations include Marriott’s skiing destinations (Park City, Vail, Breckenridge) and large cities (London, San Francisco).

Number of Competing Vacation Rentals by Marriott Location
(with multi-site locations, number is an average across each of the sites)
City (Units) Under ½ mi. ½ to 5 mi. 5 to 10 mi. Total Location Share Town Share
Abescon, NJ (180) 3 2 910 915 16%
Aruba (668) 181 1,294 120 1,595 30%
Aspen, CO (73) 80 1,469 521 2,070 3%
Bangkok, Thailand (55) 175 3,359 1,044 4,578 1%
Boston, MA (84) 175 2,718 454 3,347 2%
Branson, MO (132) 90 1,302 519 1,911 6%
Breckenridge, CO (78) 3,354 2,999 2,729 9,082 1%
Estepona, Spain (173) 145 3,224 1,902 5,271 3%
Fort Lauderdale, FL (206) 120 1,846 2,779 4,745 4%
Hilton Head, SC (1043) 587 6,575 4,010 11,172 9%
Kauai, HI (538) 261 578 1,979 2,818 16%
Lake Tahoe, CA (474) 147 3,393 2,050 5,590 8%
Las Vegas, NV (671) 502 1,485 1,184 3,171 17%
London, UK (49) 363 23,183 5,300 288,846 0%
Mallorca, Spain (224) 12 681 1,590 2,283 9%
Marbella, Spain (288) 215 3,085 2,807 6,107 5%
Marco Island, FL (67) 474 1,994 222 2,690 2%
Maui, HI (459) 448 5,199 1,010 6,657 6%
Miami, FL (141) 10 157 2,369 2,536 5%
Newport Beach, CA (700) 65 1,215 1,915 3,195 18%
Oahu, HI (560) 412 246 140 798 41%
Orlando, FL (2066) 40 2,356 8,846 11,241 16%
Palm Beach Shores, FL (341) 70 489 702 1,261 21%
Palm Desert, CA (1210) 45 3,090 5,485 8,620 12%
Panama City, FL (83) 54 3,104 4,883 8,041 1%
Paris, France (185) 43 403 167 613 23%
Park City, UT (317) 1,844 5,313 960 8,117 4%
Phoenix, AZ (213) 27 1,041 2,494 3,562 6%
Phuket, Thailand (271) 10 107 432 549 33%
San Francisco, CA (25) 209 5,973 2,589 8,771 0%
Singer Island, FL (169) 133 377 835 1,345 11%
St. Thomas, USVI (260) 188 1,953 1,469 3,609 7%
Vail, CO (141) 439 1,854 2,571 4,863 3%
West Indies (88) 18 59 133 210 30%
Williamsburg, VA (200) 6 254 72 332 38%
Total 10,944 92,376 67,191 170,511 53% 7%
Conclusion

This analysis is based on the world’s largest and most complete database of internet-viewable vacation rental inventory. The analysis shows that Marriott is facing significant pressure in over a quarter of its destinations, but for half of its inventory, it dominates its immediate vicinity.

The included table shows that town-level inventory is far more competitive than location-level inventory in every single destination, and therefore, long-term, competition will continue to create inventory pressure.