The Evolution of Vacation Ownership: Insights from Rob Webb

What does it take for an industry to survive decades of legal battles, regulatory overhauls, and a complete reinvention of its core product...and still come out standing?


In this episode, Gaetan Babin sits down with industry veteran Rob Webb for a wide-ranging conversation on how vacation ownership got to where it is today, where the law has shaped (and sometimes saved) the industry, and what's coming next.

From the shift away from deeded models toward trust-based products, to the quiet but critical role associations like ARTA and CRTA play in keeping independent developers in the game - Rob brings the kind of perspective you only get from decades inside the industry.

They also dig into AI's growing footprint in hospitality and what consolidation trends mean for the future of vacation ownership as we know it.
In this episode:

- How the timeshare industry evolved from deeded ownership to trust-based products
- The role of regulation and consumer protection in shaping the modern industry
- Why small independent developers need association support to survive
- What AI means for the future of vacation ownership
- Why collaboration - not competition - is the industry's best bet for sustainable growth



#VacationOwnership #Timeshare #LegalFrameworks #IndustryEvolution #AIinHospitality #CRTA #RobWebb

Voices of Vacation Ownership is part of CRTA, Furthering vacation ownership in Canada and throughout the world. Learn more about CRTA and the benefits of being a member here: https://canadianrta.org/#

Transcript

SPEAKER_02 0:00

This episode is brought to you by Hama Campai, the first vacation ownership project on the northern coast of Ecuador.

SPEAKER_00 0:13

This is Voices of Vacation Ownership, the only podcast where the vacation ownership industry's top executives speak openly about what's really driving the business forward. Hosted by Dave Hambin, president and CEO of the Canadian Resort and Travel Association. Each episode digs into the trends, challenges, and opportunities shaping our industry. One conversation at a time. Let's go.

SPEAKER_02 0:45

Hi everyone, I'm Gaitan Badden, and welcome to Voices of Vacation Ownership. It's where we speak with leaders shaping the future of our industry. Now, each episode focuses on ideas that strengthen performance, enhance the owner experience, and move our industry forward. Today I'm thrilled to be joined by Robert Webb. He's a partner at Baker Hosteller and unquestionably one of the most experienced legal minds in the vacation ownership industry. Rob has spent decades working across resort development, regulatory frameworks, and industry governance. And he's played a major role in shaping many of the legal structures our industry operates within today. As our industry evolves through technology, new ownership models, and changing consumer expectations, the legal framework must evolve with it. Robert, welcome to our podcast.

SPEAKER_03 1:49

Thank you, good tan. I have never been called old in a nicer way than you just did.

SPEAKER_02 1:56

You're still younger than I am, so I'll keep that record. There you go. Rob, I've known each other, we've known each other for a long time. And uh I just want to start by saying thank you so much for the work you've done, not only in the United States, it's in the industry, but helping us out in Canada with when issues come in with legislation. You're the first man I go to, and you've always been there to help.

SPEAKER_03 2:17

Well, it's my great pleasure. I've been active in Canada for years, first uh in Carta, uh when it was called Carta, and now uh Carta. Uh and you know the US government is isn't being very friendly to Canada right now, but the uh timeshare and shared ownership industry, Canada is an incredibly valuable partner. Uh we love Canadian developers and tourists, and uh I hope the government gets over itself soon. But until they do, we will always be here for you.

SPEAKER_02 2:55

Well, you certainly have so far. But you've been involved in the industry without going too much with your age for decades, as I have, and you shape legislation and frameworks. But how has the legal foundation of vacation ownership changed and uh how has it evolved over time since you know it's interesting, Gaetan?

SPEAKER_03 3:14

Um I've also been very active in the European Association, which is now called RDO. Yes, but because changes in the European directives, uh the timeshare industry is just not that robust as it used to be there. But the one thing that Europe always had over the US is uh the products were mostly trust-based or contract-based. Uh in the US, they uh are moving away from uh all being deeded, but for various tax and regulatory uh reasons, they've all been deeded for years, which brought in the specter of the expense and delay of judicial foreclosure of financing, uh, and just the general complication of creating a real estate regime, uh having an owner's association, all the stuff you have to do for residential development, and frankly, most of it doesn't work well or smoothly or efficiently uh when you apply it to shared ownership. But you know, the tax and accounting tales have wagged the development dog in the timeshare industry in the United States uh almost my entire career. And I started in 1980, so this is my 46th year.

SPEAKER_02 4:33

Amazing. So I remember having For a long time. A long time, having great conversations when I first started in the industry 30 years ago uh with Crystal De Hahn. Um it's what a wonderful woman. Incredible woman, and she so much inspired me. And when I asked her what was the most important thing in vacation ownership, because I was kind of starting in the industry and I would say, you know what, I need mentoring as much as I could. I was really picking my my my mentoring.

SPEAKER_03 4:59

You were down in K-Man, weren't you?

SPEAKER_02 5:00

No, I came into K-Man in uh 2011. So that was way before it was I was in uh British Columbia and Alberta in those days. And she said the most important thing is the owners. And she said since the very, very beginning when she was in her uh station wagon with John, and they were basically at these little file boxes, she says, like they were milk carton with files and exactly the way they started RCI. The the philosophy uh that she cared said it's always about the owners. But on a legal standpoint, what were the initial challenges that the industry had to challenge with? Because Timeshare came in like a big truck in the States. And what was some of the challenges? And has it changed today, or is it still the same? Or but initially, how did it start?

SPEAKER_03 5:47

Timeshare came into the States like a big runaway truck with faulty brakes on an icy slope. Exactly. Um but the amazing thing to me uh is that we survived uh a very, very bad start. We survived uh the collapse of the residential condominium business, which left partially and completely constructed but unsold condo units uh by the hundreds and hundreds and hundreds in Florida, Nevada, Arizona, California, and Hawaii, and Timeshare uh primarily began, not the only reason, but timeshare primarily began as a workout for failed residential condominium projects. Um I remember in 1980, prime interest rate was 21% um you couldn't sell uh anything. But timeshare uh breaking it up into 50 or 51 pieces uh intellectually appealed as an alternative. We didn't know it really isn't a workout, it's a separate product, it's an excellent product, but like any product, you have to have well-capitalized developers, you have to have experienced managers, you have to have thoughtful lenders with reasonable underwriting uh standards. Instead, we had a lot of salespeople that fled uh the condo sales and land sales industry and didn't know how to sell timeshirts, didn't even know what it was. Uh our lenders were savings and loans, where their loan officers got uh commissions based upon loans made, not loans performing. And uh there was very little uh regulation of the lenders, so money was flowing freely. The laws were non existent or completely inadequate, and uh developers uh uh could, not all did, but could uh take consumer deposits and pay marketing expenses, not because they were all trying to cheat people. I don't think but a small portion really went out to cheat people, but because they had no idea how b b huge their sales and marketing expenses were going to be. How much it costs to sell something to somebody that did not wake up that morning thinking they wanted to buy it, and how much it costs then once you get them to come and see you, to sell them and then keep them in the sale through rescission. Very, very difficult. So uh we were oh, and the managers um they weren't even experienced hotel managers for the most part, much less managing a hotel with you know 2,500 owners instead of just one. So I I'm saying all this because we survived it. And I still to this day shake my head because I was a brand new lawyer representing timeshare developers that were trying to do the right thing among a bunch of people that didn't know what they were doing and didn't have any money. And I learned a lot. Uh I learned an awful lot in self-defense. But timeshare is a great product because even though we didn't sell it well, even though our developers didn't, many of them did not have long-term staying power, some of the best ones were also doing business then and have proved uh that uh you didn't have to have all that regulation in order to make it. But we had to get rid of the bad players. And you know what? Once people bought, even though they were hotboxed, even though uh their experiences were not as nice as they are today in terms of management and and product quality and maintenance, today it's fabulous. Even with all that, they loved the product. So we had this, we had this uh, you know, situation where people uh were buying something they didn't know they wanted to buy, and ended up loving something that was sold to them the wrong way. Uh so we knew we were on the right track.

SPEAKER_02 10:15

Well, the product has evolved. I mean, if you look at the initial timeshare model, you bought a week, you had it for life, and the thought was not only do you get to enjoy it, your kids will enjoy it, and your grandkids will enjoy it, and it's a lifetime. But I remember even in Canada back at 30 years, there was no rescission involved. So that was conducive to a lot of unethical sales practice that you bought, you're stuck with it. When you said very clearly that nobody ever went to a presentation, look at the product with intention to buy to start with. And I think government needed to get involved to protect the consumer by by give but the rescission was probably the first act that government across Canada and the United States says you need to put a rescission act into this uh sales model.

SPEAKER_03 11:02

You know, um in 1983, the collision of consumer pressure, um good developers demanding decent regulation, um uh trying to get qualified lenders, quality lenders into the business, but uh they weren't protected in terms of what would happen in the event of defaults in their loans. So much needed to be addressed uh regul from a regulatory standpoint. Florida passed its first timeshare law in 1981, but it was a weak tee. Uh it did some things, it there was a lot of disclosure, uh, but it only required a limited escrow, and they had a rescission period that was long, 15 days, but it was waivable. So part of that sales process was you know, everybody waived the recession period, and so it wasn't providing any any uh help. And so there was a uh meeting of the American Land Development Association, as Arda was known then, Alda, um, and it was down um uh at um in Pinellas County at one of the famous resorts there. And uh the Florida Timeshare Association, which we were part of and our clients were part of, also met there. And uh one of the members of the House of Representatives in Florida came down and uh waived a copy of legislation that had just been passed by the Florida legislature, putting enormous teeth into the 1983 law. Uh, no sweet steaks in two years, pre-approval of advertising, 10-day non-waivable rescission period, and an absolute requirement that not a dime could be taken out of escrow until the developer delivered everything that he promised to purchasers uh in the documents during timeshare tours, uh in advertising, even. It all had to be provided and ready for use as portrayed. Or if you touch the money in escrow, it was a third-degree felony. And suddenly uh the bad players had nowhere to run, the good players were happy, but the advertising rules went into effect July 1, and we couldn't comply with any of them. So we had to do emergency rules with the regulators, and that was the start of many things. It was the start of Arta Florida, it was the start of outreach, communication, and a great eventual relationship between Arta and the Florida regulators, and which you know helped us um change the laws as needed to enable the maturity of our industry, and it helped us work together as competitors uh in the best interests of the people that Crystal Dahan was absolutely right about from the beginning. The purchasers, the owners, RCI was a pioneer. There would not have been a timeshare industry without RCI and also II. But, you know, I mean Craig Nash was part of the traveling show that went around to regulators along with RCI and their council. And soon a few of our developers and their lawyers joined them. And, you know, because of the exchange companies, we have an industry today. Uh, and Crystal De Hahn's role, Craig Nash's role, cannot be minimized, should never be forgotten.

SPEAKER_01 14:56

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SPEAKER_02 15:21

Well, you mentioned Craig Nash, and for our viewers that uh don't know the name, uh, he was the leader of Interval International, which is the other exchange company, but his background is in law also.

SPEAKER_03 15:31

He's a he was a lawyer. He worked for a guy named Mark Langer who did the first timeshare declaration uh in Florida. And I know because as a first-year associate, I used a Mark Langer declaration as the basis for the Orange Lake Country Club Declaration. I was drafting something, I didn't know what a timeshare condo needed to look like. So I said, Well, here's one over here. Let me look at it, and uh let me uh uh base my product on that. I learned a lot from from Craig Nash over the years. They're an incredible guy.

SPEAKER_02 16:10

Well, you're our subject, especially on the legal point of view, of the industry is evolving, products are changing. I mean, we we realize the importance of our association from Canada, United States with uh Jason Gammel right now, which is a great leader for ARTA.

SPEAKER_03 16:24

Yes.

SPEAKER_02 16:24

Amdatour, Acateur, our the fact of associations working together, we're kind of picking up a little bit because it's the consumer. He decides or they decide where they want to go and end up. But as the product changes, is that a new nightmare on Rob Rob Webb's desk, or is it, oh my god, here we go, we got a new model now coming up.

SPEAKER_03 16:43

We call it new business. New business. So it's not a bad thing. But I I'll tell you, I'm privileged uh to be a longtime uh officer and director of the American Resort Development Association. We're now known just by our acronym, ARTA. Um, CARTA MDATOR, Akatur. Um we all go to each other's conferences. Uh you and I are at a GNEX conference right now in Nashville, and everybody's here. Uh we always work together and support each other uh because we know that by having a common goal of protecting consumers, um uh enabling strong owners associations, and uh informing regulators about what our product's about, what our mission is, why we're good for their business, for their uh uh localities, uh for uh we're great taxpayers, um, you know, and we're great employers. And that mission for all of those sister associations has been so important, and your leadership in Canada has been a big part of that, and we're grateful for that.

SPEAKER_02 17:57

Well, thank you. But it's obvious that the collaboration between operators, associations, vendors, that collaboration, that relationship is of extreme importance because uh for an independent person getting into the business today and say I can do this all on my own, it's probably the wrong way to go.

SPEAKER_03 18:15

No, it is. I think um many times uh our clients and members, and it's gotten where I can't really distinguish between the two because I'm uh Secretary and General Counsel of Arta now, and I'm grateful that uh Arta is willing to keep me in the leadership role. But um we know that uh back in the 80s when Marriott got into business in Florida in 1984, they would have loved to have just done a contract, uh a license, a right to use, and let the Marriott quality standards, the Marriott hotel brand, and all the growth and history and respect that those brands, Marriott and its uh its sister brands in the hospitality industry command, that probably would have been enough to protect consumers. But we couldn't get past the um uh regulatory, uh legal attacks and accounting hurdles to doing that kind of product. And so we had to put together something that was much more expensive to operate and much more cumbersome. Uh and you know, some developers wish they never had an owner's association. But I'll tell you, dealing with an owner's association, if you're doing things the right way, it can sometimes be a pain, but those are your customers. So making your customers happy, your customer is your best referral source. Your customer will buy more from you. Your customer is your borrower, and timeshare industry makes a third of its profit off the delta between their cost of funds and what they charge on their uh uh financing. So it's only smart to set your cap to make the customer happy, which is where you started all this discussion. That's Crystal Dahan said, make the customer happy and everything else will follow. We've learned it, but we've had to go through a few trials and tribulations to get there.

SPEAKER_02 20:22

Well, we've seen a lot of mergers in our time in the vacation ownership. I mean, when I first entered the the forum, it was all independents. Now you've got the big brand that are big brands, they've taken over a lot of clubs and whatnot. As association, we feel we really have to look at the small independents because they're on their own a lot of times. They don't have the budgets, they don't have the money, the resources uh to do it. So, what do you would you recommend for those small independents so that they can stay in the flow and keep protecting their owners, especially when they are legacy resources and they're sold out and they're just being operated by their HOAs, which is not sometimes aware of all the industry's changes and services that are now available to provide better service and better experiences.

SPEAKER_03 21:08

Absolutely. And you know, Arta hasn't forgotten about the the the little developers and HOAs uh by by any means. But you're right, the big boys uh uh that dominate timeshare sales and development are U.S. public companies. Uh they used to be owned by hotel brands, but now I think every one of them, or almost every one of them, uh is a separate public company from the hotel brand that birthed them and they operate under a license to use the brand. But I think that's been good for the little guy because we have very informed public companies who have the highest disclosure standards, who have shareholders that they have to keep happy, and they have learned, we have learned, again, keeping the customer happy keeps your stock value uh Up keeps the analysts happy, keeps the regulators happy. That's the recipe for success. The little guys should come to Carta meetings. They should come to ARTA meetings. I think we're still doing two each year, in which we bring board members in. We put scholarships for some of them that can't afford the travel or the registration. And we teach them about the laws and processes and services and best practices that their associations and their management companies should be following. I think it's one of the most important things that ARTA does. I know you attend those kinds of meetings as well as and you come to ARTA meetings. I think the little guys should attend. And if they're not sure whether what's going to be offered them there or why they should, uh please, by all means, reach out to Carta. Reach out to ARTA. Talk to uh if you go to our websites, ARTA.org, is it Carta.org?

SPEAKER_02 23:21

Yes, it is. Canadian RTA.org.

SPEAKER_03 23:23

CanadianRTA.org. And uh in the U.S. it's arda.org. And you'll find a rich source of information, you'll find uh the ways to get a hold of the live people that can help you understand what these associations offer, what our conferences offer, information, training, um, relationships. Uh it's priceless for the small independents. And by the way, the chain is only as strong as its weakest link. And if we don't keep those small associations healthy, um, it's our product is not going to be totally healthy. And we know that too.

SPEAKER_02 24:06

Yeah. Well, there's over 10 million families in the United States alone that benefit from our product, and we haven't seen a drop yet. So I think even with the influence of AI coming in the picture right now and so forth, how do you see, just to finish off, how do you see the industry going forward in the next few years?

SPEAKER_03 24:24

Well, you know, we have moved from uh in the US from an almost completely deeded single-site product through a multi-site um um uh centrally central reservation system managed product into trust products. The laws have kind of grown with them, but AI is a wild card uh that we're all trying to catch up with. Uh fortunately, uh we're not we haven't been caught completely flat footed, but I don't think most people, including the my business, the law business, uh most big law firms are dedicating enormous resources to learning how to use AI to benefit our clients, including our shared ownership clients. But we are still moving fast, and I can't quite see the rim of the hill we got to climb to get there. So I think AI and questions surrounding what it's going to mean for our customers, our owners, our developers, and uh is it going to improve the way we sell timeshare? I think so. Is it going to improve the way people can use their products? I think so. Uh and we're we're gonna continue to see some more consolidation in the timeshare industry. We're gonna see uh more um melding together of the um timeshare-based product, the exchange, and all the ancillary uh partner services that make up the very exciting shared ownership industry. Um the one thing I can tell you, I I think there will always be an Arta, I think there will always be a CARTA. Uh we will always be working together with our sister associations in Mexico and elsewhere, and we will always be putting the customer first, just as we all learned from Crystal De Han a long time ago.

SPEAKER_02 26:22

Rob, I can't thank you enough. Every time I get an opportunity to talk with you, and I sincerely mean it, I pick up something. You've been a great source of the city. I'm gonna buy you drinks later. And I will I will take you on there. So I thank you everybody again for taking time to watch our podcast this week. Um, having a guest like Rob Webb, I'm sure anybody can pick it up. If you have any comments, any uh observation, if you'd like to get some more information, just uh fill up on the comments below. And uh it was great talking to you and looking forward to talking to you on the next podcast. Have a great day. This episode is brought to you by Hama Campai, the first vacation ownership project on the northern coast of Ecuador.