Organization Hotels and Lodging Houses, on Membership Basis

SIC 7041

Industry report:

This category covers lodging houses and hotels operated by membership organizations for the benefit of their constituents, not open to the general public. Commercial hotels operated by such organizations are classified in SIC 7011: Hotels and Motels and commercial rooming and boarding houses are classified in SIC 7021: Rooming and Boarding Houses. Residential homes for the aged and handicapped are classified in SIC 8361: Residential Care.

The organization hotels and lodging houses industry includes establishments such as boarding houses for members of organizations, fraternity and sorority houses, residence clubs, and rooming houses operated by private clubs. Commercial hotels, public boarding houses, and residential homes for the aged are classified elsewhere.

Membership lodging establishments existed in the United States from the founding of the nation. For example, the first fraternity, Phi Beta Kappa, was founded in 1776 at William and Mary College. The first sorority, Kappa Alpha Theta, was instituted in 1870 at Depauw University. A plethora of other not-for-profit organizations that offered boarding facilities emerged during the twentieth century. The Young Men's Christian Association (YMCA), for instance, started its U.S. chapter in 1851 and grew to more than 13 million members by the early 1990s. By the early 2010s, "the Y," as it was commonly known, served 21 million people in the United States. Likewise, American Youth Hostels, which provided inexpensive travel lodging nationwide to its members, had over 100,000 members. With the population aging, organizations like Elderhostel (renamed Road Scholar in 2010) have also become popular. Here people 55 or older pay a fee to join, then take advantage of numerous study trips around the United States and the world. Most of these trips involve a classroom or field trip environment.

One of the fastest growing sectors of this industry during the 1980s was commercial vacation travel clubs. Members of these organizations often paid an annual fee and received access to private vacation facilities or special travel packages. A proliferation of travel and vacation membership clubs during the 1980s boosted the number of industry participants to about 2,500 by the late 1980s with revenues reaching about $350 million. The industry suffered during the recession of the late 1980s and early 1990s, however, as vacation and travel industry revenues plummeted. Several companies folded and industry profitability withered. In 1998, there were an estimated 1,655 establishments in the industry with 10,200 employees. In 1999, $490 million in revenue was reported, an almost 9 percent increase from the previous year.

The industry suffered again during the economic recession of the late 2000s. By 2010 there were 2,289 establishments operating in the membership-basis organization hotel industry, according to Dun & Bradstreet's Marketing Solutions. Together these companies employed 23,109 people and generated $849.9 million in revenues in 2009.

Timeshares were developed in Florida in the mid-1970s. Investors in timeshares buy a week's time at a particular resort, then pay extra to join an "exchange" club. The ability to exchange vacation time with other affiliated resorts heightened the appeal of the timeshare concept. In the early 2010s, the largest operators of timeshare vacation properties were located in Orlando, Florida, including Hilton Grand Vacations Company, which had about 150,000 members and timeshare properties in California, Colorado, Florida, Hawaii, Nevada, and New York as well as Canada, Mexico, Portugal, and Scotland; Marriott Vacation Club International, with 390,000 members and 50 timeshare resorts around the world; Starworld Vacation Ownership Inc., a subsidiary of Starwood Hotels & Resorts; and Wyndham Vacation Ownership, which had about 155 resorts in the North America, the Caribbean, and the South Pacific. Las Vegas, Nevada-based Diamond Resorts Holdings was also an industry leader, with 160 resorts in 25 countries.

Leisure and hospitality industry job opportunities were expected to increase significantly through 2012, according to the Bureau of Labor Statistics, with most occupations growing in number by roughly 17 percent. Total employment for all industry sectors was projected to increase 14.8 percent.

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