Timeshare Developers & Resale Companies: a Family Feud

September 28th, 2009

Much like the legendary Hatfields and McCoys, resorts developers and timeshare resale companies have long had a tumultuous relationship. Developers fear losing sales to the resale market, and resale companies need to deliver buyers to satisfy their clients. Unfortunately, the casualty of this feud is usually the consumer.

If either side actually wins the battle, then both lose the war: If everyone buys resale, the inventory of available units will eventually run dry. If all timeshare sales are made by developers, consumers will tire of a product that, once bought, cannot be sold.

This is a complex problem, with no easy answers. Developers spend a fortune in marketing to bring in qualified families to tour the resort. Salespeople must then deliver an average of ten convincing presentations to make one sale. If, after closing, the new buyer stumbles across a lower priced resale and contacts the resort to cancel, how should we expect the developer to respond?

A staple of most timeshare sales presentations is the pencil pitch, where the salesman compares the cost of 20-30 years of vacations in hotels to a timeshare purchase. The closing line to this usually involves asking the prospect which they’d rather end up with: the ‘box of receipts’ from hotels stays, or the ‘deed’ to the timeshare. Buyers will choose the deed. Once the timeshare is no longer being used, owners naturally expect to be able to sell. Since most resorts don’t offer resale programs, the owner must now hire a resale company to market the timeshare. Effectively marketing the timeshare involves positioning it in front of the same prospects the resort has toured; and round and round we go.

Once the developer has lost a few sales to the resale market, the battle begins. Countless lawsuits, injunctions, and notices to ‘CEASE and DESIST’ have been served to resale companies, for simply doing their job correctly. Should these prove ineffective, developers may raise ‘fair use’ issues, attempting to prevent owners from using photos or descriptions of the resort in their attempts to sell. The developer’s last line of defense, and sadly the most effective, is simply referring to all timeshare resales as ‘scams,’ a tactic that has scared off countless resale buyers.

Resale companies, for their part, have not always turned the other cheek. Unethical salespeople will sow the seeds of dissension amongst the owners, hoping to sway some to sell. Companies that have been on the receiving end of a developer’s ire will retaliate through litigation, or public relations campaigns, that actually damage their client’s resale values. This type of dog-eat-dog aggression doesn’t help either side.

Competition can also be a good thing. Creative resort developers have introduced new products that consumers want, and that are unavailable resale. Many of the popular ‘points-based’ ownerships don’t transfer all privileges at time of sale, giving the developer a second bite at the apple. Ethical timeshare resale companies have developed marketing techniques that are respectful to developers, but still get timeshares sold.

When resale companies and developers acknowledge their symbiotic relationship, and put owners first, the family feud should end; fading from our collective memories until eventually becoming the stuff of legend.

Entry Filed under: Developers,Perceptions,Resale Market