Has Timeshare Lost Its Message?

March 4th, 2010

"It's The Savings Stupid" - The Right Message for Timeshare

Any of the numerous published histories of timeshare will tell you that, at some time during the 1960’s, a developer in the French Alps began selling the first of what would become known as “timeshares.” His message was sticky – within 10 years over 1,000 timeshare resorts had opened across the globe. Just what was his message? In researching this post, I found it often misquoted; omitting the last, and most important two words. Here’s what he said:

“stop renting the room and buy the hotel – it’s cheaper!”

During the last decade, Resort Developers have introduced dozens of new timeshare products, and dozens of new timeshare sales pitches: We now have myriad points-based ownerships available, “Vacation Clubs” and now “Vacation Trusts”, new classes of ownership like Gold, Silver, and the almighty Platinum. While these options might be appealing (like watching Wall Street Warriors in 2006) they are expensive luxuries: they do not save you money. Without the benefit of being “cheaper,” timeshare quickly looses its relevance (like watching Wall Street Warriors in 2010.)

Many timeshare owners, and timeshare resale companies, tend to think that if the developers fail, those would-be buyers will flock to the resale market. Unfortunately, however, the timeshare industry has always been a “top-down” system: The developers with 7-figure budgets to do so, tour thousands of families each week, pitching them on the benefits of buying timeshare. Only one in ten will buy on-site, leaving 90% of the people who take timeshare tours and don’t buy with a thorough education in timeshare. These people share their experiences with their friends, and so on… The bottom line is that for timeshare to have a strong resale value developers must continue to educate new consumers, and sell new timeshares.

Right now the Resort Developers are struggling. In a recent interview, ARDA’s Howard Nusbaum stated that developer sales during 2009 plunged 40%. While the recession can be blamed for part of that decline, studies show that Americans are still vacationing – some even more than before. The logical conclusion is that vacationers just don’t see the savings in buying timeshare; it’s no longer the cheaper option. Its message has been lost.

Save Money by Owning TimeshareNow, this blog is obviously not the “Help Timeshare Developers Blog,” but as I’ve pointed out, the symbiotic relationship between Resort Developers and owners that want to sell timeshare, cannot be overstated. That said, here’s some real-world suggestions to make our product relevant again:

  • Return to the message that works, and resonates today more than ever: It’s Cheaper.
  • Give an honest pencil pitch that includes the cost of financing, maintenance fees, and exchange fees. (If the numbers don’t add up, LOWER the interest rate.)
  • Focus on bringing new owners into the fold, rather than inventing ever-more-absurd upgrades to sell existing owners (who don’t need or want them anyway.)
  • Stop berating timeshare resales – It’s irrational: A strong resale market for homes has not eliminated the market for new homes and communities. While I don’t think developers should endorse specific timeshare resale companies, simply remaining neutral about resales will show today’s younger, web-savvy buyers that you’re sincere. (When your sales reps are asked about resales on tour, using the word “scam” hurts you more than us.)

It’s not too late for Resort Developers to change course; the owners and resale market want you to succeed. The day’s of conspicuous consumption, of Platinum-VIP-Charter-Presidential-Upgrades are behind us, but I believe our best days are still ahead. Find your message again, show families a real savings, and sales will pick back up!


Entry Filed under: ARDA,Developers,Perceptions,Resale Market

2 Comments Add your own

  • 1. Glen G.  |  March 5th, 2010 at 12:47 pm

    Wow, way to tell it. Your description of ” points systems” is a real education for most timeshare owners. Kudos!

  • 2. Brooke  |  March 27th, 2010 at 2:22 am

    Good blog about timeshares and selling.

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