Posts filed under 'ARDA'

Timeshare Resale in the 2010’s: The Decade of the Timeshare Owner

It’s safe to say that most of us in the timeshare industry are happy to close the door on the last decade. Though the Aughts (or the 00’s, or whatever) brought some advances to our industry, they carried over many of the same problems we faced during the previous century. Ultimately, over the last ten years, timeshare continued to be defined by resort developers; a paradigm that’s done a good job of selling ‘new’ timeshares, but has left many owners frustrated over their ability to sell once their needs change.

The ‘credit crisis’ of the last couple years has lead to developers scaling back their marketing, raising their lending standards, and even appealing (unsuccessfully) to Washington for a bail-out. During the same time, American families have begun borrowing less, saving more, and finding ways to do more while living on less. In the midst of this apparent turmoil, resales have quietly grown to represent a much larger share of the timeshare market. While many of these sales have been at prices significantly less than market value, the fact remains that more timeshare buyers than ever are choosing resales over developer inventory.

The Decade of The Timeshare Owner

Recently, ARDA reported that while hotel occupancy has been stagnant at 60%, timeshare occupancy has remained a strong 80%. One explanation that’s been suggested for this is that while most Americans couldn’t afford to vacation, timeshare owners that had pre-paid for their vacations were able to continue vacationing – because they could still afford it. As more mainstream news media and consumer advocates point out the disparities in quality of vacations, and affordability, that exist between owners and non-owners, American families should increasingly consider timeshare ownership as an alternative ‘vacation investment tool.’

During the ‘developer decades,’ the thinking went that, since timeshare’s value is so difficult to illustrate simply, it can only be explained in intensive, private sessions between potential buyers and a developer representative (i.e. the timeshare tour.) During ‘the decade of the timeshare owner,’ no high-pressure tactics are required to sell timeshares – the value proposition alone is enough to attract potential buyers. Developers can’t pitch timeshare solely on its value for one simple reason: the interest rates they charge on timeshare notes. With timeshare resales, not only are prices lower, buyers can choose their own financing, or just buy a timeshare for cash. In a resale scenario, the only reason to buy a timeshare is value: actual savings on vacations, and better quality vacations.

Proactive Owners are the Best Owners

Economic and societal factors may bring more attention to the value of timeshare ownership, but to fully realize the dream of ‘the decade of the timeshare owner,’ timeshare itself needs an image rehabilitation. If we continue to make developers solely responsible for this, as we have over the last two decades, then developers will continue to reap the benefits of an increasingly attractive product. If timeshare owners themselves will take an active role in shaping perceptions of timeshare, then they too can benefit from the image makeover.

It’s been said here on before, but it bears repeating: If you have a problem with your current timeshare ownership, address it with your HOA privately. The place to vent frustrations with your resort developer, exchange company, or resale provider is not on the internet – not if you care about: 1.) Your resale value, 2.) Your fellow owner’s resale values, 3.) Your exchange value, 4.) The company’s willingness to resolve the problem.

Looking Forward

If you own timeshare now, make it your commitment this decade to be a proactive timeshare owner. Make an attempt to attend HOA meetings. Tell a friend (or two) about why you like owning timeshare. Visit a travel website and write a complimentary review of your resort. At a time when American families are watching their budgets more than ever, timeshare ownership makes sense because of its value. When happy owners share their experiences with timeshare, and take responsibility for shaping perceptions, buying a timeshare resale will be the norm, rather than the exception – and posterity will look back on the next ten years as ‘The Decade of the Timeshare Owner!’

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1 comment January 9th, 2010

It’s Not Your Father’s Timeshare: Why Generation X/Y Will Buy Timeshare Resale

It never ceases to amaze me that timeshare is not sold primarily as a financial planning product. After all, the first timeshare sales pitch on record was ‘stop renting the room and buy the hotel – it’s cheaper!’ Saving money is why timeshare exists. Anyone who vacations 7 days or more, at least every 2 years, should buy a timeshare right now and start saving real money. Often, I think most of us would, were it not for the fashion in which resort developers sell the product:

Old School Timeshare 'Promotion'

Maybe I’m just a jaded member of Generation X, but to me timeshare presentations rank right up there with multi-level marketing conferences in terms of suckiness! From the ‘free gifts’ for attendance, to the first-day incentives only good now, and the strong-arm closing tactics at the table, who wouldn’t question the product’s legitimacy? Sadly, even buyers that wanted to purchase, and love their timeshares, often leave the sales floor feeling punch-drunk. If timeshare is so good, why push it so hard? As Lisa Ann Schreier astutely proposes, maybe developers ‘cling to the concept that timeshares are not a sought-after product. ‘

It should surprise no one that new timeshare sales are down, and it’s not all about the economy. Those of us under 40 just aren’t falling for the free breakfast routine. We won’t be pressured into buying something that costs $16,000 in the time it takes to watch a Tarantino film. We shop online, we want photos, prices, features & benefits, but most of all, we don’t want sleazy. Does this mean younger Americans are not meant to experience the many wonders of timeshare? Not in the least.

With timeshare resale, you can now shop online and look at thousands of timeshare properties for sale and rent. Most sites won’t require you to register or give your personal information, and the prices are listed right there on the website. Resale timeshares are no different than ones bought at a resort. Instead of negotiating with a slick salesman (behold the gold nugget watch) you’ll be dealing with the owner: an ordinary person just like you. Once you find a resort you like, consider renting a timeshare week and staying as an ‘owner-guest’ before deciding to become an owner.

Owning timeshare protects you from inflation, and other economic factors. A recent ARDA release indicates timeshare occupancy is 20% higher than hotel occupancy, as timeshare owners have much lower travel expenses. While there may be low-cost travel available today, the huge discounts won’t last long. If history is any indicator, hotel room prices will continue to rise, inflation is all but inevitable, and if you plan on taking regular vacations timeshare is a product that can save you thousands plus give you better accommodations. But please don’t take my word for it – do the math. If timeshare makes sense for you, the numbers will add up. Bay Tree Solutions - Timeshare Sales & Rentals

Interested in owning or visiting a timeshare? Start your online search today: Rethink timeshare resale.™


Add comment October 27th, 2009

Free Market Solutions for Timeshare Resale, Part III

This is the third installment in a 3 part series where we’ll examine the current push for regulation of the timeshare resale industry.

Timeshare as a Use Product?

As the timeshare resale market grows, problems will arise that neither an individual owner, nor a resale company, will be able to resolve. These include: maintenance issues at the resort, customer service provided by the resort developer, floating week functionality, and exercising ‘first right of refusal’ clauses to keep fire-sale priced timeshares off the resale market.

Over the years the American Resort Development Association (ARDA) has made enormous contributions to the quality and success of the timeshare industry. Recently, ARDA President Howard Nusbaum has stated that timeshare should be considered as a ‘use product,’ a conclusion with which I must respectfully disagree.

While in many ways timeshare is similar to a use product, like a car, it is real estate. Most timeshare ownerships are deeded either a week/unit at a specific resort, or a percentage of the building (common with points.) Timeshare is regulated by real estate law. Timeshare salespeople must have real estate licenses. Resort developers must file Condominium Documents, including Home Owner’s Association (HOA) documents, with the local government prior to beginning construction, and membership in the resort’s HOA is typically conveyed to the owner at time of sale.

Often owners I speak with are completely unaware that there is a HOA at their resort, and few, if any, have read their HOA documents. When owners keep their timeshare at arm’s length, by considering it a use product, they isolate themselves from other owners at their resort. Rather than working together to solve problems, these owners often vent frustrations on the internet, negatively affecting resale values.

If you own timeshare, I urge you to get involved with your HOA now! By addressing issues privately, with other owners at your resort, you’ll ensure strong resale values in the future. By accepting personal responsibility for the real estate you own, you’ll no longer have to feel victimized by your developer – you’ll have a voice.

The Demise of the Timeshare Resale Company

Often, it’s pointed out to me that, if owners take my advice, I’ll be out of a job as there’ll be no need for timeshare resale companies. – In fact, resorts with highly effective HOA’s are usually able to handle resale themselves, without involving a resale company. As someone who truly loves the timeshare product, I’ll be overjoyed when that day comes!

However, as long as owners struggle to make sense of what they bought, as long as owners need assistance in marketing their properties, and as long as the timeshare resale market struggles for its market share, I along with other dedicated professionals will be there to help.

Informed Owners offer Best Regulation

By becoming informed on matters affecting resale values, timeshare owners will be able to make the right decisions concerning their properties. Informed owners offer the best industry regulation available, without limiting resale potential through increased Government interference.

Add comment September 8th, 2009

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