A timeshare is a form of vacation real estate with shared use rights depending on the type of ownership. The property, usually a resort unit, is sold as partial ownership or lease, wherein multiple parties may use it for a specific period. With this business model, the timeshare industry has faced many issues with the owners and lessees.
Given the customers’ experience in unduly sales strategies, going out of the agreement, reselling their rights, private groups like Timeshare Exit Team, TimeShatter, and Timeshare Freedom Group were the best agencies they sought help from. Although the beneficial impact of these groups was not visible to the actual operations, they continued to help maintain fairness and credibility in the industry.
Meanwhile, other companies such as Airbnb, TripAdvisor, and other related sites increased competition and had an unfavorable impact on its growth. Despite all these, it has remained a popular choice among many individuals, particularly those who prefer vacationing and enjoying a predictable setting every year.
As the pandemic took its toll, the timeshare industry was deemed as non-essential. With the implementation of quarantine measures, it immediately felt the effect of the market disruptions and hit rock bottom. But as the economy reopens with increased vaccination, its recovery may speed up in the second half of 2021.
An Overview on the Timeshare Industry
In its recent report, Kenneth Research presented an updated report and projection for the timeshare Industry for 2021-2030. The discussion highlights the strategies adopted and to be adopted by businesses globally. Amidst the economic slowdown, the estimation shows that China, India, Japan, and South Korea will have the fastest recovery among Asian countries. Meanwhile, Germany, France, Italy, and Spain were massively hit at the height of the pandemic but could bounce back by 25% at the end of FY 2021. This is deemed logical as pent-up demand for outdoor activities such as vacationing and travel and leisure may stimulate growth in the industry.
Likewise, the US market shows swift recovery. As the US Bureau and Economic Analysis and US Census Bureau mentioned in their May 4, 2021 release, the US International Trade has regained its footing as monthly exports rose from $12.4 billion to $200 billion. However, its year-over-year value remained lower by $7 billion. Moreover, monthly imports jumped from $16.4 billion to $274.5 billion, with a year-over-year increment of $20.7 billion, resulting in a negative net export.
Nevertheless, it shows the economic recovery, which may directly impact various industries and create a considerable demand for Timeshare products and services. Note that the vaccination and reopening continue as Summer approaches despite the upsurge in new cases, which may help the industry recover faster. As posted on Morning Consult, the survey conducted last March showed that 63% of Americans were excited at the thought of vacationing once the economy fully reopens.
Common Terms Used in the Timeshare Industry
It pertains to the benefit that the members or owners enjoy under lease or Right to use (RTO) programs. It gives them increased or extended access to the amenities compared to the original stipulation in their plan. For example, if a member can utilize it in one week per year for 20 years, they may accelerate it to two weeks per year for ten years.
This is a benefit that timeshare owners enjoy regardless of the type of plan or program. It comes either in reduced rental rates or free weeks to offset its operating costs and expenses.
Cooling Off Period
Also known as Rescission, it refers to the specific period that allows the recent buyers or owners to cancel the agreement without incurring costs and penalties. It aims to protect the customers, especially those who may have entered into a contract due to unduly sales and marketing strategies. Note that even if it varies from three to fourteen days, the resorts follow specific general guidelines depending on the state or country. With that, buyers must consider seeking assistance from lawyers to check the agreement and other documents.
Many owners prefer this plan due to the flexibility it offers, especially in times of unexpected vacations. Unlike a fixed week timeshare, wherein owners can only use the amenities for a specific week or period annually, a floating week timeshare may decide to use their right within a particular season. It may work in two ways, depending on the resort’s implementation. First, floating weeks may be based on fixed rotations or schedules among owners yearly. Second, the owners may work with their co-owners on a rotating basis per year.
Point-Based Vacation Ownership on the Rise?
“In all honesty, timeshares have never been something that caters to my lifestyle as a millennial, but renting them when available like Airbnb style may be something that caters more to my traveling needs.” – Elianet O. on Linkedin
The Timeshare Industry And Its Appeal To The Millennials
The estimation remains optimistic as point-based vacation may grow substantially for the following years, given the increased adoption of timeshare among millennials. Despite the major shift amidst the pandemic and increased competition with other hospitality businesses, the industry catches up with them and captures more demand. Due to the rising traction among the younger population, flexibility in decision-making, access to VIP weekends, locations, and luxury accommodations, sales may increase. The thing is, the timeshare industry continues to evolve as the millennials start to outnumber the baby boomers.
Diamond Resorts, a subsidiary of Hilton Grand Vacations, is a good example, given its current focus on experiential vacationing, innovative technology, and personalization to attract millennial travelers. Those aged 24-39 comprise its fastest-growing membership demographic with a 25% year-over-year increase in 2016-2020. A survey posted on Business Insider adheres to it as it shows that millennials aged 18-34 are willing to spend at least $5000 and an average duration of 35 days on vacation yearly.
The Future of Timeshare-Recovery and Growth in North America
North America occupied the largest market share in the timeshare industry in 2018. Some of the key factors that drove its robust growth include social sharing with higher demand for travel and leisure in recent years and the increased health and wellness travel across the region. Despite the disruptive effect of the pandemic, gradual improvement has been observed, which sped up as the vaccination and reopening of borders continued. HVS expressed optimism as it projected the industry’s recovery and growth in 2021-2024 in terms of sales volume, with 2019 as the base year. It remains in line with the anticipated growth in the 2018-2023 period as consumer preferences evolve. The inflows of tourists in different regions and increased consolidation and M&As of large businesses further fortifies its potential.
Things To Consider Before Purchasing A Timeshare
As we observe how the industry remains appealing amidst increased competition and changes in customers’ preferences, one must weigh the pros and cons of purchasing one. He must consider his financial capacity, priorities, and schedule. Moreover, it’s important that one reaches out to the appropriate groups and agencies to fully determine his rights and obligations before signing a contract or before his cooling-off period closes.
Contact TimeShatter today. We help you get out of your timeshare contracts. We believe you deserve a fair chance to get out of your predatory timeshare contract so you can vacation when and where you want.
Frequently Asked Questions
Since most outdoor activities are restricted, the timeshare industry is still deemed non-essential. Hence, it continues to face disruptions in the overall operations as demand and sales plunged by more than 50% in 2020.
Currently, the major timeshare companies are Hilton Grand Vacations Club, Disney Vacation Club, Marriott Vacation Club Destinations, WorldMark by Wyndham, Wyndham Vacation Ownership, Hyatt Residence Club.
A timeshare guarantees a more comfortable and predictable vacation setup, leisure maintenance, and larger units. Whether a timeshare is worth it or not depends on one’s availability and financial capacity to utilize the perks of his membership and cover the corresponding costs.