In all of our many threads about resale, retail, ROFR, buy backs, post card companies and more the basic theme is the large spread between retail - developer pricing for the use of a week or certain number of points in a system - and resale of those exact same use rights (ignoring any trumped up "VIP" or other ripoffs) on the open market.
How can developers successfully sell a vacation opportunity for $20,000 or more (often MUCH more) when, with the smallest effort, a buyer could buy the exact same use for under $5000 (maybe WAY under)? As the annual fees needed to run and maintain these resorts show they are not inexpensive to build or run. The developers are risking big money to create desirable places in good locations with virtually no guarantee of sales success. If viewed strictly as real estate and allowing for the extraordinary costs of sales the original amount a developer asks is not out of line while the resale values are equally out of whack and offer tremendous value to the savvy buyer.
The basic problem is that timeshares are a product searching for buyers rather than a product sought by willing purchasers. In an unfortunate turn developers found success in a sales model that didn't inform and create demand for timeshares but instead uses stealth marketing, hyped presentations and arm twisting to sell what is basically a great idea but at far too high a cost. The incredible success of that effort has been such that even times that never had any real value (mud weeks, off season in highly seasonal areas) were sold along side top value times many with equal ongoing fees. Even in areas that really did have year round value the concentration of far too many units has created depressed values there as well.
The end result is a resale market awash in owners desperate to unload an ongoing obligation they never properly researched and, in many cases, don't reach even the "standard" 50% underlying value. When a week goes on sale it isn't competing with a few others in the specific resort or group but against all resale offers from all resorts - a low bar for pricing that makes getting fair value (a nebulous concept as value is really only what others are willing to offer) for even the best resorts very hard to obtain. The never ending influx of new inventory - which often quickly converts to new resale offers - only helps push prices lower.
The weak attempts to prop up artificially higher prices - all smoke and mirrors that can disappear in a heartbeat, ROFR is one especially poor example - only help developers maintain the illusion that their inflated prices are legitimate while in a free market operating without interference and the steady influx of unneeded new inventory timeshare resales would most likely settle in at the underlying 50% of retail value a good resort seems to represent. But the model isn't likely to change anytime soon so we are stuck with it.
Since we cannot change the model nor raise the bar for resales the only logical thing to do is take advantage of one of the best examples of buyers market that ever evolved as so many here on TUG have figured out. It borders on insanity to purchase at retail pricing unless you fully grasp the loss of capital you will suffer and you feel the extra expense is worth it for the lifestyle an individual resort or system offers despite the high buy in cost. Purchased as a right to a guaranteed vacation at a resort or system you love can certainly be a legitimate approach - but don't be fooled into thinking you'll get the money back out as the likelihood of that is slim (but it certainly has been done in a limited number of cases - it is not the norm no matter what the brand name involved may be).
TUG and other timeshare sites have helped inform many about the value resale timeshares can be as well as the issues with all timeshares (problems with rentals, exchange, rising fees, etc). While there have been discussions about the faulty sales model in the past I think its time we review how we got to this state and how best to make informed choices going forward.
How can developers successfully sell a vacation opportunity for $20,000 or more (often MUCH more) when, with the smallest effort, a buyer could buy the exact same use for under $5000 (maybe WAY under)? As the annual fees needed to run and maintain these resorts show they are not inexpensive to build or run. The developers are risking big money to create desirable places in good locations with virtually no guarantee of sales success. If viewed strictly as real estate and allowing for the extraordinary costs of sales the original amount a developer asks is not out of line while the resale values are equally out of whack and offer tremendous value to the savvy buyer.
The basic problem is that timeshares are a product searching for buyers rather than a product sought by willing purchasers. In an unfortunate turn developers found success in a sales model that didn't inform and create demand for timeshares but instead uses stealth marketing, hyped presentations and arm twisting to sell what is basically a great idea but at far too high a cost. The incredible success of that effort has been such that even times that never had any real value (mud weeks, off season in highly seasonal areas) were sold along side top value times many with equal ongoing fees. Even in areas that really did have year round value the concentration of far too many units has created depressed values there as well.
The end result is a resale market awash in owners desperate to unload an ongoing obligation they never properly researched and, in many cases, don't reach even the "standard" 50% underlying value. When a week goes on sale it isn't competing with a few others in the specific resort or group but against all resale offers from all resorts - a low bar for pricing that makes getting fair value (a nebulous concept as value is really only what others are willing to offer) for even the best resorts very hard to obtain. The never ending influx of new inventory - which often quickly converts to new resale offers - only helps push prices lower.
The weak attempts to prop up artificially higher prices - all smoke and mirrors that can disappear in a heartbeat, ROFR is one especially poor example - only help developers maintain the illusion that their inflated prices are legitimate while in a free market operating without interference and the steady influx of unneeded new inventory timeshare resales would most likely settle in at the underlying 50% of retail value a good resort seems to represent. But the model isn't likely to change anytime soon so we are stuck with it.
Since we cannot change the model nor raise the bar for resales the only logical thing to do is take advantage of one of the best examples of buyers market that ever evolved as so many here on TUG have figured out. It borders on insanity to purchase at retail pricing unless you fully grasp the loss of capital you will suffer and you feel the extra expense is worth it for the lifestyle an individual resort or system offers despite the high buy in cost. Purchased as a right to a guaranteed vacation at a resort or system you love can certainly be a legitimate approach - but don't be fooled into thinking you'll get the money back out as the likelihood of that is slim (but it certainly has been done in a limited number of cases - it is not the norm no matter what the brand name involved may be).
TUG and other timeshare sites have helped inform many about the value resale timeshares can be as well as the issues with all timeshares (problems with rentals, exchange, rising fees, etc). While there have been discussions about the faulty sales model in the past I think its time we review how we got to this state and how best to make informed choices going forward.
Therein lies the problem. 
If the only people who bought timeshares (or other expensive purchases, mostly made on credit) were those who would really use them and enjoy them, there would not be so many wanting desperately to resell and getting bled in the process.