- Jan 10, 2008
- Reaction score
- Amsterdam, NL
Trust products are a double-edged sword for both developers and buyers. They have some real advantages from a sustainability point (in my opinion) as the default risk is spread out among a much larger base of owners/resorts.
- + Trust arrangements allow more control over the long term
- + Trust products allow nearly infinite packages to sell
- + Trust products allow a more stable sales cycle and infrastructure (not tied to the start/stop/finish cycle of individual resort projects)
- + Trust products spread default risks across a broader pool
- - Trust products are harder to manipulate pricing based on individual resort attractiveness (main lever is elevating number of points required for newer resorts but there is (some) pressure on this lever to avoid alienating current customers...I know many of the developers do it, but it always with lots of screaming).
- - Trust products require a more robust legal arrangement
- - Trust products are harder to sell as "deeded property" (which used to be a selling point for timeshares, but I think most consumers could care less at this point).
- + Trust products spread default risk across a broader pool
- + Trust products are able to be designed to better reflect supply/demand dynamics and seasonality (someone occupying week 52 in Lake Tahoe is not paying the same maintenance fee as someone occupying (mud) week 18)
- + Trust products allow greater resort diversity and usually more flexible vacation lengths (points overlays also allow this, but not to the same extent as a true trust product)
- - Trust products entrench developers more and reduce owner rights/powers
- - Trust products spread resort costs across a broader pool (this can be a win or lose depending on what resorts you actually vacation at)