Though I don't disagree with your economics 101 theories, I do disagree on how you propose to 'save the market'.
I don't think you can have a maint. fee so low because then the resort will become 'old' and then they won't be able to rent at any price because it is run down.
This is completely wrong and I'll prove it.
1) If there is a hotel in the area that is operating at a profit, then there is absolutely no reason that a timeshare resort can't operate with a lower budget since it will have higher occupancy and guaranteed revenues in the form of owner maintenance fee payments. There is no reason a timeshare resort that does not have daily check ins, or daily housekeeping and has much higher occupancy rate should not be able to kill a hotel in the rental market.
2) If there aren't any hotels that are operating at a profit, then get a clue. That timeshare resort should be terminated. There is currently no mechanism for timeshares to die in most places.
If you force an HOA to take the deed back you are basically saying, 'sign this contract, but, you won't have to abide by it'.
WRONG. What the contract is saying is that the HOA is going to be accountable for ensuring that your resort has a non-zero value. That is a pretty damn low bar. If the HOA has the power to terminate the timeshare plan, just about any timeshare in existence today will get some positive value if the timeshare is knocked down and the land is used for something else like a new public storage facility. Those proceeds can be distributed to current owners. That would be the price floor. If a timeshare resort has a positive, non-zero value in a liquid market, why wouldn't they want to take it back? It is just profit for the HOA. Any other thought process diverts from this fundamental truth.
Moreover, if the timeshare unit had a positive value, why would the owner want to pay to give it back to the resort? They would want to sell it on the open market. If the HOA is providing that function, they can say put it into the resale program or rental program. IF the HOA is doing its job, the rental should earn a profit above the maintenance fees. That alone would encourage the owner to keep it.
I think your theories assume most people want to get out of their timeshares, which I don't think is necessarily the case.
WRONG. My theory assumes that HOAs should have the accountability for ensuring non-zero market value and liquidity for resales. I propose 2 timeshare acts that if adopted will naturally result in liquidity in timeshares. If a resort has positive value and is liquid, then if people want to keep it, they can. Just because IBM stock can be bought and sold any trading day of the week does NOT mean that everyone wants to sell it. It just says that the day you want to sell it, you can.
My thought to fix the market is to let the market work. If the gov. get's involved and forces HOA's to take back deeds, then you will for sure blow the market up and timeshares will be a thing of the past. That for sure will hurt more people than the maybe 15 - 20 percent who are stuggling with their timeshares now. (and that 15 - 20 percent is just a number off the top of my head....I can't imagine it is higher than that)
WRONG again. For the market to work, market mechanisms must be in place. There is no market maker in timeshares. PCCs and eBay do it because not enough other parties are doing it. I claim the HOAs should be mandated to do it.
Two mechanisms that would make it work are the ones I am advocating. Since I am not running for office, I can tell the truth. The truth is that if HOAs don't take deedbacks, then they will die a slow death and end up taking the deeds back anyway. If timeshares aren't allowed to die, then the entire industry will die a slow death.
If you think I am saying this because I have a vested interest in it, let me assure you that there is a ton of money to be made in dying industries. I spent a lot of time in the Telex business in the 80s and 90s. If you think back then, fax had taken over and there was nobody in their right mind who thought telex was a business that should not die. As a result, there were no competitors and margins were extremely high. I am saying this because the timesharing industry has a huge problem and without sweeping action, it will die a slow death.
I dunno, maybe the burry your head in the sand mentality. 
