Recessions effect on on t/s sales

[mishugana]

Do you think there will be less promotions and higher income requirements on tours?

 

[Bill4728]

I read something on Street talk which said that one TS system was going to have a tour requirements of a 700+ credit score. That will exclude a fair number of people.

 

[rickandcindy23]

Can you imagine giving these scumbag timeshare tour people your social security number? I would never give them such private information.

Can they check your credit some other way?

 

[Talent312]

Since when were they ever worried about whether or not someone could afford to buy?

But, if their finance dept. insists, they may simply require certification of more income, better income/debt ratio or higher personal net worth.

 

[e.bram]

NO. the higher the credit score the smarter the person(on the average) hense less chance they will be sucked in by the developer.

 

[Kola]

Do you think there will be less promotions and higher income requirements on tours?

Of course there will be less promotions and fewer tours. Some sales offices are being closed. See below:
http://www.bizjournals.com/orlando/stories/2008/10/13/daily44.html

K.

 

[tome64]

There has to be more than a few TS owners who are facing foreclosure on their homes due to the subprime lending fiasco going on.
What happens when they walk away from their monthly payments and/or maintenance fees for a TS? If they can't pay for their house I doubt they would stand behind a TS obligation.
If this would become epidemic, what happens to the other owners? MF's go soaring? What good does the Owners Association do by taking over the TS?
Hope this industry doesn't get caught up in the current ecomonic mess!

 

[tombo]

Hope this industry doesn't get caught up in the current ecomonic mess!

It has already happened, and there is no sign that the timeshare situation won't get much worse before it gets better. Like the banks, some resorts and some timeshare chains might not make it until times get better. Unlike the banks, I don't see the government bailing out any timeshares or timeshare owners.

 

[Mel]

Many of those homeowners who are in forclosure will not have paid off their timeshares. Depending on how the sales contracts were written, it might not be so bad for the HOAs (though the HOA is who will get hurt if the timeshare IS paid off).

For all those folks who financed their timeshares, they are making monthly payments to the developers. They owe much more to the developers than to the HOAs, and the developers probably have terms that will allow them to forclose sooner than the HOA. Thus the developer takes title to the unit, and the developer is responsible for the annual fees - not such a big problem for the HOA, except that the developer is back to having a bigger stake in the property.

If the HOA forcloses, the developer no longer has the unit to sell again - the HOA does. And the HOA can afford to sell the unit for the prevailing true market value, because all they have to absorb is the back maintenance fees - not the $20,000 that was still owed on the loan.

As for the OPs original question, I would expect the minimum income to go up, but no credit score requirement. Few people are going to be willing to let the developers check their credit until AFTER the tour (when they make their mistake and buy). Of course, I don't recall them ever checking our income, other than what was stated, and don't know how they would go about doing that either, without express permission.

We have been on 2 local tours in the last month, one to a resport we stayed at 5 years ago (and toured then too). We have noticed some differences in the way they are selling - pushing the value of owning a local timeshare, not pushing the idea of trading nearly as much. The tour we went on this weekend, the salesman was clear about the ability to trade for anything "available" and noted that listing in the book don't mean the units are available. Vacation Village was offering their "gold card" as part of their "first day" incentives, and indicated that your children would be eligible for their own gold cards when they turn 18 - this allows access to the amenities year round, not just during usage. Of course, if you can find a resale of one of their original units, you might have similar usage written into the sales contract - now they "sell" that as a separate bonus.

We did meet a man at "Oak & Spruce" who owns one unit there, and always trades it, because he lives 20 minutes away. He figured his annual fees were less than membership in the YMCA, and he gets similar benefits through using the amenities on a pretty much daily basis. If there was a resort with decent amenities that close to our home, we might consider such a purchase too. The sales offices know this, and maybe we'll see more of them market the resorts along those lines - local use, plus an annual vacation thrown in.

 

[Mel]

We got an offer in the mail yesterday to tour yet another resort in the Berkshires, this one from Windham for their Jiminy Peak resort.

We've always been on various lists to get offers, often for resorts in Orlando and Williamsburg, and some of the other really popular areas, but lately we're seing a bigger push from local resorts - maybe they are trying to market more to the local crowd.

The other think I noticed was the income requirement - their offer is only available with a family income over $70,000! Maybe they're starting to get realistic about who can afford to own a timeshare given the prices they're asking, or at least who is more likely to believe they can afford it, and thus might consider purchasing.

 

[london]

Recession and Timeshare Developer Sales

Marriott, Starwood, Hyatt, and Hilton are predicting sales to first time buyers will be down 20 to 25% for 2009.

Resale weeks are at their lowest price point in years.

The price decline will continue for some time to come.

 

[bizaro86]

I wasn't familiar with US average incomes as a Canadian, so I looked it up. It appears that a 70,000 income cut-off will exclude many people. More than half, in fact, since the median US income last year was 58,480 according to this site: http://www.data360.org/dsg.aspx?Data_Set_Group_Id=867

Of course, people who buy timeshares probably have higher than average incomes. (Or at least people who can qualify for and then successfully pay off a timeshare loan probably do.) It would be interesting to know the median income of people who purchase from the developer.

Michael

 

[AwayWeGo]

What's Not To Like ?

Timeshare prices tanking.

Dollar strengthening.

Exchange value of SA rands heading south.

Is This A Great Country Or What ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[Patri]

The other think I noticed was the income requirement - their offer is only available with a family income over $70,000! Maybe they're starting to get realistic about who can afford to own a timeshare given the prices they're asking, or at least who is more likely to believe they can afford it, and thus might consider purchasing.

I guess that's so they can counter, of course you can afford this, you make over 70 grand. One argument down the tubes.

 

[moon314pi]

Pretty Sweet.

 

[laynemiller]

I just returned from a quarterly meeting of a HOA board, which has just foreclosed on 55 time share owners (A number not very high compared to total owners.) If added to the current number owned by the HOA, the board decided to offer the units to current owners for next to nothing, just to get the maintenance fees flowing again. The time share is in good financial footing but any budget can be improved. There is no indication the relatively small problem is being enhanced by the poor economy, but it could worsen if things don't turn around.

 

[Kola]

Economic woes squeeze time-share industry

Read all about the squeeze in today's Miami Herald

http://www.miamiherald.com/business/story/731058.html

K.