It's an interesting idea, @Sapper, but as a potential investment, I'm not interested. First, we have to face the fact that the timeshare industry is swimming against the demographic tide. Our childen and grandchildren tend not to be attracted as we have been to re-visiting familiar places during their vacation time. They're more interested in eco-adventures, exotic locales, and getting deeply in touch with nature. I don't know what the average age is, for example, of the TUG universe, but I'm guessing it's well above 50 and perhaps well above 60.
Layer on top of that the devastating effects of COVID-19 on the timeshare industry and the crumbling business proposition begins to collapse. Yes, we all expect that travel will begin to pick up sometime in the next 12 months or so, but who knows for sure? And even when it does pick up, how long will it be before people really feel comfortable getting on a long-haul flight in a tightly-packed aluminum and carbon tube with wings to visit a place beyond driving distance?
Third--and not insignificantly--it's most likely the same demographic that owns most timeshare units (the Baby Boomers) who are both most vulnerable to the virus and likely most reluctant to jump back in to the deep end of the pool when it comes to long trips by plane to a vacation destination.
One thing I find interesting is that--as the travel companies (whether airlines, hotel chains, cruise lines) more deeply discount their services to past travelers, the deals seem to be getting better and better. I could be wrong, but I'm guessing the reason that's happening is that earlier enticements weren't enough to get people to sign up--even when such deals offer complete refunds if the buyers decide not to travel after all.
Finally as @Kal has pointed out, the value proposition for HRC has changed significantly--and has been markedly devalued by Marriott. I agree with you that Marriott is probably looking for a graceful way out as far as HRC is concerned--and we all have to hope that if Marriott does decide to spin it off, we don't wind up in the hands of an even more opportunistic and rapacious owner like DRI (heaven forbid).
I applaud your out of the box thinking, but throwing good money after bad is not something I want to do--and I'm afraid that's what we'd be buying if the owners tried to take HRC private.
Sorry for my delay in responding, work was very busy this last week. A good problem to have in these times, so was “making hay” so to speak. Thank you, WalnutBaron, for responding.
Maybe the twenty year old age group with some $$$ will travel to exotic eco locations, however, I suspect that as people start having kiddos they will want to change their travel plans to something more inline with what timeshares offer. Specifically, that is a known entity with more space than a hotel room at a reasonable cost in a nice location with family activities nearby. I say this because as a 40ish year old couple with two younger kiddos, this is exactly what we want. This is why we own two Hyatt properties. Unfortunately, it feels like MVC May be attempting to change the equation by increasing the maintenance fees. This hurts the “reasonable cost” factor above. I see the “next generation of timeshare owners” as a marketing problem. However, if MVC continues to increase cost, even good marketing will fall on deaf ears because the cost component will make the timeshare proposition a non starter.
Your second point is the reason I think MVC will be open to spinning HRC off. HRC is a pain in their side, and if they can make their books look better by spinning it off, right now they might be more receptive to the idea. That being said, any plan will need to make certain assumptions regarding an increase in unpaid maintenance fees and increased resale (at low prices) activity.
Third, agree, getting back into a narrow metal tube with a bunch of strangers and recirculating air is a problem. But we already accept the risk of hurtling through atmosphere that has such low pressure that you have only seconds of consciousness to get an oxygen mask on in the event of a depressurization at roughly 80% the speed of sound, not to mention the vehicle was probably maintained in the least expensive method that would pass an inspection and operated by one pilot because the other is taking a nap. No airline will ever hire me for marketing. Despite the risks, and headache of the TSA and irritated airline employees, we accept it. I think folks will get back on airplanes before we start piling on the floating petri dishes known as cruise ships (they don’t like my marketing either). I do think that people will want to travel, and because the floating Petri dishes may be off the table, time sharing will be an option.
Your fourth (and part of your fifth) point goes back to the “reasonable cost” factor. If a viable alternative to timeshares is available at a lower cost due to increased incentives, at least in the short term, it will negatively impact the timeshare market.
I don’t like throwing good money after bad either. Not that I have the millions of $$$ laying around to throw at this kind of project to begin with. So, for the most part, this whole conversation is just theoretical. However, sometimes an interesting viable idea comes from a fun theoretical discussion. Add to that I am nervous of the prospect of being tossed out of the frying pan of MVC into the fire of DRI. Creating a viable alternative for MVC would be a win / win. I am, unfortunately, coming around to the fact that the majority of the ownership would rather just pay their maintenance fee and enjoy their week than participate in the actual management of their owned weeks.
, After all, between HKB and HSH, those are the two main resorts they all want to trade into. And good luck with either!
