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What should the real cost of a developer timeshare week be?

Mongoose

TUG Member
Joined
Mar 15, 2012
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Location
Colorado
Resorts Owned
Hyatt Pinion Pointe, Hilton The Bay Club, Worldmark
I have purchased all my timeshares on the resale market. I understand there is great value to some people on buying from the developer. That being said the costs the develop charges seen excessive. If you look at a week at a Marriott or Hyatt that costs $30K from the developer which is used for development of the property, what do you think is the actual cost of development for that week vs what they charge? If resort cost $250,000 per room to build, the avg week cost seems like it should be in the range of $5K. Is the rest all profit and commisions?
 

mcsteve

TUG Member
Joined
Mar 23, 2014
Messages
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Location
Ontario, Canada
Resorts Owned
HGVC Elara - Las Vegas
Southwind, Egret Point & Waterside by Spinnaker - HHI
Vacation Village @ Weston
I think what many neglect to see is the investment the developer makes into the properties marketing and promotion as well as the ongoing costs during the sales process. The resale market does not really deal with those costs and the costs we incur when reselling are no where near the scale of a developer.

Taking your scenario of a unit with an upfront cost of $250k (or $5k per week), what are the additional costs? There will need to be a marketing budget for the call centres, sales people, administration, ongoing maintenance until all units are sold, the staff of the facility for the inventory until all units are sold... you get the picture. I don’t pretend to know what these numbers are but, based upon the presentations I have been to, the costs can be quite large as some developers are quite elaborate. As well, selling these units goes on for years.

I have a friend with 2 sons in the home building industry. They allocate $30,000 to each home just for marketing, promotion and carrying costs. Selling costs are above that and they are a small builder in the market. I couldn’t imaging the costs associated with a development of units in the hundreds.

So I guess my best response to you question is that, I paid HGVC $30k for my Elara TS back in 2014 and found out later I could have found better in the resale market. I think I did OK at the time, some people need to pay developer prices in order for this industry to exist. Will I pay developer again? Not likely (I never say never as you don’t know what the future holds) and will focus on resale for my additional needs. Just as I purchased my 1st new home from a developer. The 3 homes since have all been resale homes for a wide variety of reasons.
 
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