What's wrong with Timeshares and can the industry survive these issues?

[boyblue]

Here are four things that I believe are wrong with timeshares that if fixed could change things. There are other issues but if any one of these could be fixed, the industry might enjoy new life.

• Purchase price – Over and above a great return on investment for developers, buyers pay commissions for high pressure salespeople that are not exactly cheap. This is compounded by the unrealistic expectations of new owners.
• Maintenance Fees – In all fairness, MF is a function of use, so seasons are not considered when making the assessment, however when an owner is unable to use their week the seasonal difference becomes evident in terms of ease of exchange or rental.
• Divestment – When change of circumstance or need, occurs and the TS owner must sell, they are left to absorb an unfair portion of development cost. This dynamic is the main reason that TS’s now have a poor reputation.
• Resales – Overdevelopment in the most popular TS markets is a problem. These weeks now turn up everywhere and sometimes drive prices below MF. Of all the issues with timeshares, this one is probably the most difficult to fix.

I posted an idea a week ago that I thought would be helpful, I realized from the responses that we have some really knowledgeable owners. So why not think bigger, if we can come up with a fix to the issues there would be a blueprint to build TS that work equally for the developer and owner.

 

[TolmiePeak]

Why would developers want to decrease their cut of the pie? As long as there are new victims why should they care?

 

[bnoble]

Maintenance Fees

Point systems solve this, because MFs are charged on a per-point basis, and lower-season weeks cost fewer points.

Overdevelopment in the most popular TS markets is a problem.

"Developers build where they can sell timeshares" is a funny way of calling something a problem.

 

[dioxide45]

Developer timeshare sales are at all time highs and expected to go higher. So far their business model seems to be working. These same problems exited 20 years ago. Not sure anything now changes it.

 

[RX8]

I like your thinking but this isn’t something that “we” can fix. Only when people begin to refuse to pay developer prices, which amounts to thousands or tens of thousands of dollars for something that has no real value, will the developers begin to look at changes.

 

[boyblue]

Why would developers want to decrease their cut of the pie? As long as there are new victims why should they care?

If they were to set up a sales portal and offered units without the fees and promotions like free trips, paid to and through TS salesmen, prices could be much less without them giving up profit.

 

[bnoble]

Sure. People would just wake up and go looking for a timeshare one morning. That happens all the time!

 

[AwayWeGo]

Point systems solve this, because MFs are charged on a per-point basis, and lower-season weeks cost fewer points.

Maintenance fees are all the same regardless of demand season & points value at the 2 biggest points timeshares where we had or still have ownership.

Because of that, we just assumed they were all like that.

Good to know that some timeshares have lower maintenance fees for low-season units worth fewer points.

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

 

[boyblue]

Point systems solve this, because MFs are charged on a per-point basis, and lower-season weeks cost fewer points.


"Developers build where they can sell timeshares" is a funny way of calling something a problem.

Are all new developments doing Points based MF if so that is good news. Is Vacation Village doing this with their new sales? Overdevelopment is not a problem for us because half of those units will end up on the resale market but is that sustainable?

 

[boyblue]

Sure. People would just wake up and go looking for a timeshare one morning. That happens all the time!

Of course you'd have to advertise but I believe they're over 50% of the budget now - That's crazy!

 

[boyblue]

Developer timeshare sales are at all time highs and expected to go higher. So far their business model seems to be working. These same problems exited 20 years ago. Not sure anything now changes it.

Ok, so developers are exploiting the bottomless pit of fools, does this mean that other methods and models should not be considered?

 

[Passepartout]

Of course you'd have to advertise but I believe they're over 50% of the budget now - That's crazy!

Exactly NO ONE goes to a timeshare presentation intending to buy a timeshare! They ALL go to get the perks. The cheap show tickets or gift card, or more 'meaningless' points to add to their stash.

Timeshares are for salesweasels to sell, not for consumers to go searching to buy.

 

[boyblue]

Maintenance fees are all the same regardless of demand season & points value at the 2 biggest points timeshares where we had or still have ownership.

Because of that, we just assumed they were all like that.

Good to know that some timeshares have lower maintenance fees for low-season units worth fewer points.

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

Ours are like yours, and yes it's good to know that some resorts have adopted this new approach. That's a big deal. Any chance they will be able to change past contracts.

 

[boyblue]

Exactly NO ONE goes to a timeshare presentation intending to buy a timeshare! They ALL go to get the perks. The cheap show tickets or gift card, or more 'meaningless' points to add to their stash.

Timeshares are for salesweasels to sell, not for consumers to go searching to buy.

LOL does not do you justice, I actually laughed. But you're right of course, TS deals are like record deals back in the day, the artists never realized that they were actually paying for all of the glitz and glamour. At this stage I doubt developers believe anyone would buy a TS without it being forced down their throats

BTW apologies for the multiple posts, I wanted to respond to each comment and I gotta get used to the new TUG - it's pretty nice

So let's forget about what developers continue to do wrong. The question is what would be the features of a good TS? I love the new points based MF. Even though I understood that MF was based on use, and a week was a week, so the fee was the same for all weeks, I don't have an issue with points based fees.

Are there any other new developments? Any developers posting their ROFR value? Do they all at least offer some sort of ROFR?

 

[easyrider]

To me, the business model of a fixed deeded week has too many problems for owners. Vacation club memberships with multiple destinations are more flexible and appealing. So the fix is changing to points without joining an exchange company which means deeded timeshare resorts will need to merge with multi-destination type vacation membership groups which will give every owner more flexibility, imo.

Bill

 

[dioxide45]

Ok, so developers are exploiting the bottomless pit of fools, does this mean that other methods and models should not be considered?

If another business model was sustainable, it hasn't come along yet. You would think if one worked, someone would have come up with it.

 

[TUGBrian]

even 20 years ago everyone assumed that timesharing would die out as soon as resale/depreciation became common knowledge....

 

[boyblue]

To me, the business model of a fixed deeded week has too many problems for owners. Vacation club memberships with multiple destinations are more flexible and appealing. So the fix is changing to points without joining an exchange company which means deeded timeshare resorts will need to merge with multi-destination type vacation membership groups which will give every owner more flexibility, imo.

Bill

This would be great, especially if you're able to know what's available to you before you deposit.

 

[vacation911]

LOL does not do you justice, I actually laughed. But you're right of course, TS deals are like record deals back in the day, the artists never realized that they were actually paying for all of the glitz and glamour. At this stage I doubt developers believe anyone would buy a TS without it being forced down their throats

BTW apologies for the multiple posts, I wanted to respond to each comment and I gotta get used to the new TUG - it's pretty nice

So let's forget about what developers continue to do wrong. The question is what would be the features of a good TS? I love the new points based MF. Even though I understood that MF was based on use, and a week was a week, so the fee was the same for all weeks, I don't have an issue with points based fees.

Are there any other new developments? Any developers posting their ROFR value? Do they all at least offer some sort of ROFR?

I've noticed that while many resorts hold the Right of First Refusal (ROFR), very few actually exercise it, even in cases where the sale price is as low as $1, with the seller covering transfer fees and closing costs. This makes me question the motivations behind their reluctance.

In contrast, when it comes to deed-back options, many resorts charge hefty fees to the previous owner. This allows them to take the property back and resell it for tens of thousands of dollars—a clear win for their bottom line.

It seems the issue lies within the developer's business models. Why would they change a system that works so well for them? As long as it's making them money, there's no real incentive to make it more favorable for buyers. I doubt buyer-friendly changes are on the horizon when resorts can continue to profit this way.

 

[AwayWeGo]

ROFR is not the timeshare owner's friend. ROFR does not keep timeshare values up. ROFR does not keep timeshare timeshares from being sold for a pittance. ROFR just means that the timeshare company gets to buy bargain-priced timeshares out from under buyers who have negotiated low prices. The willing buyer says Yes to the low price for a timeshare but the timeshare company swoops in & grabs it up thanks to ROFR. The timeshare seller doesn't get a nickel more than the willing buyer was already set to pay. ROFR just saw to it that the timeshare company got the great deal instead of the ready & willing buyer.

ROFR = ROFL.

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

 

[boyblue]

If another business model was sustainable, it hasn't come along yet. You would think if one worked, someone would have come up with it.

The thing about genius is once the plan/system is introduced, we'll all say why didn't I think of that, like I can see Booking.com adding an exchange feature.

 

[Passepartout]

The thing about genius is once the plan/system is introduced, we'll all say why didn't I think of that, like I can see Booking.com adding an exchange feature.

Until the timeshare developers' get together and develop something like the 'used car' market for pre-owned TSs, it's not gonna happen. First, because there us no such thing as a 'new' timeshare. They are ALL used. And when buyers figure out that they can buy exactly the same produce for pocket change, THAT forces developers to pay salesweasels to lie, cheat, make impossible promises in order to 'earn' their insupportably high commissions.

If asked, I'd tell them to stop maintaining their properties. Force buyers, if they REALLY want nice properties, to buy new. Either make new- unsold units visibly better, or let those that lose value, deteriorate until all that's left is the underlying dirt, then scrape it off and start over.

Naturally, nobody's asked me.

 

[TolmiePeak]

Of course you'd have to advertise but I believe they're over 50% of the budget now - That's crazy!

Advertising and promotion is not 50% of the expenses for the timeshare companies. Building the resorts themselves is the largest portions of their costs. Just operating the resorts is expensive too. Cypress Harbour must have hundreds of employees to keep it in tip top shape.

 

[boyblue]

I've noticed that while many resorts hold the Right of First Refusal (ROFR), very few actually exercise it, even in cases where the sale price is as low as $1, with the seller covering transfer fees and closing costs. This makes me question the motivations behind their reluctance.

In contrast, when it comes to deed-back options, many resorts charge hefty fees to the previous owner. This allows them to take the property back and resell it for tens of thousands of dollars—a clear win for their bottom line.

It seems the issue lies within the developer's business models. Why would they change a system that works so well for them? As long as it's making them money, there's no real incentive to make it more favorable for buyers. I doubt buyer-friendly changes are on the horizon when resorts can continue to profit this way.

ROFR is not the timeshare owner's friend. ROFR does not keep timeshare values up. ROFR does not keep timeshare timeshares from being sold for a pittance. ROFR just means that the timeshare company gets to buy bargain-priced timeshares out from under buyers who have negotiated low prices. The willing buyer says Yes to the low price for a timeshare but the timeshare company swoops in & grabs it up thanks to ROFR. The timeshare seller doesn't get a nickel more than the willing buyer was already set to pay. ROFR just saw to it that the timeshare company got the great deal instead of the ready & willing buyer.

ROFR = ROFL.

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

Preventing an owner from practically giving away their TS is like trying to close the barn door after the horse has bolted. The goal should be to not want your owners to sell in the first place at least not out of frustration or dissatisfaction.

 

[AwayWeGo]

Until the timeshare developers' get together and develop something like the 'used car' market for pre-owned TSs, it's not gonna happen.

Maybe something like Walmart for newly deeded timeshare units, plus something like CarMax for resales.

Timeshare developer prices are too high.

Resale prices are too low.

So it goes.

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