Timeshare as a business model is sound but as the economy recovers and new timeshares get built I'm wondering if the developers will make any changes.
Is it possible that the almost universal use of very expensive marketing methods goes the way of the Dodo birds. What would developer prices be like if the end user didn't have to pay for all of those gifts and all of that commission.
That would require serious market disruption.
The problem is that the timeshare product is designed for and is a "good investment" for a very small subset of the population. The money opportunity involved for a developer is extrodinary (selling the same condo up to 104 times, at ~8k take home after selling costs/interval (or ~$832k)). (Figure they sell for ~$10-15k/interval and about 1/4 of the costs are commission and marketing). This means that a condo that could normally be sold for ~$250-300k is selling for over 3 times normal selling price.
With money like that involved, you would want as many customers buying as possible (even if it really isn't the right product for them).
To make it even more interesting, (and while my information is limited), there seems to be certain "developers" who are going on EBAY (and via other sources) and buying up majority stakes in properties for next to nothing, taking over boards and then selling some of their stakes in those properties (probably at high prices), while collecting management fees etc...
Until consumers become more educated about their needs and financial abilities and understand the details of the product they are buying, this model won't go away, there is just way to much money involved.
