The timeshare industry along with the fleet of the entire global economy sailed unknowingly into the financial storm of the 2008 financial crisis. This left many businesses sinking into the dark crushing depths of uncertainty. Those businesses and industries that did not sink were now struggling to stay afloat, burdened with a financial weight that they could not support; they collectively jettisoned millions of employees. Those millions of the newly unemployed were left adrift in a financially empty ocean abandoned in the vast nothingness.
The timeshare industry has arrived in the abandon ship era
The flagships of the timeshare industry such as Marriott, Wyndham, Starwood, Hilton, Disney, Bluegreen and Silver Leaf managed to remain positively buoyant. However, smaller companies of the primary timeshare market had been less able to navigate the storm, and a number had succumbed to bankruptcy. Many timeshare members were and are still desperate to sell timeshares and leave the timeshare industry altogether. Effectively the timeshare industry had arrived in the abandon ship era, with a large amount of timeshare members throwing their timeshares overboard, and others simply jumping overboard to escape a financial anchor and a doomed ship. During the attempted mass exodus numerous timeshare members were ambushed by scam and fraudulent timeshare resale and timeshare relief companies. Pirates who caught many in the industry off guard who roamed unchallenged tarnished the industry name and stole $100,000s from timeshare members and the timeshare industry itself.
Timeshare as a luxury item and a risky lifestyle investment
Make no mistake that today’s consumer eyes view timeshare as a luxury item and a risky lifestyle investment in a time of still turbulent seas. Also that there are still a large percentage of timeshare owners throwing their timeshare memberships overboard to timeshare relief companies, and that many members still want to abandon ship. The blue skies and calm seas of the timeshare industry are far behind us and dry land is still a long way off. A bleak economic outlook has dimmed consumer spirits and we are sailing blind in rocky waters under the blanketing fog of uncertainty. The problem is big but only as big as we allow it to be. If we don’t cooperate with each other and recognize our symbiant relation allows our industry to survive and flourish then we are only making the problem more complicated and thus bigger.
The timeshare industry has lost the wind in its sales
Compared to the height of its success during 2007 the timeshare industry had lost the wind in its sales, and literally sales margins dropped off almost as much as 40% during 2009. Average annual maintenance costs hit an all-time high of $730 during 2010, up a staggering 8% than the prior year. Net timeshare originations plunged 35% to $6.3 billion in 2009 and were down over 38% from its height during 2007. The wind is slowly starting to change and the timeshare industry is witnessing a slight annual growth and promise in the market with credit access returning to the industry in the shape of large lenders such as Capital One. The progression is a slow as the financial time of high-risk high-reward big risk taking has faded and passed and now the dawn of the low risk is slowly creeping over the horizon. It seems that the waves have died down and the initial panic has subsided. It would appear that for now the financial storm is passing or we have simply underestimated its magnitude and are merely residing in the temporary safety that is its eye. Either way for now, the lost wind is returning to the timeshare industry’s sails. The timeshare industry needs to regenerate viable revenue streams that since the 2008 financial downturn are now stagnant through means of innovation and member retention. Timeshare resale and trade-in companies need a more prominent position in the market and should be considered as valuable revenue resources by HOAs and RMCs.
“To plug the holes and prevent the timeshare industry from sinking” The state of Florida has taken drastic action to combat pirate acts of fraud and scamming in the timeshare industry by passing the Florida Timeshare Resale Accountability Act. Several other states are following suite and are in the process of passing similar laws to the Florida Timeshare Resale Accountability Act to protect timeshare members and repair the PR damage caused by scammers and fraudsters and optimize timeshare member retention. These are collective efforts to plug the holes and prevent the timeshare industry from sinking under the weight of bad press. This also increases consumer confidence making potential members less gun shy and more likely to pull the trigger on a timeshare purchase, which is great news for the primary market. Consumer confidence in our product is essential in order for the timeshare industry to slowly recuperate its losses, regenerate profits and renew dried up revenue streams with a fresh flow of capital.