Timeshare - the European market contraction
As explained in other articles, the reason for timeshare exploding in Europe in the 1970s was from a desire to get away from the rainy homeland holidays and to bask on the Mediterranean beaches, in Spain. The craze was everywhere, affected everyone and if reports are to be believed there was “no room at the inn” if you failed to book a year in advance.
The facts then were; if you wanted a holiday abroad, you had to queue outside travel agents, and discounted Spanish holidays did not exist. If one report is correct, a person tried to book a holiday 18 months in advance and the agent had sold out.
That's why timeshare exploded, holidaymakers could pay in advance, enjoy guaranteed holidays forever and without joining the rat race to book one. Equally that is why the first timeshares were re-sellable and for sums more than what was paid for them.
With exotic tales, and sun tans to match, there was a need to build more and more resorts. Spanish holiday resorts developed and the industry exploded causing timeshare to do very well. Over time, holiday resort locations became saturated and buildings became tired so accordingly, re-selling prices plummeted. With the new craze going to the USA or the Far East and people being trapped into long term contracts, blight became a real issue with timeshare.
With reputational damages and reports of scammers, timeshare suffered. However it is likely to exist in the future as the fundamentals regarding the product, are good.
Timeshare ownership, because of changing markets and blight, has declined, and the new generation perception has been impaired having listened to those who fell out with it. Some vocalise great hostility, which has prevented others from taking advantage of the many holidays which timeshare offers.
In the present climate, the Resort Development Organisation RDO has cleaned up many bad practices, tried to ensure its members deliver ethical standards and assist its members to rid the product of its ‘bad boy’ image.
In doing so, it has created social platforms, advice lines and promotional avenues to deliver what is good about timeshare, which we hope to assist with. That said, should a badness be reported, we will not avoid the problem or fail to warn others.
In times long gone by, many will be heartened by the fact that “everyone gets caught eventually”. With the development of new sale strategies, rebranding, changing company names, repackaging and markets, the fulfilment of the old rules may be delayed. However, the scammers are still apprehended eventually.
In the interim, you need to be vigilant whenever parting with any money concerning a timeshare transaction. Questions must be asked, answers must be given and all matters reflected upon in your own ‘quiet place’.
What to consider when buying timeshare
Many have proclaimed that the stock market must be free of interference, and should never be controlled, as the values should be determined by the concepts of: -
“willing buyer, willing seller” or “it's only worth what another will pay for it”.
In simplistic terms “are you a willing buyer” and if so “is the seller also a willing or desperate seller”?
If one party is more willing than the other that will affect the price in a free market. If a willing seller presents to an unwilling buyer, the price will go down however, should an unwilling seller be approached by the very willing buyer, the price naturally goes up.
If one of the parties can delude the other, regarding their willingness to buy or sell, an advantage is gained and will affect the price asked for or paid.
The above is known to all, but rarely recalled when in the confines of an arduous sales presentation because the consumer likes to be considerate and composed whereas the seller is more aggressive. The seller is at work and the buyer is on holiday and simply does not want hassle.
Sellers understand that a consumer will naturally ponder over the proposal put, despite the suggestion that an urgent decision is required. If that seller can ensure that the buyer remains in their meeting, the natural milling of the problem (separating the chaff from the wheat) could be interrupted by the sales person so it’s only the seller information which you put through your mill.
When a buyer becomes vacant and overtly shows signs that he is milling things over, a salesperson will interrupt the process by talking. Some will introduce niceties, golf, football, the sun, holidays etc, they will like what you like, hate what you hate, admire you and what you have achieved. This process ensures that you will not be derogatory against them or think ill of the interruption or suggestions they are delivering. If this does not work, your unwillingness or your cognitive impairment will be further teased with gifts, a free ticket, a drink maybe, a little praise or more flattery, a meal out, in fact anything to implant trust, likability and credibility to avoid you mentally milling the deal in front of you.
When your milling is interrupted, your reasoning is disarmed, and the mental see-saw will come down on your opponent’s side.
All advice suggests that you should listen, learn and take documents away with you and do your milling in your own time, when you are happy to do so and without the seller chirping.
Drive the price down
The methods described above are used if the selling is by a very willing seller. Of course, the position could be reversed, as the buyer may be operating the same way, a very willing buyer.
Drive the price up
Timeshare contracts are complex, and you need to separate the chaff statements from the real wheat. A seller wants to talk to you and stop you trying to read the documents, not simply because they contain things they don’t want you to see but because they are boring, arduous and will prevent you from having great thoughts about what is being sold.
Of course, should the seller be trying to resell your existing timeshare, you need expert assistance and want him to do the same to ensure you get the best price.
During the history of timeshare, a good concept was turned bad by a few, and many have been to blame, many have assisted in the remarketing, re-engineering and rebranding. Many have given the concept credibility like finance, celebrity endorsements and alignments, however you cannot buck the market. In short, it’s the job of the resort to sell its products and they will have a great need to do just that.
What is not discussed is the consumer part in all this. When in a sales event, (quite truthfully) most consumers know they are being sold to and understand the seller wants to achieve the best prices for the product, he sells.
The seller will want to command the meeting so that they have the best opportunity to sell. Most consumers know this and equally know they are in a resort within a stable country with laws, protections and police forces and all those countries do not permit the public to be held hostages or wrongly detained.
When someone claims to have been subject to a sales presentation, felt harassed, the court will ask “why did you not simply leave”. I’m not in any way admonishing a consumer, but they must aware that where blame is concerned, on some occasions, it must be shared.
Every person has ‘gut feeling’, has an innate ability to know if the person before them is selling, is lying or being confusing. The consumers know if they can definitely afford what is being sold. Again, blame may appear in both camps and must be admitted if you don’t want your credibility to be impaired. Equally in those situations you are where you are then, and should you want to issue hostile vibes to the resorts you might find they will not help you.
The emergence of timeshare in other countries
With a new friendly face painted on timeshare products, the credibility of large institutions, lobbyists in governments, the rebuke of the press softened and the toning down of sales presentation language in most sales presentations, sales in many countries continue and upstaged past results.
The wise businesses have moved away from the hard-sell pitches and limited presentation to 90 mins. The 8-hour presentations (synonymous with “scam”, “fraud” and “con”) are no more and coupled with more compliance checks, sales in some countries have continued to expand.
It’s also helping to attract younger buyers who carry out more research, check more reviews and employ the Internet routinely and for advice.
Therefore, all timeshare is not bad, you might consider that the good resorts and ethical sellers have a grave need to put distance between them and those who are not so ethical.
That being the natural expectation, the problem is the bad resorts masquerade as the good, confuse the onlookers, invent good stories, deliver fake reviews and employ an army of publicists to prevent the consumer from knowing the truth about whom is good or bad.
In pursuit on answer to the question "Has anything changed? The short answer is “yes” and “no”.
Warning when selling timeshares
The timeshare models have changed; including the contracts, language, lawfulness and the way they are sold. However, in some quarters they haven’t, as the same scams are evident.
If you pander to the concept that you might be paying many £000’s to buy a holiday that only might be delivered (not guaranteed) and are required to pay for upkeep of resorts even if the holiday is not available, forever and involves involving your family taking over the obligations, it might be difficult to sell or re sell.
If a buyer panders to the sales concepts of your agent - that the product is cheap, an inherent investment exists [which will make the buyer money], it provides 5-star holiday, [all over the world] and there is no down side. If you know that to be false, our question is “should you not be informing the potential buyer what you know?" If you don’t, you have failed to disclose everything you know regarding the contract.
What is the truth in 'timeshare arguments'
Timeshare industry organisations are self-governing, they have no mandate and are being paid by the timeshare industry to deliver a benefit to them, not the consumers they sell to. The reasons why they were formed was to provide a combatant to harsh legislation and a voice to influence the formation of less troublesome legislation.
Now those industry organisations have created and financed consumer associations, whose primary purposes are different from the core values of associated matters financed and supported by consumers for consumers.
The cryptic ‘motto’ must be “calm discord”.
What's new and what's old about sales pitches
According to industry insiders, all sales presentations these days are scripted from the start to the finish and in the form of bullet point steps.
Each salesperson will be allowed to add into the mix, slight variations to ensure the presentation fits the ebb and flow of the meeting. Of course, all meetings cannot follow the same theme, scripts can guide but cannot be a rule book as a seller will confront first time buyers, existing owners, other visiting exchangers and so on.
The script for first-time buyers, will involve sales people spending a lot of time trying to assess how and where the consumers spend their holidays, their typical spending limits and their expectations. With that information the salesman will target in on that buyer's GEE-WHIZ ‘you can go anywhere’, ‘whenever’ and for ‘next to nothing’.
Let’s face it, the sales teams are paid to present timeshare as the ‘wonder of wonders’ and a cheap everlasting and magical carpet ride into happiness.
This script is for existing owners and tends to take less time, as the pitch is more focused on "what else can we sell you".
Both scripts suggest timeshare ownership is a great hedge, against the always inflating costs of hotels and that timeshares are more exclusive, comfortable and luxurious (especially for the family). In fairness, the sales person’s job is to find a flaw in your existing holiday arrangements, home in on it and sell you their product.
Most timeshare sales people tout the proposition that timeshare is valuable, offers great value, delivers 5-star holidays, is interchangeable and without doubt resalable. That reservations are easy, the products are swappable, rentable and you can visit thousands of other resorts in wonderful networking arrangements.
This script for the older buyers sells the idea of leaving the timeshare to their children so they, too, can enjoy endless, carefree holidays. All are given ‘same-day’ price reductions, more ‘free gifts’ and pleasantries.
All presentations are verbally enhanced, delivered in one-to-one meetings and consumers are encouraged to sign on the day and all products are capable of being financed by banks.
In today's timeshare market, many have moved away from the traditional fixed and floating timeshares weeks and the present beauty is the selling of 'points'. With very few exceptions, all major timeshare companies are now selling points or fractional points, which are or might be, a timeshare/holiday club (the jury is out on that one).
In the sales presentations, the fixed, floating or deeded weeks are now claimed to be the dinosaurs, thus brushed aside and downplayed. That said, in slow timeshare developing countries like India and Mexico, they are still promoting fixed-terms "right-to-use" leases.
European and US-based timeshare sellers are also now selling vacation clubs which can offer limited-term products and are sometimes refer to as "anti-timeshares".
One massive advantage of right-to-use programs is that there are no resale market problems, nor any inheritance or title issues. When the lease is up, the timeshare membership reverts to the developer, while the consumer walks away with no further financial obligations.
Today, thanks to several high-profile legislations and government led enquiries the hard-sell sales tactics have all but vanished and the reference to timeshare as being an "investment" has substantially diminished.
Many equally shy away from making personal promises about matters they know to be false. Instead, most stick to an updated script that recommends points programs which are claimed to offer greater choice, more adventure and 'experiences' like cruising, golf excursions etc.
Accordingly, as timeshare and long-term holiday products morph, the differential gap narrows and potentially to a single issue “do you want to pay upfront and potentially save some money or pay as you go”.
This all explained, sales people still avoid talking about the lack of a re-sale market, resale prices, take-back programs and the long-term maintenance fees, yet it is these issues which deliver the most dissent.
Some sellers even shun questions about rental, swap and private exchange programs.
The simple fact is, timeshare is sold for front loaded fees and when sold, you wait to have the benefits delivered the seller banks the money and lives in the now.
Over many years, the sales of timeshare begin with unsolicited contact via a ‘cold calls’ approach, a flyer, a questioner at the airport etc., or an illusory win/windfall.
Over many years, people have been presented with scratch cards, holiday competitions, product competitions, offers of nearly free holidays, free park tickets, free rides, cigarettes, booze, gifties, laptops, and waterpark entrances, etc.
The simple facts are consumers don’t walk in off the street wanting to buy timeshare. Timeshare sales never flow from buyer’s enquiries. Sales are made by unsolicited contact, whereby goodies are on offer and gifties promised if you endure the timeshare presentation which is explained as a survey, a holiday meeting, an informational event [to show you what is available etc]. What is not stated is, it’s a long hard pressure meeting to sell you timeshare.
It must be said unsolicited approaches and inducement work. They can excite people into the belief that they will get “something for nothing” or a great opportunity is on the horizon which others don’t know anything about it.
So, risk is accepted and the old advice of “you don’t get ow’t for now’t” ignored. To buck the trend, I’ve heard others explaining that they knew it was a sales presentation, loved the mental combat and the cheap holiday that followed.
Taking Las Vegas as an example, Timeshare touts pop up on almost every street corner. During a visit which lasted 10 days I was approached about 100 times by touts offering discounted show tickets and free dinners, on the condition I attended a sales pitch. The “roping in” is big business, with scores of touts pushing presentations on people who just went to be entertainment, not harassed.
Consideration during the timeshare cooling off period
"It's only available at that price today" - you are being lied to.
"The product is the best product" - they will have the data, if they don’t, the claim is untrue.
"It will make you money" - if they don’t have a prospectus or accountants warranted, it is untrue.
"We will resell it for you whenever you want" - if that's true, ask to see the term in the contract.
"It will go up in value" - if they don’t have data, you are being lied to.
"There are health benefits" - if they don’t have data, you are being lied to.
"The maintenance fees are low" - have them supply a historic audit trail, evaluations and existing membership lists so you can verify them.
"You can go on holiday any time you want" - ask them to point out the contractual term they are referring to.
"You can exchange it any time" - ask them to point out the contractual term they are referring to.
"The holiday will be 5-star" - ask for a copy of the rating certificate.
If the truth is being told
Can you tape the conversation?
Can you video the conversation?
Will the seller write down all the product’s core features onto paper and sign, date and warrant they are truthful?
Is the sale subject to a legal compliance check? Ask for a copy of the professional indemnity certificate and a copy of his certificate and qualifications?