The timeshare trends to watch
It is estimated that the timeshare industry is worth roughly £7.2 billion according to the American resort developers and industry trade groups. By comparison the music industry is £5.8 billion in terms of generated revenue therefore with that revenue is a force to be reckoned with. Some estimate nearly 7 million households own one or more timeshare products, in the form of weeks, points, or fractional ownership so again this is nothing to sneeze at.
The bottom line is that this industry is like a big, ironclad ship. And as any salty old seafairer could tell you we’ve got plenty of these ships here in Europe and these big ships can be very difficult to turn around, but they are taking on water.
It cannot be discounted that every industry from time to time is susceptible to stormy waters and these storms that bring n some cases bright and blue yonder.
Sometimes, the signs are difficult to see however, the winds of change are afoot, and normality may be a gust away.
With that in mind, many may be able to make a few educated guesses about what the future may hold for the timeshare industry in Europe or, at the very least, point you toward the developing narratives and industry conversations worth keeping abreast of.
Here are some timeshare industry trends and stories well worth following in the months to come:
As we’ve noted before, one long-term issue that may determine the future of the timeshare industry is age and make up of its consumer base.
While the industry vultures and watchdogs have stressed the need to diversify their consumer pool and seek out millennials, the reality is that the average age of a European timeshare owner is nearly 50 years old and they are not a happy bunch.
Much of the timeshare industry’s profits come on the backs of those existing customers as in 2015, fewer than half of timeshare sales were to new owners. One report suggests that at least three major resort developers in 2015 made more than 60% of their sales to existing owners.
In 2018 and beyond, it’s well worth watching how the industry reacts to the whimpering gravy train of the grey £ and how they will market booming yet indebted young ones.
Can the timeshare industry continue to make money on the backs of its aging and depleting customers? Or will resort developers and trade associations steer their industry dons toward more consumer-friendly practices, which could lure in millennials, who have been brought up with a plethora of vacation options?
Newer vacation options
In many ways, the last few years have been the age of the short-term vacation rental.
Home sharing options like Airbnb, HomeAway, VRBO, and others have opened this once-niche travel option to the mainstream, and this industry is absolutely booming. One study suggests that the private accommodation market’s growth far outpaced the total US travel market in 2016 and could be worth more than £25 billion by 2019.
So it’s worth noting that, according to some industry watchers, the largest growth in this sector is coming from younger audiences, aged 18 to 44 – the very demographic that the timeshare industry must start fishing or they will not survive.
While short term, private vacation rentals have been criticised and scrutinised, they seem poised to only keep growing in prevalence for travellers, who are increasingly looking for cost saving, greater flexibility, and more dependable travel experiences.
This could well affect the travel and hospitality sectors in an enormous way, posing a threat to hotels, self-catering holidays and, yes, timeshare resorts
Response to natural disasters
While most of us don’t want to think about it this way, the reality is that a lot of our health and good fortune is entirely up to a game of chance.
There’s no telling when an act of God happens and with climate change the cold might be the new hot and the too cold might warm up. When you consider the massive fires, we hear about the floods and turbulent weather that rips thought some places like Florida, the Caribbean and other tropical destinations a static timeshare resort might be perilous to invest in.
Indeed, with global weather patterns only becoming more extreme over time, it seems likely that this will only become a more common occurrence in the years ahead. And that timeshare owners could end up paying more or the benefits of timeshare ownership becomes frustrated.
It may become important to keep an eye on how the timeshare industry, as well as individual resorts, react to a greater threat of damage or increased clean-up costs year after year.
It cannot be avoided that some timeshare resorts are being drained of money due to claims being made and legal costs being incurred. In one claim in 2017, New York’s Attorney General obtained a £5.9 million settlement with the owners and operators of the Manhattan Club, a timeshare building in Midtown Manhattan.
“…contrary to the club’s explicit promises in its offering plan, room availability to owners was greatly limited because rooms were being rented out to the general public. That means that all reservations are subject to availability and owners, in some cases, were unable to use any of the time they purchased. Further, the owners’ annual common charges jumped approximately 200% in the last ten years – to about $2,000 per ownership interest per year for the smaller units – on top of the upfront purchase costs that ranged from just under $10,000 to over $40,000 per ownership interest. Some frustrated owners have sold their ownership interests back for a mere $1, just to escape the burdens of paying these charges.”
None of this is uncommon within the timeshare industry; many have kept our eye on consumer complaints, reported them and litigated over them. The resort reservation systems are mush complained of, the steadily rising annual fees, and the systemic suppression of the secondary market for resales.
While consumer protection is being frustrated on the national and international levels, authorities are delivering more and more legislation along the way and we have scolded many consumer protection agencies for not enacting more common-sense policies.
Could 2019 bring fresh legal challenges to the timeshare industry and its many activists? Will consumers and their advocates turn a fresh eye to the oversight of resort developers around Europe.
What is certain is the police are in hot pursue against the fraudster who cold call and sent fake lawyers.