Due to the current state of our country, the inability to use your timeshare may seem valid. Pandemic-driven restrictions have made it nearly impossible for anyone to enjoy any type of vacation over the past year. At the same time, it’s important that owners are able to move forward with an informed state of mind. Truth be told, there are some changes in the timeshare industry that owners ought to take note of.
Even though it may be difficult to understand or see with the naked eye, change is worth looking into. Truth be told, many buyers are kicking around the idea of ending their timeshare obligations for the first time. So should they continue to wait around for a favorable outcome or look to take action to escape further letdown?
Guaranteed Protection or Ultimate Deception?
Since March of last year, timeshare companies have done an immaculate job at conditioning their ownership base to believe the end (of limitations) is near; that they’ll eventually be able to resume their vacations and more. But when you take the time to analyze the vast amount of their past sales pitches, you’ll find there are an array of cracks. With that being said, the proper education of possibilities is essential.
Current Downtrends in the Timeshare Industry.
Although our publication spends a lot of time debunking timeshare myths or challenging industry guarantees and ideas, we thought it would be a good idea to share what we see progressing. Much of the changes in the timeshare industry have been a slow trickle – or burn if you will. Whether you believe the potential of your contract or not, making a sound decision on your own can be liberating. So let’s take a look at some concerns worth noting.
1. Developers, Lobbyists Aren’t Considering Owners.
One of the biggest developments over the past few years has been the push to loosen the restrictions on annual dues. While maintenance fees have been known to be rather unpredictable, special assessments aren’t as common. These types of added expenses rarely surface unless there is some sort of natural disaster or major resort renovation. Now that there has been a year’s worth of lockdowns, some believe the owners will be asked to foot the bill or get the boot.
Minimal Restrictions on Special Assessment Fees.
Ironically, some states have already decided to increase the cap of these types of assessments. In fact, Florida ensured timeshares wouldn’t be capped for these onerous fees back in 2015. Since the peninsula hosts some of the most popular destinations in the world, a good portion of owners will be affected by this ruling at some point in the future.
Timeshares Are Chipping Away at Tax Obligations.
Aside from increasing the total amount they can collect from vacation owners, timeshares have also been busy proposing and lobbying for a number of tax breaks. This is why changes in the timeshare industry rarely benefit the customer. For example, timeshares want to include private resale prices for local tax assessments – even when buyers try to get rid of their contracts for pennies.
Anyone on the outside looking in, with a critical lens, can easily see resorts are selling an overpriced product with little to no return – yet they almost always pitch ownership as an asset or some sort of investment property with benefits. So why should they be able to save money when owners are forced to spend tens of thousands with little to no equity to show? It’s a good question to ask; especially if you didn’t already know the resale market is nonexistent.
Limiting Owner’s Resources to Legally Get Out.
For years now, timeshares have been looking for ways to handicap their buyers’ ability to escape the perpetual contract. In 2019, the state of Arizona not only ruled to uphold the perpetual bind, but they doubled down with further timeshare protections. While there are some terms that aid contracted owners during the initial phase of the purchase, resorts can no longer be liable for the promises made by their sales agents.
In other words, the license to lie somehow remains warranted. Unfortunately, the lies of timeshares don’t just begin and end with the sales presentation. For the most part, resorts have never been supportive of exit solutions – and rightfully so. Companies like ours actually help consumers get rid of disadvantageous timeshare purchases.
In turn, a mass amount of fear around any type of relief is promoted by major resorts. Although we are fully aware of exit fraud, they have no basis for defaming the entire industry. Nonetheless, they’ve been proposing laws (like HB 435 and SB 1430) to handicap any form of relief for owners for quite some time now. Feel free to look into it for yourself.
2. Empty Lawsuits, Attacks on Consumer Aid.
When legislation doesn’t accomplish timeshare goals, they’ve been known to take extreme measures to eliminate “the problem”. Sadly, many owners believe timeshare companies are actually fighting to protect them from scams. In reality, most of their attacks involve effective, pro-consumer businesses. Slapping a far-reaching lawsuit on these organizations only depletes funds and hinders their capabilities.
Defending against lawsuits like these can quickly cost an entity more than $500K in a short period of time. In turn, many honest resources are eventually bullied out of business. The problem is, the infrastructure of this legal battle is rarely based on right and wrong – rather who has the best strategy and most money or power. While there have been many changes in the timeshare industry, this has been pretty consistent for a long time.
How Are These Lawsuits Used to a Timeshare’s Advantage?
When timeshare companies win these types of lawsuits or settle with defendants, the outcome is often misconstrued. It’s easy to assume the loser was involved in misconduct – but they may have simply been unable to financially defend themselves. In turn, timeshares have been known to leverage the outcome to gain authority. Even if the entity they target did nothing wrong, it allows them to further the narrative that relief is dangerous.
While it may appear a timeshare is slowly removing 3rd party scams (so owners can find ample relief), this isn’t the case. Whether fraud is a big problem or not, the money spent on legal assertions could easily be poured into ownership solutions. At the end of the day, the exit marketplace exists because buyers are seeking a way out. Ironically, most of the scams they claim to abolish use the same sales tactics as they do – oftentimes trained by the industry. In other words, they created their own monster.
Vacation Ownership Doesn’t Benefit From Paltry Lawsuits.
If vacation ownership companies really wanted to make sure buyers were able to find ample relief, they would work with companies like ours to find some sort of middle ground. If they were serious about dissatisfaction ratings then they would look into their own sales practices to improve retention. Instead, they are proving to boast about the lawsuits that put solutions out of business and hope scare tactics portray them as some sort of hero.
3. Changes That Impact Owners’ Ability to Transfer.
Since the travel industry has been shut down, a plethora of owners have been looking for ways to make up for their loss of usage. Now that they’ve realized there isn’t much they’re going to be able to do about the vanished vacations they paid for, many have been banking their weeks and cutting deals to pay in advance for future usage.
If owners thought it was difficult to gain access to their timeshare before COVID-19 hit, then they’re in for a rude awakening. When resorts open back up for business, they’re most certainly going to be looking to fill their rooms with high paying retail customers (that are itching to go on vacation). So how will vacation owners process transfers if availability is even slimmer than before?
Altering and Positioning Points and Transfer Programs
Since timeshare sales forces are focused on converting contracts with deeded interest into points ownership programs, consumers ought to know what this entails. Unfortunately, points are being sold far ahead of actual developments. While an influx in resort development may appear to increase availability at some point down the road, don’t hold your breath. A drastic increase in demand can be expected to follow.
As a result, the product will greatly depreciate and be a lot tougher to book. Moreover, if your ownership contract has a small value of points then it may also prove to be much more difficult to transfer as well. Even though timeshare companies say there will be more options in the near future, nothing is guaranteed at this point.
4. Major Consolidations Within the Industry Are Telling.
In 2021 alone, the industry has already seen 3 major merges that seemingly will strengthen new acquisition strategies. After a rough year of dealing with ownership complaints and accusations, Wyndham bought out Travel + Leisure. They even plan to adopt the name.
Marriott, one of the biggest money-makers in the industry, is also acquiring the sinking ship of Welk Resorts. Both claim to have the same goals, but neither truly talk about salvaging relationships with current owners. Hilton also recently secured the rights to Apollo Group and Diamond Resorts, bolstering their inventory with high end properties.
Acquisitions Typically Come at the Owners’ Expense.
These changes in the timeshare industry are important to mention because a number of things can transpire after major brands consolidate forces. While you may think your current obligations are set in stone, it may not be the case. Previous products are almost always made obsolete so new binding agreements can be made.
Timeshare Availability Tends to Dwindle Even More.
In many cases, owners soon learn they can’t even use what they originally purchased. Some are forced to adopt the status quo just to make the expense (or liability) worthwhile. Special assessment fees have also been known to cover resort rebranding, remodeling and any other presentational changes that come with the merge. Even maintenance fees have been known to double or triple after an acquisition.
The point is, while it may seem like there are good days ahead, disaster could be on the horizon. The worst part is, it’s almost always at the buyer’s expense – even though the resort’s failures often create the need to sell out.
Monitor the Changes in the Timeshare Industry.
The timeshare industry is a slippery slope full of pitfalls directed by deception. Before you get yourself into an onerous contract, make sure you do your own research. If you already own a timeshare, and you’re preparing for the not so distant future, then pay attention to the signs. While it may not seem like a lot is going on because of lockdowns, timeshares are definitely staying busy.
After all, they have to make up for all of the money that was left on the table last year. Those of you that are uncertain on how to respond, do your best to find a resource you can trust. Understanding the changes in the timeshare industry is important. While honesty and integrity may be hard to find, it is most certainly available.
At VOC, we want to hear your story and are eager to look for ways to help. At the same time, we understand that our solution isn’t for everyone. As a matter of fact, some buyers don’t even need our services. Giving you space so you can make a confident decision is important to us. So if you have any questions, don’t hesitate to call.