Over the last decade, the timeshare industry has done little to keep up with the evolution of destination travel. While technology and online booking continues to advance, the tactics and value propositions of timesharing have essentially remained the same. The diminishing number of uninformed consumers has begun to work against new acquisition as many consumers have begun to lose faith in the purchase.
Knowing what timeshare ownership might entail is almost always enough to persuade vacationers to pursue other travel options. Instead of waiting for timeshare companies to get with the program, consumers seem content with watching the industry fade off into the sunset. Unless the industry makes a hard right turn, it’s difficult to envision a mass recovery over a mass exodus.
Even if things were to change, will it ever be enough to overcome a half-century long reputation? Let’s take a look at some of the reasons why we believe the future of timeshare ownership is looking bleak.
1. The Increasing Costs and Liability of Timesharing
Over the years, certain occurrences have caused vacation ownership to steadily rise in cost. Besides general inflation, developers didn’t properly assess demand during most of their expansion efforts. In the early years, decisions seemed to be based on opportunity instead of probability. When timeshare ownership wasn’t able to sustain its popularity (due to bad experiences and mistrust), resorts turned to current owners for the difference. What they didn’t realize was, this approach affected the perception of happy fractional owners.
Because timeshare companies are now left scraping the barrel for gullible consumers, expansion opportunities are ceasing to exist. This forces them to sell more aggressively while charging more. Over the past few years, timeshare maintenance fees have been steadily rising at over 5%. Surprise, special assessment fees have become more common. Resorts have found ways to recoup earnings when acquisition slows down.
According to the ARDA (2016 AIF Owner’s Study), 66% of timeshare owners wanted to exit their contract because “the maintenance fees are too high.” Moreover, 46% of those that cancelled a timeshare mentioned annual fees as their primary reason. Small increases can amount to thousands of dollars over time. What makes this interesting is that many resorts have notably avoided proper upkeep at some resorts. Not only are many users not getting what they paid for, but oftentimes they’re paying more for lower quality. The liabilities that come with these decisions are one of the reasons we believe the future of timesharing looks bleak.
2. There is No Resale Value for Timeshare Properties
Like we’ve mentioned in previous articles, a good number of new timeshare owners aren’t aware of the actuality of the resale market. Aside from the misspeak that many timeshare sales reps use to persuade potential buyers, there are a ton of misleading options that take advantage of those looking to exit timeshare contracts. Once they realize that reselling isn’t ideal, it’s too late. Attempting to sell something that no one wants can be extremely costly. Throwing more money at something they don’t want and can’t make any money on can be demoralizing. Many of our clients talk about how they’ve spent thousands of dollars on resale platforms that didn’t provide a single lead.
Learning that you were lied to during the timeshare presentation and realizing the market doesn’t exist can be hard enough to swallow. On top of this realization, many timeshare owners underestimate the number of scams that cloud the resale arena. Just ask Darren Kittleson. When things aren’t working out and all hope seems lost, predatory agencies know exactly how to persuade you otherwise. They always have a meticulous agenda that uses disappointment and desperation to their advantage. Although platforms worth trying do exist, the overall uncertainty creates a bleak outlook for the industry as a whole.
3. The Timeshare Industry is Now Flooded with Scams
When it comes to timeshare fraud, the mischief doesn’t just dwell in resale. Victimizers also dabble in the buyer’s market from time to time. Claiming to have amazing deals in premier destinations, they lead people on long enough to collect quite a bit of cash. Verified Craigslist posts and Ebay listings have milked travel enthusiasts for decades now.
At the same time, these are only a few examples of the consistent and ever growing misconduct in the timeshare industry. People are now being scammed before the purchase, during ownership, while they attempt to exit the contract and once they’ve terminated the agreement. If you’re already disgusted by the lies your timeshare company has fed you (to keep you under contract), realize this may only be the tip of the iceberg.
Scammers know how trapped most timeshare owners feel and how desperate they’ve become. There are plenty of angles they can take to deceive you into believing their solution is worthwhile. From advocacy groups to legal representation, it’s difficult to know what to believe anymore. Anything seeming “too good to be true” normally is.
Some 3rd party agencies even work with resorts to ensure timeshare owners don’t make progress with cancellation. Not to mention that a large percentage of timeshare exit companies have poor work product and underdeliver, if they deliver at all on their promises. Thousands of dollars have been wasted on resolutions that don’t even exist. It’s a real shame, but only adds to the stigma of the industry. Even if you’re able to finally cancel your timeshare agreement, scams surrounding travel clubs, vacation rentals and advanced payments can flood your inbox – due to your online behavior. Since many consumers and industries refuse to touch timeshare with a 10 foot pole, the future looks bleak.
4. Today’s Travel Options Are Valued More by Travelers
Instead of waiting to see if timeshare companies are willing to overcome the reputation they’ve built, travel enthusiasts are now pursuing vacations that better suit their needs. Perpetual contracts just don’t make sense anymore as luxury vacation rentals and retail resorts are prevalent in today’s society. While scams do exist in other travel options, a number of platforms have established themselves as trustworthy entities.
When timesharing first came about, most people were thrilled to be able to afford a vacation in a place they’d never dreamed of visiting. The ease of global travel has given consumers the unique ability to explore the world without being tied to one location. Although points and exchange programs broadened the horizon for timeshare owners, availability and quality was still a problem.
For the most part, today’s vacationing options consistently meet the expectations of travelers. The experience usually matches the presentation. Even if small inconveniences occur, the user isn’t tied to long-term, mandated payments. They also have an ability to review their experience to order to warn future travelers or find resolve with the property. One may quickly determine that Timeshare companies have failed to value the user experience based on the thousands of online complaints and poor ratings. Because of this, the future doesn’t look bright for timeshare ownership.
5. The Evolution of E-commerce in the Travel Industry
Options for travelers is only one element of timeshare competition. Since fractional ownership is based on perpetual (or lifelong) agreements, retail travel makes more sense. One click bookings have taken the market by storm over the last decade. Consumers now flock to reputable sources for online vacation deals and packages. Travelers even have the option to schedule flights, lodging and a rental car in the same place. It’s very difficult for the timeshare industry to compete here.
Even online retailers are now pushing timeshare weeks without ownership. Air BnB, VRBO and HomeAway are currently dominating vacation rental. Because of the user experience, travelers now feel far more comfortable using consumer to consumer e-commerce sites for travel related bookings. Removing the middleman (Ie: timeshare company, rental and resale platforms) allows them to keep everything in front of them. Instead of believing in “promised solutions,” timeshare owners are now taking matters into their own hands. This alone should tell you how standoffish people are about the timeshare industry – whether it comes to perpetual agreements or retail access to their inventory.
6. Timeshare Companies Have Been Overselling Inventory
Ever since the timeshare rush in the late 1900’s, developers have been selling non-existing products. As the points evolution grew, this became even more popular. It was a way for timeshare companies to, once again, keep buyers under contract. It’s almost as if they never saw the repercussions of doing so. Overpromising and under delivering has never really been fruitful. It’s just not sustainable when it comes to large purchases.
In a recent article, we wrote about the ramifications Midtown Manhattan Club received for selling unavailable inventory. Although the property remained full, this rightfully angered their users. You’d think they’d at least limit the inconvenience when selling air. In the end, the NY Attorney General required them to pay $6.5 million in restitution, amongst other things. This goes to show that regulations are increasing and timeshare companies are no longer able to just get away with unethical sales practices. For this reason, the outlook of timesharing doesn’t look good.
7. A Consistent, Perpetuated and Tarnished Reputation
If you analyze each of the aforementioned reasons, you’ll realize that the timeshare industry has had every opportunity to redeem themselves. But the growing level of greed has basically clouded the entirety of experience altogether. Temporary solutions have sprouted up, but have failed to actually address the problems timeshare owners have. The thing is, it’s not like timesharing has only been around for a short while. For nearly 60 years, the industry has compiled substantial amounts of skepticism.
Every travel innovation experiences roadblocks. Even vacation rentals have endured some backlash from consumers. The difference is their willingness to make things right. The way the timeshare model is set up, there’s limitations on what they can do to overcome negative perception. They’ve already proven their unwillingness to decrease prices. High pressure sales and unethical tactics have remained consistent. Worthless incentives and non-existent service has been their achilles’ heel for a long time.
The best way to understand this is that they’re maximizing profits before the market runs out. Either way, the consumer continues to lose unless they’re able to prove misconduct in court. As we’ve discussed before, this is very difficult to do. Timeshare companies are banking on their ability to hold onto their fractional owners for life. A lack of interest in overcoming this perception and repaying those taken advantage of is the main reason we believe the future of timesharing looks bleak.
If you’re interested in learning more about getting rid of your timeshare contract or what your options are, we’d love to provide you with a free consultation. If you believe you’re ready to pursue cancellation services, feel free to fill out a qualification form below.
