No matter where you’re surfing online, it’s nearly impossible to avoid any type of news about the coronavirus disease. Some people want stay at home orders in place while others demand that the government reopen the economy. While a few businesses may be thriving during the pandemic, many industries are losing millions of dollars daily. If you’ve read any of our recent articles, then you know the timeshare industry is “uniquely positioned” here. So when we heard Bluegreen Vacations downsized sales staff, we weren’t surprised.
You see, the primary expense of a timeshare company is the sale itself. Millions of dollars are poured into advertisements, telemarketing, presentations, partnerships and commissions every year. Since they can’t sell weekly intervals right now, it’s easy for them to cut ties with expendable assets. Many aren’t aware of the sales tactics used, but it’s easy for the industry to replace and incentivise hungry salesmen.
Here is the statement from Alan B Levan, Bluegreen Vacations’ President, CEO and Chairman. “We remain committed to our owners and the future of Bluegreen and are taking these difficult necessary measures, which will adversely impact our associates and our business, only after careful consideration of the challenges we face and with a view to protecting the long-term best interests of our associates, owners and our company. We look forward to the end of this global crisis and the reestablishment of our full business operations.”
Will Laying Off Sales Staff Really Hurt Bluegreen?
At the end of the day, the prominent resort chain still hasn’t specifically communicated a plan to aid vacation owners during this economic crisis. Because of this, we have to assume that payment obligations will resume. But don’t worry, the resort has a plan to ensure they don’t go under during this pandemic. While you, as a timeshare owner, might struggle tremendously, the resort will be available for use once the economy reopens.
Levan went on to say they’ve been forced to shut down transfer programs at Choice Hotels amongst other things. “The COVID-19 pandemic is an unprecedented event in the United States and globally, and the domino effect has directly impacted Bluegreen’s sales and operations,” he said. According to other press releases, the Florida-based conglomerate (NYSE: BXG) has also closed most sales kiosks in retail centers like Cabelas and Bass Pro Shops.
When you think about it, is the downsizing of timeshare sales staff really a bad thing? Many buyers credit misleading sales practices for their grief. Levan makes it pretty clear what Bluegreen’s goal is. They want to end the loss for everyone and eventually reestablish their hard working sales teams. So should vacation owners anticipate enduring some loss too?
Bluegreen Vacations experienced an increase in timeshare sales through February (16.5%) and are now in a “unique position” to collect payments while eliminating their biggest cost.
Bluegreen Still Needs to Answer Some Questions.
What happens if new buyers – those that just took out a huge, perpetual loan on February 26th – are now unable to pay? Will there be any rule changes or temporary exceptions for those that have yet to use the property? Over the next few months, will Bluegreen count on timeshare payments and maintenance fees to sustain? Is a future vacation what struggling Americans should be striving for right now? While Bluegreen does an admirable job seeking sorrow for their losses, they’re not exactly suffering like most operations.
Either way, there are at least 220K Bluegreen owners out there (2019 data) that may not be able to use or afford the sneaky-expensive-product during a hardship. This isn’t even including those that signed up in the last 6 months. In comparison, Bluegreen is said to have just under 6K total employees, 3,300 of which are sales teams. Just because Bluegreen Vacations downsized sales staff doesn’t mean they’re hurting. On March 19th, they drew down $60 million out of a $125 million revolving credit facility and had $240 million cash on hand by March 30.
Although the travel industry is at a stand still, Bluegreen Vacations – like others – has set themselves up nicely to endure a recession. This is what makes the timeshare sales model so concerning. No matter what happens to the resort, country or destination; the industry can always lean on their owners. That contract you signed almost always keeps it that way. If you’re concerned about your future as a timeshare owner, we’d be more than happy to listen.
