For more than half a year now, Americans have been limited in their ability to travel. The millions of people that look forward to annual spring or summer vacations have been grounded without much certainty on when the next trip will be. As the holiday season approaches, how many more people will find themselves facing cancellations? More importantly, how will timeshares recoup losses from COVID-19?
Truth be told, no avid traveler has been shafted as bad as vacation owners in 2020. Missing out on an anticipated trip is definitely a bummer but the worst case scenario isn’t even close. While cancelled reservations may come with fees, the timeshare expense is perpetual. Imagine being forced to pay for a vacation package you can’t even use in order to avoid a penalty.
Will Vacation Owners Find a Cure for Coronavirus Woes?
The uncertainty surrounding the industry at this time has left many owners concerned to say the least. While they await a solution to the disadvantages they’re currently facing, furloughs, profit losses and stock purchases have littered headlines. Many have lost their jobs and don’t even know how they’re going to keep up with payments. A lack of reassurement can be troubling – especially if the purchase has already been a burden.
At the end of the day, timeshare owners deserve some sort of insight and guidance. Making 6 months worth of payments through a pandemic, despite a bleak outlook, should be rewarded. At the same time, history tells us we should tempur expectations. Although it’s difficult to pinpoint what the industry’s next move will be, could timeshares make up for the losses of COVID-19 by leaning on it’s ownership base?
5 Questions Worth Considering If You Own a Timeshare.
Unprecedented times often call for unprecedented measures. If you’ve never taken the time to fully understand your timeshare contract then there is no better time than now. A number of things can transpire rather quickly that can alter your ownership capabilities and even overall costs if you’re not careful.
In order to help owners better navigate the current arena, we put together several questions worth looking into if you’re currently analyzing the actual value and return of the perpetual product.
1. Will You Be Charged For a Special Assessment?
This question is one of the biggest mysteries currently plaguing timeshare owners across the country. Assessment costs are usually imposed when resorts experience inconvenient setbacks or planned improvements – neither of which timeshare owners have a say in. While a number of things can be assessed across owners, these charges are normally expected after natural disasters.
Depending on the language in a buyer’s contract, a pandemic may also be included in these fees. Based on the reasoning for some special assessments in the past, we wouldn’t be surprised to see vacation owners on the hook. Even if timeshares receive federal aid, most of their contracts allow them to charge owners however much they deem “fair”. The state of Florida actually just increased the cap for these fees.
Based on a majority of our client’s stories, it’s hard to believe anything during a time of loss for the timeshare industry will play out well for owners. Times of plenty haven’t even boded well for most. Nonetheless, assessment fees for a few thousand dollars with a fast approaching due date could be the near reality. While this probably wouldn’t go over well, it’d help timeshares make up for the losses of COVID-19 quickly.
2. Will There Be An Increase in Industry Acquisitions?
Unlike most businesses, timeshare companies have been able to consistently rake in a steady stream of contractual dues since March. Despite billions of dollars in past annual revenue, immediate cost cutting measures made it appear massive revenue losses for the industry were imminent. This means they’re completely unprepared and overreacting or simply trying to save every penny they can.
Either way, timeshare buyouts are a huge possibility right now. At this point, it’s difficult to tell if hospitality chains will receive government bailouts or if strong contingency plans are in place. One thing is for sure though, entities that are currently struggling will garner attention from opportunists. If travel limitations stretch into 2021 then some timeshare operations may have to listen to acquisition offers.
When a formerly successful operation fails (especially due to sporadic circumstances), there will always be a wealthy party looking to scoop up the loss, endure and turn profit down the road. But if timeshares make up for the losses of COVID-19 through mergers or acquisitions, this could spell additional headaches for current owners. A variety of disadvantages can result from these types of transactions.
3. Will Timeshares Beef Up Their Solicitation Strategies?
The foundation of a timeshare company is its sales. The more unsuspecting people they’re able to persuade, the more money they make. Securing timeshare contracts is far more rewarding than reopening retail reservations. Once resorts are able to welcome guests again, the aggressive hunt for new vacation owners should be expected.
Outbound sales tactics, or solicitations have long been the backbone of the industry. In the upcoming months, this will more than likely increase. Active searches for timeshares are rare and sellers will be itching to take advantage of those that are eager to go on vacation after being stuck at home for months. Imagine canceling your vacation plans then receiving a call for an annual trip at a “supreme” discount.
An eager and willing consumer is easier to find when mass emails, telecommunication and other promotional means are blasted into the marketplace. Once the end of COVID-19 is in sight, you can almost bet timeshares will eagerly make up for their losses by targeting as many vulnerable victims as they can. For some, the appeal will be riveting.
4. Can Hard Pressed Upgrades Be Expected Too?
Aside from new acquisition, buyouts and special assessments, it wouldn’t be too far-fetched to see timeshares make up for the losses of COVID-19 by taking advantage of upgrade opportunities. At this point in the pandemic, they’ve probably fielded millions of phone calls regarding the future of ownership. These conversations provide timeshare “care teams” with a unique opportunity to lock owners into further obligations.
Similar to the original sale itself, owners seeking resolve tend to be misled by “deals” or conditional offers. When they’re presented with an improved package as a solution, some tend to overlook reason and forget about their current inconvenience. In reality, timeshare upgrades usually come with added contract terms that are not favorable.
If you’re considering elevating packages to improve the vacation you had to miss, make sure you research the upgrade (and terms) before finalizing the deal. It may seem rewarding but it can easily result in higher costs and the same experience. Over the years, we’ve spoken to plenty of buyers that immediately regret intriguing promotions.
5. Will Retail Travel Bookings Impact Availability?
One of the easiest ways for resorts to regroup in the aftermath of the pandemic is to limit timeshare booking and focus on retail travel. Like we mentioned earlier, millions of people will be eager to go on vacation once the economy reopens. There’s no reason to believe resorts wouldn’t make a fortune by overbooking at vacation owner’s expense.
Whether a preferred week is available to owners or not, contractual payments are still due. Clauses in the contracts themselves hold owners liable even when available is slime. It’s already one of the main reasons owners look for 3rd party cancellation services. But will timeshares make up for the losses of COVID-19 by low-stooping and creating a bottleneck in the market?
Like the other possibilities, it’s not far-fetched to assume they’ll push even more of their inventory out to third party online travel retailers in upcoming months. We already hear thousands of complaints by owners who feel as though cash paying customers have priority. Many have even been able to prove that ideal dates are only available on websites such as Expedia and Priceline.
Will Vacation Owners Ever Make Up For Their Losses?
Owning a timeshare during COVID-19 has got to be a frustrating experience. Although our intent isn’t to discourage you from optimism, it’s hard to tell if owners will ever be rewarded for their patience. The disruption to corporate earnings could spell problems for many. Those that have struggled during the pandemic should continue pursuing options with the resort. No matter how timeshares make up for the losses of COVID-19, 2021 could be a troubling year for owners.
Those that feel trapped in a contract and worried about the near future, it may help to seek third party assistance. At VOC, we provide free consultations and a straightforward qualification process for all vacation owners. Whether your mortgage is paid off or you have an outstanding balance, our attorney based services may be of value to you.