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The Path of Timeshare Industry


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The Path of Timeshare Industry

  1. 1. The Path of Timeshare Industry
  2. 2. If you are wrong everyone will have forgotten what yousaid by the time it happens anyway. Having gotten thatmajor disclaimer out of the way, lets take a look at the industry and try to make some sense out of it.
  3. 3. The industry really got started almost thirty years ago inthe United States. Many real estate developers lured by the vision of being able to sell a $100,000 condo for $500,000 jumped in. Not realizing they were in the marketing business in which they were inexperiencedrather than the development business they didnt do all that well and many went under. The few who really understood what they were doing did very well. Some built sizable timeshare empires.
  4. 4. Then the industry started to mature. The major hotel chains such as Marriott, Hilton, etc. decided they werelosing way too many of the vacation lodging customers totimesharing. They also had a perfect vehicle to insure thebrand loyalty they had been spending so much to achieve. With their huge resources they effectively drove all but a few of the smaller developers out of the business. Thelargest independent developers are still doing very well in spite of this. Now where does the industry go from here?
  5. 5. Prediction #1: The chains and the largest developers will continue to grow and to offer more widely appealing products such as points systems and multiple locations.Their pricing levels will be in the $12,000 to $25,000 rangeper yearly timeshare week. The biennial sales (every other year) will still enable them to also gain the lower end of this market.
  6. 6. In the meantime, the developers overlooked a simple, logical by-product of their millions of sold timeshares. That is the resale market. Some of these originaltimeshares were sold twenty-five years ago to people who were in their seventies at the time. They simply cannot use the product any more. Further, since it was/is a real estate product which theoretically never dies, there are many good reasons to have to sell and move on.
  7. 7. General real estate brokers took a look at this timeshare resale market where the whole resale price is about a third of a selling brokers three- percent commission on ahouse and simply ignored it. Owners wishing to resell then had nowhere to turn. There was no marketing system. As a result, prices plummeted. People who had not reallypaid too much to the developer (after all they didnt really make a killing) could now sell for only a fraction of what they had paid.
  8. 8. Enter the scammer. These folks who seem to always be the first into any new arena promised the timeshare sellers anything they wanted to hear in return for anadvance fee of from $300 to $5,000. If you went for one of these deals dont feel too bad. So did I and I should know better. I sent $350 to a company in Florida who put an ad in the Orlando shopping news for $9. That was the whole shake of the dice. It was also when I decided to provideviable solution to the resale problem...namely to provide a straight-ahead resale brokerage which would get paid when the timeshare was sold. Fortunately there were others around the country that thought the same way.
  9. 9. The resale business is now developing along these lines. As more honest brokers get into the resale business, they will become a group who will drive out the bad apples.They may even get something like a Resale Multiple Listing Service together. There are already some indications of this on the Internet.
  10. 10. Prediction #2: The good guys will drive out the bad guys.
  11. 11. Years ago, condominiums were in about the same place as timeshares are today. Eastern lenders wouldnt finance condos and many brokers wouldnt sell them. After all, how could you sell or finance part of a building? Now the same argument is heard in relation to time in part of a building. It too will pass and the time will come when it iscompletely normal. Further, the price of resale timeshares, which is now at ridiculously low levels, will increase asthey become more accepted. The gap between the pricing of new timeshares and used timeshares will narrow.
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