In its 50th year of existence, the timeshare industry is making a comeback after the recession.
The concept of timesharing enjoys its unofficial 50th anniversary in 2013. In celebration, the industry is working hard to complete its comeback from the devastating recession of five years ago.
Today’s definition of a Timeshare is when an investor pays upfront for vacation stays at a variety of resorts in different locations for a specific period of time depending on the size of the investment. The Timeshare is “owned’’ for a specific number of years, usually ranging from 30 to 40 years. The first “timeshare’’ was believed to be created in Switzerland in 1963, although the term “timeshare’’ was not coined until 1973.
The industry enjoyed steady growth from the 1960s until the Great Recession. Because it was an investment over a long period of time and involved time away from work, the industry believed itself to be recession-proof. That belief turned out to be wrong.
According to Craig Johnson, Editor of Inside the Gate, an online timeshare news reporting website, the recession more than halved the industry’s sales numbers and the recovery from it is not yet complete.
“Over the last two years we have made up a lot of ground, enough so that cautious optimism is being expressed and expansion is beginning again,’’ Johnson said. “But by way of comparison we're still about $4 or $5 billion away from where we were (in 2007) and there are fewer (but larger) active developers still in the game.”
Johnson said the industry’s peak was in 2007, when it reported almost $11 billion in U.S. timeshare sales. “Some, maybe most in "the biz", got so over-confident they considered it "recession proof" and bragged to that effect,’’ Johnson said.
However, one year after the peak, industry sales dropped to 4.6 billion in 2008, less than half the previous sales totals. Many properties were shuttered, and smaller timeshare companies went out of business.
The larger companies survived but cut back severely on expenditures, in many cases firing sales reps and closing sales rooms and call centers. Most expansion projects were put on hold.
Through the recovery, many abandoned properties have been bought by established names and rebranded, allowing the big-name timeshare programs to expand without building their own new properties.
Today, the timeshare industry sees that its growth is dependent on the attitude of the consumer, who is uncertain of the stability of the recovery.
“There is a very tight correlation between consumer confidence and people’s inclination to pull the trigger on a time-share purchase,’’ said Marriot Vacations Worldwide president and CEO Steve Weisz.
There is another factor that bears upon the domestic timeshare business. While Baby Boomers were enthusiastic investors in timeshare properties, Generation X investors are more involved in international travel.
Almost all timeshare programs today operate on a points program where investors pay for “points’’ that can be used on available days, and the amount of time an owner can vacation is dependent on the number of points he buys. Also, most programs operate a wide range of vacation locations.
Most of the largest American timeshare corporations – Disney Vacation Club, Hilton Grand Vacations, Marriott Vacations Worldwide, Starwood Vacation Ownership and Wyndham Vacation Ownership – are based in Orlando, Fla.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.