Good News for the Middle Class Could Mean Good News for Timeshare Real Estate

This month’s edition of the Harvard Business Review included a very interesting article about the future of tourism both in the US and internationally. With the dark clouds of recession never far from view, it is very good news to hear knowledgeable experts forecasting positive trends in travel and vacationing.

Paul F. Nunes is an executive research fellow with the Accenture Institute for High Performance Business in Boston and London-based Mark Spelman is the global managing director of Accenture’s strategy practice. Together, they researched and wrote, “The Tourism Time Bomb”, which appeared in the Harvard Business Review’s April 2008 issue.

To understand their predictions, you have to start with the fact that they are forecasting the global emergence of a new middle class who will be shopping for vacations and travel. To quote their words, “Indian call-center employees, Russian petrochemical engineers, Chinese middle managers, and Brazilian salespeople are already scouring the web for deals on trips.”

Add to this list the changes in Cuba, (discussed in Saturday’s Timeshare Owners Blog) the American baby boomer, who is relatively insulated from the current US economic situation, Canadians who are enjoying a strong Looney, and other populations worldwide who are or will in the future be spending their money on travel and vacations. Suddenly, it begins to make sense that the United Nations is projecting that the annual number of international tourist visits will nearly double and reach 1.6 billion by the year 2020.

Could A “Bomb” Explode and Shower Us with Timeshare Resorts?

Nunes and Spelmen see three scenarios that could occur because of a surge in vacationing or what they call, “the tourism time bomb”.

The first possibility is that demand for hotel rooms in popular venues will outstrip supply. They go on to explain that the lodging crunch could become so tight, a new type of scalper could emerge, selling hotel rooms, air fares, and other travel related items at whatever top dollar the market will bear.

If this seems hard to imagine, remember that it is already happening in some segments of the travel industry, with the 2007 American Express Global Business Travel Report forecasting an 11 to 14 percent increase in the cost of travel for 2008. Can you envision a future where hotel room nights are pedaled at black market prices?

What A Travel Boom Will Mean to Timeshare Owners

If the predictions of Nunes, Spelman, American Express, or the United Nations turn out to be even halfway correct, then I can only see this as great news for timeshare owners. Timeshare owners will be ahead of the game because they own their vacation or travel accommodations, at a locked in price. These timeshare units will have been purchased at pre-escalation prices and if they were wisely bought as timeshare resales, then the timeshare owner will be even further ahead. When and if the timeshare owner decides to sell timeshare as a resale, he or she may find that the market has become extremely “seller friendly”.

The Tourism Time Bomb definitely gives us food for thought and paints the picture of a future environment that is beneficial for timeshare owners and timeshare real estate in general.

Check in on tomorrow’s Timeshare Owners Blog. I will share further information from this fascinating report and look at the other two travel industry scenarios the authors project.