Timeshares, Fractionals, and a Vision for the Future at the CRDA Conference

Last week’s CRDA Conference was great. The Canadian Resort Development Association Annual Conference was held in Victoria, British Columbia, and Steve Luba (Sell My Timeshare NOW’s director of communications) and I headed to the great northwest to be a part of it.

You might think that with the economy the way it is and some sectors of the timeshare industry experiencing real credit crunch challenges that attendance would have been down. Instead, representatives of the timeshare, fractional, and vacation ownership industries were on hand, ready to learn, network, share, and contribute to the forward vision of the industry.

As Ross Perlmutter, the executive director of CRDA stated, “I’m thrilled with the turnout of the conference. We had 170 delegates, which was up from 130 last year and everybody said to expect a downturn. While other conferences were down as much as 20 percent our numbers were up 30 percent in the midst of the way the economy is going.”

What Fractionals Have Figured Out that Timeshare Developers May Need to Understand

Much of this year’s CRDA Conference centered around fractionals and how developers can manage the growth and sales of fractionals. Dick Ragatz, president of Ragatz Associates, and industry expert on vacation ownership, delivered the keynote address. He identified that there are 300 total fractional projects with 175 in active sales in North America totaling $2.3 billion in sales in 2007. There are about 50,000 fractional owners/members in North America and the average fractional sells for $200,000 USD.

Now here’s where it gets really interesting. The average marketing cost for a fractional is about 18 to 20 percent of the sales price, compared to 50 percent marketing cost for the sale of new timeshares. This would appear to be a significantly contributing factor in why fractionals maintain their value on the resale market so much better than do timeshares.

We’ve talked about it before, here at The Timeshare Authority. Critics of timeshare are always quick to point out that timeshare resales are much lower in price than timeshares purchased new from developers – they see it as proof that this product loses its value quickly. But in reality, timeshare resales may be the product that is “right-priced” while new timeshare prices are overly marked up to cover the high cost of advertising and marketing in the way the timeshare industry has traditionally approached it.

Timeshares are great. And I am pretty sure buyers would be just as willing to purchase them without the seller giving everyone who listens to their timeshare sales pitch a free theme park ticket or discounted vacation night – especially if giving up the perks meant paying less for the timeshare itself.

We came home from the CRDA Conference with a lot of new information, new food for thought, new friends, and new business contacts. And in tomorrow’s blog post, I will fill you in on more of what we learned and who we met at this very exciting event.

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