Author: Staff Contributor

This is the second in a three-part The Timeshare Authority blog. (Read Timeshare Sales and Developer Strategic Responses – Part I) Part II looks at how different timeshare developers and timeshare sales companies are adapting to meet the challenges of difficult economic times.

Marriott Timeshare, Starwood, Wyndham Vacation Ownership And Others

While not every timeshare company enjoys the depth of the Disney corporation with its worldwide network of theme parks, entertainment, and retail merchandise, many of the big dogs in the timeshare industry do have other revenue streams in addition to booking hotel room nights and selling timeshare.

According to the Orlando Sentinel, companies including Marriott Vacation Club International and Starwood Vacation Ownership are adapting to the credit crunch by reducing or eliminating certain incentives for timeshare buyers to finance timeshare through them. At the same time they are making it less inviting to use the timeshare developer as a financing source, they certainly haven’t stopped financing timeshare sales altogether.

Wyndham Vacation Ownership along with Westgate Resorts have had to dig deeper to compensate for the fact that many prospective timeshare buyers are unable to obtain financing. Both Wyndham timeshare and Westgate timeshare have laid-off thousands of employees and in some situations, closed timeshare sales offices.

Orlando timeshare company Sol Meliá, with timeshare resorts in the Europe, Mexico, and other top destinations worldwide, is responding to the credit crunch by restructuring interest rates. Sol Meliá is now typically requiring larger down payments from timeshare buyers.

Sell My Timeshare NOW – the Defacto Solution in Timeshare Resales and the Secondary Market

Already the industry leader in online advertising and marketing of timeshare resales and timeshare rentals, Sell My Timeshare NOW, continues to work to help consumers buy, rent, or sell timeshare in affordable and effective ways. We are also expanding our services, working with timeshare developers, offering proactive, business-to-business solutions for the secondary market.

We are living in challenging economic times. All of us – businesses, consumers, support services, and suppliers – need to work together, ride out the storm, and plan for the better days ahead that we know are coming.

In the final installment of this series, The Timeshare Authority looks at how timeshare sales trends and tactics at some development companies may be changing the patterns of timeshare buyers. Watch for Part III tomorrow.

This is the first in a three-part The Timeshare Authority blog post taking an in-depth look at how the timeshare industry is weathering the US economic recession. Part I begins by looking at some very insightful information that appeared in HOTELS magazine earlier this month on the current state of timeshare sales and the timeshare industry.

In an article on 2/1/09, HOTELS Magazine observed that as recently as last October, they were still reporting that vacation ownership (timeshare sales) “defies the downturn“. Candidly, it seemed to most people in the timeshare industry that the historically proven success of timeshares sales would carry the industry through this economic recession. Here at The Timeshare Authority, we were delivering much the same message. In so many ways, it appeared that the proven strength of timeshares sales would even help some hotelier/developers compensate for weak hotel bookings.

But as the HOTELS article so aptly put it: “And then the sky fell.” Howard Nusbaum, the American Resort Development Association (ARDA) President explained, “We’ve never had a situation like this before, where we’ve been unable to monetize consumer paper. There were timeshare developers who were still having robust sales, but there was no way to monetize the consumers’ debt, so those developers had to slow their sales down. That has been very problematic for the industry.”

People didn’t lose their desire and interest to buy timeshare and timeshare developers weren’t failing in their goal of keeping plenty of enticing new timeshare resorts on the market. Instead, there simply wasn’t the available credit to finance the purchase of new timeshares. And the problem hit everyone … at least to some degree.

Disney Vacation Club Timeshare Dealing with the Challenging Economy

The Orlando Sentinel reported that in December, even Disney Vacation Club hit a snag when a line of credit the company had used since 1999 expired and was not renewed. In the past, Disney Vacation Club has helped approximately 75 percent of its timeshare buyers finance their purchase. Timeshare sales averaged between $20,000 and $30,000 for one-week of timeshare ‘ownership’ in a two-bedroom timeshare unit at a Disney timeshare resort.

After helping timeshare buyers take ownership of new timeshares, Disney Vacation Club often bundled timeshare mortgages together and resold them to investors. This securitization of mortgages was a source of profit for Disney Vacation Club timeshare, and according to the Sentinel report, “Disney Co. Chief Financial Officer Tom Staggs said during a December conference with analysts that the practice generated about $40 million in operating profit last year for Vacation Club.”

But Disney Vacation Club has the wherewithal of the Disney corporation behind them as a safety net. The depth of the company enables them to carry timeshare mortgages instead of selling them for profit. By doing this they will still realize the proceeds from the financed timeshare sales; it will just take the lifetime of the timeshare mortgage rather than the quick cash-out available when the mortgages are resold.

How much does this really hurt Disney Vacation Club timeshare? According to Morgan Stanley financial analyst, Benjamin Swinburne, Disney Vacation Club timeshare will see a “small increase” in 2009 rather than the estimated 18 percent growth it experienced last year.

In tomorrow’s The Timeshare Authority post, we will look at measures other timeshare companies are taking during these challenging times.

Dennis, MA, like other popular timeshare vacation areas, is looking for ways to balance timeshare sales opportunities with the peace and privacy of those who pay to vacation there.

In the beachside community of Dennis, Massachusetts there have been recent discussions about “timeshare OPC’s”. Dennis is not the first community with concerns about where and how timeshare OPC’s operate.

In the timeshare industry, the person who sets up timeshare sales presentation appointments by connecting with prospective timeshare buyers in public venues is generally known as an OPC. The initials stand for off-premises contact or outside public contact depending upon whom you ask. This person may be an employee of the timeshare company or may be either a temporary or a contract employee of the company. They deal in sales of new timeshare only, not timeshare resales or timeshare rentals.

OPC’s frequently operate from a hotel desk or hotel lobby, or from a kiosk in a high traffic tourist area. An OPC rarely offers mini vacations or reduced rate vacations, but will more likely be recruiting you to attend a sales presentation, either at the timeshare resort or at a nearby location in return for a gift. As a ‘thank you’ for your time, you typically will be offered something of value, such as restaurant passes, tickets to shows or theme parks, or occasionally merchandise like luggage or small electronics. The Timeshare Authority reported recently on a move by Bluegreen timeshares to hand out prepaid credit cards (in conjunction with Maverick Network Solutions), to people attending some Bluegreen timeshare sales presentations.

But Dennis, like many communities, is concerned about where people are approached by the OPC trying to sell Massachusetts timeshare. For example, you cannot approach someone on the beach or while he or she is in a car … such timeshare sales solicitation violates a Dennis town bylaw.

Accorded to Wicked Local Dennis, which reports on news from a number of Massachusetts communities, Dennis Police Capt. Bill Monahan says, “They (OPC’s) drive around the Sea Street Beach and Glendon Road Beach parking lots, approaching or stopping cars and trying to persuade people to go to timeshares …”

Dennis city officials theorize that since the fine is only $50, many of the solicitors don’t mind paying it. If a case goes to court, the fine can be as much as $300. But because the person solicited has to be willing to testify in court, many people don’t wish to take the time off from their jobs to appear in court or, as visitors from out of town, won’t travel back to Dennis for a court date.

The Timeshare Sales OPC and a Solution that Works for Everyone

Certainly in this job-tight economy, no community wants to prevent a hardworking timeshare sales person from working. Nor do they want the tourists, who feed the revenue base of their communities, feeling annoyed or pressed by enthusiastic timeshare sales representatives.

The popular timeshare vacation destination of Gatlinburg, TN. has tried an interesting solution. They provide visitors with free lapel buttons that say “No thanks” as a way for them to signal OPCs that they do not want to be approached. (see: The Timeshare Authority Thanks, But “No Thanks” to Timeshare OPC’s, March 20, 2007.)

Many happy timeshare buyers made their purchase during a vacation after being approached by a timeshare sales OPC. As a marketing tool, timeshare companies have successfully used this method for many years. Like any other aspects of business, this sales tactic may have to be rethought over time to best serve the needs of prospective timeshare buyers and to better serve the changing needs of timeshare developers. In the end, the goal must always be to achieve a win-win-win for communities, consumers, and timeshare sales people.

Marriott Vacation Club International (Marriott timeshare) is not letting the challenges of the economy stop expansion plans for their Las Vegas timeshare, near the famous Vegas Strip.

A popular Las Vegas timeshare, Marriott’s Grand Chateau on Harmon Avenue, is moving ahead with exciting expansion plans. Construction of a third and then a fourth tower will soon double the size of the existing timeshare resort.

According to the Las Vegas Sun, Marriott’s Ed Kinney says ground will be broken sometime in 2009 for the third tower with the fourth tower scheduled to be developed after that. Kinney cites the Grand Chateau timeshare as Marriott Vacation Club International’s highest-grossing property in 2008, totaling $110 million in timeshare sales.

He also noted that demand by current timeshare owners as well as new timeshare buyers from Asia were influential in the timeshare company’s decision to expand at this resort.

A Las Vegas Timeshare with South of France Style

Designed to have a French Riviera-style elegance, the Grand Chateau lives up to its name with its ornate entrance and lavish lobby complete with fine art works, fountains, and a rich stone floor. In the heart of Vegas glitz and glitter, this Marriott timeshare offers you a cool and elegant retreat at the end of your day.

At build-out, the Las Vegas timeshare resort will include four, 37-story towers with a total of 895 timeshare villas The resort includes one, two, and three-bedroom timeshare villas that typically include a full kitchen, 42-inch plasma television, separate living and dining areas, washer and dryer, and an oversized soaking tub.

Timeshare resales and timeshare rentals are currently available at the Marriott Grand Chateau at dramatically reduced prices.