Hot off the press: here’s a timeshare article I just finished drafting. I’ll warn you; it’s a long read, but at the same time it covers a lot of ground. The “Blame the Packaging” theme might seem familiar to our subscribers…

These days, timeshares are a hot topic of discussion. Whether you’re on the Internet or out and about in the real world, you’re likely to encounter an overabundance of conflicting information on the subject.

For example, it seems like everyone has an opinion on timeshares, but no one agrees. There appears to be a significant dichotomy between two rival factions of timeshare owners. Put plainly, some people love their timeshares and others would do just about anything to get rid of them.

In no other industry do customers display this kind of love-hate relationship with a product. Moreover, there appears to be no middle ground. People will go to extraordinary lengths to either bash or praise the concept of timeshare.

Some grumble, “It’s a lousy travel scam!”

Others proclaim, “It’s the best thing that’s ever happened to our family!”

It’s clear that timeshares have developed an image problem. Turning back the clock, we can almost identify this industry’s first appearance in the sordid light of bad publicity.

Timeshare is a unique product, sharing similar features with both traditional real estate as well as hotel accommodations. For this reason, even to this day many local governments do not agree on how timeshare should be classified, regulated or taxed. In the 1970’s, when timeshares first became popular in the United States, there was no legislation in place to protect buyers from unethical contractual obligations. Furthermore, there were few internal forces regulating the conduct of the industry. Soon enough, in this “wild west” environment, the bad boys came out to play.

The legal ambiguities of the time caused many otherwise decent timeshare salespeople to bend and even break existing laws. The product itself began to suffer, as in many cases timeshare buyers did not receive the amenities, features, or quality promised in the sales presentations. Outright fraud posed a serious problem at this time. People would buy preconstruction timeshare units only to find out that they had purchased time in an undeveloped swampland. A lot of money hanged hands over fake deeds and unfair contracts, and the perpetrators disappeared.

Fortunately for the industry, lawmakers began to react to these problems, and consumer protection initiatives were signed into law in many areas of the United States. At the same time, established big-name hoteliers and others in the lodging and hospitality industries began to realize the value of timeshare, and started investing in large-scale development of timeshare resorts. These actions had the combined effect of driving out smaller, less reputable timeshare operators, while at the same time increasing consumer confidence in the product of timeshare. As a result, timeshare development and subsequent sales figures have increased consistently since the late 1970’s. In recent years, expansion has been particularly evident in areas like Hawaii, Las Vegas, and Dubai, and strong industry-wide growth is predicted for the future in many parts of the world.

However, this doesn’t mean that timeshare today is trouble-free. It is common knowledge that many timeshare sales and marketing methods, even those currently in widespread practice, are antiquated, unethical, misleading, wasteful, and sometimes just downright crooked. While timeshare has cleaned up its act since the 70’s, the problems caused by high-pressure marketing and misleading contracts are still serious enough to threaten the entire industry as a whole. Perhaps most unsettling is that the resorts themselves often exacerbate this condition rather than attempt to heal it.

Here’s how most new timeshares are sold: an OPC (short for “off-property consultant”) hangs around a busy area frequented by tourists. He or she immediately spots an easy mark, strikes up conversation, and soon offers an inducement (free tickets to area attractions, depending on location) in exchange for attendance at a timeshare sales presentation. Because he/she is paid for each person referred in this manner to the resort’s sales staff, prospects are often encouraged to lie about their level of income and marital status in order to appear eligible.

Next comes the timeshare sales presentation. Timeshare salespeople will stop at nothing to get their prospects to sign. If these people can’t afford a timeshare, what does it matter to the salesman? He is just doing his job. What neither party realizes is that this procedure is part of an inherently unhealthy marketing concept, which focuses entirely on short-term gain at the expense of long-term profits and customer satisfaction.

The staffing and free gifts alone constitute a significant expense for the resort. How is this paid for? By inflating the price of each and every timeshare unit sold. This is why, immediately following a sale, most timeshares depreciate significantly.

Here’s a financial analogy: ever heard of a “pump and dump”? This term is applied to certain stock fraud schemes. A stockbroker will acquire a huge amount of almost valueless stock. He will then proceed to hype this stock, disseminating false predictions about a dramatic increase in value within a short period of time. As a result of this hype, interest is piqued, demand for the stock rises, and so does the price. The fraudster will then unload all of his hyper-inflated stocks, profiting tremendously at the hands of investors who genuinely believed that this stock was a good investment. At the end of the day, the investors are left with worthless stock, and the crook skips town.

As a natural consequence of the resort marketers’ “pump and dump” business model, a lot of people are left with timeshares they either don’t want, won’t use, can’t afford, or any combination thereof. These folks have learned about timeshares the hard way. Suddenly, the resale value of their timeshare has abruptly depreciated by half. Furthermore, the “pump and dump” timeshare sales strategy, combined with the fast pace of resort development, has created a market vastly favoring the buyer. This in turn has made it almost impossible for timeshare owners to resell or even rent their properties.

Of course, these market conditions present a challenge to a timeshare seller. Fortunately, a resale market exists for timeshare properties. The main challenge, for most people, lies in finding it.

With buyers spread thin, a timeshare must be priced aggressively in order to sell. Not only that, a timeshare must be positioned where potential buyers can see it. This is the driving force behind successful online timeshare resale companies, where the best-positioned websites can connect the most sellers with qualified, targeted buyer traffic.

For getting rid of a timeshare, newspaper advertising does not work. Period. People read the want ads if they are looking for jobs, cars, or plumbers- not timeshares. For a successful timeshare sale, a property needs to be listed somewhere where it will be seen by potential timeshare buyers. Thanks to relatively recent technological advances made by search engines like Google, online marketing has been revolutionized in recent years. It is now possible to position a timeshare for-sale-by-owner advertisement where the only people who see it are those who are actively searching for timeshares to buy. This is what is meant by targeted traffic.

The axiom “you get what you pay for” is especially apt when comparing timeshare resale companies. At the same time, due diligence is vital when you consider working with any online company. Only choose a resale advertising company or licensed timeshare broker with a perfect Better Business Bureau record. If you are cold-called by someone purporting to represent a resale company, hang up the phone immediately, as cold-calling is often the first symptom of a resale fraud in the making.

Another common resale fraud practiced in a number of countries centers around convincing the buyer that he/she can sell the timeshare for a profit. This is simply not true. Under no circumstances should a timeshare property be considered an investment for economic gain.

Remember that any reputable online timeshare resale company will offer a money-back guarantee, in the event that the timeshare does not sell. In fact, it is recommended to only use a company offering a money-back guarantee. Not only does this save a lot of aggravation in the long run, it has the potential to screen out resale fraudsters.

Many timeshare sellers pit competing resale companies against each other, to see who sells first. The “losing” company refunds the advertising cost. This can work out to a seller’s advantage, when there are a lot of smaller, less visible timeshare sites which charge a minimal amount (less than $100) to advertise a property. The more exposure you can amass, the greater your chance of finding a buyer quickly. This is why enlisting multiple companies to advertise a timeshare for sale (or rent) makes perfect sense.

What all this means for the timeshare buyer, however, is that a wide variety of timeshares are available at surprisingly low cost. Consider that resale units can most often be bought for about half of the resort developer’s original asking price, with no sales presentation to undergo. Timeshare buyers can benefit tremendously, if they choose to “buy resale, not retail.”

In conclusion, timeshares can and often do provide a lifetime of happy vacations. Steering clear of the problems associated with the marketing of new timeshares will help keep your future vacations stress-free.

After all, isn’t that the whole point of taking a vacation?

Beware of misleading sales practices when buying timeshare directly from a resort in Mexico (or anywhere else).

“Forewarned, forearmed; to be prepared is half the victory.”
– Miguel de Cervantes 

In this business, we hear all kinds of stories about timeshare resorts all over the world. Some of these reports are positive, whereas others shed light on some of the least-favored sales tactics practiced by timeshare resort salespeople.

We hear very few complaints about the timeshares themselves. This is because timeshare resorts are serious about what they do, and they almost universally offer a quality product. On the other hand, we do hear a lot of stories about how misleading sales practices cause major problems. Each day, more and more people become entangled in a timeshare agreement which turns out to be more of a burden than a boon.

Fortunately, there is hope. Armed with the right knowledge, a smart buyer can avoid this predicament entirely.

For an example, we need look no further than Mexico. A lot of non-Spanish-speaking Americans find Mexican real estate law to be extremely confusing at the best of times. This condition is often exploited in what is referred to as a “classic” timeshare sales scam.

 For those of you who don’t know, a cooling-off period is the legally-mandated grace period, during which a timeshare buyer has the right to cancel the purchase agreement without fear of penalties or charges of any kind. In Mexico, the buyer has five days to cancel a timeshare agreement.

Cooling-off periods are fairly standard in the timeshare universe, except in some countries where timeshare development is not an established industry. Clearly, Mexico is not one of these countries. There have been many timeshares in Mexico for years now. By law, in Mexico, you cannot waive your five-day cooling-off period. Any contract which tries to get you to do so is defying the law.

Solution: find a Mexican timeshare for sale on the resale market. Mexican resorts are breathtaking, and luxury timeshares are often available for far less than new units from the same resort. Additionally, the market conditions currently favor timeshare buyers, meaning that there’s a large number of properties from which to choose. Best of all, you don’t have to attend a presentation unless you want to.

if you must buy a timeshare directly from a Mexican resort, do not sign any paperwork which waives your right to a five-day cooling-off period. Make sure you can fully understand the terms of any contract or other document you are asked to sign. In many European countries, the law states that a timeshare purchase agreement must be drawn up in the buyer’s native language. In Mexico, however, this may not be the case. Enjoy the tour, but use caution!

For more information on deceptive timeshare resort sales in Mexico, go to http://www.mexicantimesharefraud.com/

India’s government is serious about expanding their already-growing tourism industry.

The November 19, 2005, edition of Business Line, (the financial daily from Hindu Group Publications) quoted B.S. Rathor, Chairman and Principal Advisor of the All India Resort Development Association (AIRDA), who said that timeshare in India has entered a new growth phase. Between 2002 and 2005, the compounded annual growth rate (CAGR) of India timeshares reached nearly 20 percent. Rathor, and other industry experts, believe government guidelines permitting the mixed-use of resort properties as both timeshares and hotels has been a positive factor in this growth.

Expect to see marketing offices for one of India’s largest timeshare developers, Mahindra Holidays & Resorts India Ltd., opening in the US by April. New Jersey, Washington DC, and Maryland are planned locations.

According to Ramesh Ramanathan, Managing Director of Mahindra Holidays, the company’s US offices will be targeting US residents of Indian heritage. They will market their resort properties by focusing on timeshares as a way for those with relatives in India to visit and maintain ties with their culture and their families. India has used the timeshare industry of the US as a role model for their own business, including new interest in India fractionals based on the success fractionals have enjoyed in the US.

Just how serious is India about expanding their tourism market? In February of this year, India’s Finance Minister, P. Chidambaram announced the nation’s intent to support the new or furthered development of 15 tourist destinations, establish 4 new institutes of hotel management in the States of Chhattisgarh, Haryana, Jharkhand and Uttaranchal, as well as develop programs to better identify and market village crafts and products to the tourist market.

India’s economists and national leaders obviously recognize that now is the right time for India timeshares.

Timeshare industry leaders will meet in Dubai to chart a path as industry prepares for serious growth.

Resort Condominiums International’s (RCI) Middle East operations headquarters is now located in Dubai. From their offices, they oversee all of their rapidly growing timeshare business in India, China, the Middle East, East Africa, and Turkey. It is no coincidence that the April 2006 international timeshare symposium, hosted by RCI (Cendant) and Ragatz Consulting, will he held in Dubai—at the hub of much of this growth explosion.

Global timeshare industry specialists have great expectations for timeshare development in Dubai, India, and other parts of the region. During this year’s symposium, entitled “New Horizons in Shared Ownership,” officials are expected to voice timeshare industry growth expectations of more than of 50% over the next five years, with India and Dubai being pacesetter locations expected to see the greatest increases.

Preben Vestdam, President and CEO for Europe and the Middle East (RCI) says, “(timeshare) is a brilliant business model for Dubai when you think of the volume of real estate. In this region, in 10 years time, I can see there being an additional 500-1,000 timeshare resorts.”

The symposium expects to attract business investors, real estate developers, and international specialists from the timeshare industry.