The timeshare industry has come a long way since its inception. In recent years, technological advancements, growing trends in business travel, social sharing, and a greater focus on health and wellness have fueled this growth. The timeshare industry has also witnessed the entrance of several big players, which have been acquiring smaller resorts to boost their market share and expand their customer base.
According to a report by HVS, the timeshare industry is expected to rebound and make a healthy recovery as international tourism recovers. This has been fuelled by rising internet penetration, improved economic conditions in developing countries, and ameliorating consumer confidence levels. The report predicts that the timeshare industry will grow at a rate of 25% in 2021-2024 as the industry continues to benefit from pent-up demand for travel and leisure.
Timeshares are a popular vacation option among baby boomers who have the disposable income to afford these luxury stays. However, they do not come without their share of critics. Some of these critics have cited high upfront costs and ongoing maintenance fees as their main reasons for not wanting to purchase a timeshare. Others have objected to the fact that timeshares are not a viable investment because of their illiquid nature and limited liquidity. These criticisms have not stopped people from exploring their options when it comes to buying or selling a timeshare.
Aside from generating a significant amount of revenue for companies like Wyndham Destinations, the timeshare industry is a substantial contributor to the economy. In 2005, the American Resort Development Association (ARDA) reported that combined direct, indirect and fiscal impacts for timeshares in the United States totaled $92 billion, including $62 billion in consumer spending, 565,300 full- and part-time jobs and $21.5 billion in wages and salaries.
With an average unit cost of $22,180 and annual sales of $10.5 billion, the timeshare industry is a lucrative one. Approximately 9.6 million households in the United States own a timeshare, with 67% of owners reporting that they are satisfied with their purchase. According to the ARDA International Foundation (AIF), there are 5,669 timeshare resorts in operation around the world.
If consumers were made aware of the actual lifetime financial obligation that they are entering into when purchasing a timeshare, many would choose not to invest in this product. However, the lack of disclosure often results in consumers relying on verbal information presented by salespeople to guide their purchasing decisions. This practice is unethical and can leave consumers with a bad taste in their mouth.
Timeshare industry insiders primarily credit the industry’s growth and acceptance to the entry of large branded companies, such as Marriott, Starwood, Hilton and Disney, into the market. These big names have added a level of credibility to the industry and boosted consumer awareness and trust. This in turn has led to the increase in sales and a rise in the popularity of the industry. The industry has also been helped by the advent of new technology, which has allowed for greater flexibility and convenience for users when it comes to booking their vacations.