Timeshare Trends Blog

Timeshare owners often rent first. Half of recent purchasers have rented a unit prior to buying, according to the Vacation Timeshare Owners Report, 2009 Edition by the ARDA. Also reported, recent timeshare purchasers are younger, wealthier and happy with their vacation product.

Overall, more than six in ten timeshare owners are age 45 or older, with Bby Boomers ranked as the largest generation of timeshare owners (45%). However, recent purchasers are younger than timeshare owners in general, with 58% under the age of 45.

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Timeshare division of Marriott International has hurt earnings. According to the Orlando Sentinel, Marriott International lost $466 million in the recent quarter on hefty impairment charges from its Orlando-based timeshare business, which declined drastically in the recession as vacationers cut back spending.

Marriott lost $1.31 a share for the period ending September 11 compared with a profit of $94 million or 25 cents a share a year earlier. In the recent quarter, adjusted timeshare contract sales declined 42% to $176 million, compared with $49 million in the prior year quarter.

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Despite tighter credit markets and high unemployment rates, the U.S. timeshare industry continues to demonstrate its resilience.

Although overall sales continue to reflect the national trend of lower consumer spending, timeshare owners continue to enjoy their pre-paid timeshare vacations, with an 80% occupancy rate and an 86% product approval rate. This compares with a 60.4% hotel occupancy rate, according to Smith Travel Research.

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Experts continue to paint a bleak picture of the industry’s financing operations as discussed in recent meetings where timeshare executives gathered for the 11th Annual Vacation Ownership Investment Conference recently held at the Peabody Hotel in Orlando.

Not much has changed since the capital markets ceased last fall, making it difficult for timeshares to fund development and sales. The good news is that, after a year, developers have at least adapted to the new conditions. Because of a lack of financing, timeshare developers deliberately slowed sales this year. Total industry sales this year are likely to total between $6 billion and $8 billion, which is equivalent to sales in 2004.

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Recent surveys of the timeshare industry demonstrate continued owner satisfaction. The timeshare industry uses various types of studies to measure timeshare guest or timeshare owner satisfaction. The State of the Vacation Timeshare Industry: United States Study 2009 is prepared by primarily using data provided by the timeshare resorts, timeshare developers, and management companies, through a survey commissioned by the ARDA International Foundation (AIF) and conducted by Ernst & Young LLP.

The study has demonstrated that there is continued owner satisfaction with timeshares. One fact cited by the study point out that 41% of timeshare sales are from timeshare buyers who already own a timeshare with that developer. The AIF report also showed that timeshare resorts were able to add timeshare units and that timeshare occupancy rates have actually increased, with approximately 67% of resorts being at least 80% occupied, and 40% having occupancy of at least 90%.

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Among the vacation ownership sales leaders reporting in the recent Sales Leader Survey conducted by Vacation Ownership World magazine, timeshare ownership sales declined at a 5% rate from 2007. Fractional sales volume fell by 9%. This is the first time since the survey started in the early 80s that ownership sales have decreased.

The timeshare industry has been heavily impacted by the worldwide economic downturn and credit freeze. Despite the discouraging news, there was still more than $8.5 billion in vacation ownership sales in 2008. Wyndham Vacation Ownership led the way with $1.987 billion in sales followed by Marriott Vacation Club International with $1.163 billion and Hilton Grand Vacations with $585 million.

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