Timeshare is a very simple concept that began several decades
ago and is a great way millions of individuals and families
vacation every year. Most people purchased their week(s)
from an established development company or on the secondary
market. The focus of this article is to discuss resale, which
remains the single most significant issue confronting the
industry today.
A Little History
Developers first began marketing timeshare by using a variety
of methods including but not limited to direct mail and
telemarketing. Normally the solicitation included some form
of give away or premium to entice individual prospects or
customers to attend a sales presentation. In many cases
these presentations, or tours as they are called, ended up
being a painful sales experience. This is not a point we
will spend any time discussing. Bad sales practices are shameful
regardless of industry. We will, however, discuss the reasons
timeshare resales do not mirror those of general real estate.
Marketing
The cost of marketing has been and remains the most significant
variable in the ability to sell timeshare. Notice we did
not mention “profitability” to sell timeshare.
Many a developer has gone out of business as a result of
ineffective or inefficient marketing practices. For example,
if an individual paid $10,000 for their timeshare and the
marketing cost was 50% to 75%, that was $5,000 to $7,000
before other costs. The conclusion is the only way for successful
and not so successful companies to sell this product is
with expensive marketing programs. If you do spend marketing
and advertising dollars as developers do, you will never
come close to recapturing your original purchase price.
The Price
As we have discussed above, the sales price is originally
determined by the developer and includes all their cost
and a profit. We know that the largest part of that cost
is sales and marketing cost. What does the market say about
pricing? Well it’s not very encouraging unless you
happen to be one of the few who owns in an area of very
strong demand and little supply. It’s sad but true
that inventories remain high with individuals or companies
who want to sell and significantly less demand for this
time. The way the product was originally sold (high sales,
marketing cost and over supply) and over supply has placed resale prices
on the low end of the original sales price. Prices can and
do vary by location, quality, and supply and demand.
The Solution
The best solution to sell your timeshare is to attempt
to sell it yourself. Yes, there are many companies that
will attempt to sell your timeshare but very few are successful.
The following methods are the best way to advertise and
market and will yield the best results.
• Advertise locally or regionally in classified newspaper
or trades. You control how much you are willing to spend
to try and sell your week.
• Place an advertisement on the internet.
• Sell it or give it to a relative or friend.
The number one way individuals divest themselves of their
property is by transferring title to a friend or relative.
A Word of Warning
There are many individuals and companies that claim to be
in the resale business. Some do have success, however, that
number pales in comparison to those who fail. Many of these
companies charge up front marketing, listing, appraisal,
advertising fees, etc, but in no way guarantee results. Another tactic utilized is to offer an alternate product
and the pitch includes taking your week in as a trade. Free
is also another big catch word. Free may mean free now but
at some point someone has to pay.
Something to Think About
The true value in timeshare is about a vacation. We all
need rest and relaxation from time to time and our definition
may vary about how we accomplish this goal. It is important
to remember the positive attributes about owning timeshare.
A spacious condominium in some great resort locations is
still considered a luxury. Its highest and best use is a
flexible vacation week that can be exchanged. If you believe
that you have had good vacation experiences, then you should
share it with all who have interest.
