For a long time, the timeshare industry liked to brag that it was recession proof, or at least recession-resilient. After all, there was some financial sense in buying a timeshare now, in order to lock up vacations in the future. Even as the recession began, time share executives remained upbeat. Credit markets hadn’t yet completely frozen. And the good news, it seemed, was that even three decades after the real beginning of the time share boom in the 1970s, only a small percentage of homeowners in the country owned time shares, according to the web site nreionline.com. Good news, right?
But a recent article in Time magazine and on its web site, time.com, revealed the true picture for the timeshare industry: like so many other areas of the economy that rely on the credit markets, time shares are in the middle of a downward spiral.
The Time article followed one couple purchasing a timeshare who thought it might be a good time to check out the resale market to see what kind of deal they could get on a Hawaii time share. They were familiar with a timeshare at Mariott’s Ko Olina Beach Club on Oahu and saw that it was listed at about $50,000. Working with sellmytimesharenow.com, they paid only $18,400 for the unit. That sale illustrates what’s happening in the timeshare industry, according to time.com. It’s a buyer’s market now, as sales have fallen, which means the number of time shares has drastically increased in the past six months. New units are becoming more and more difficult to sell. After all, why buy a new unit when timeshare owners are practically giving their units away in order salvage some money and make a sale, Time reported.
Additionally, more and more people are defaulting on their timeshares in the recession, according to Time, which reported that defaults on loans reached 12 percent in March, an increase from an 8-percent rate at the end of 2008. And the forecast for the rest of 2009 is for much of the same. Even some of the biggest players in the industry, companies like Starwood Hotels & Resorts Worldwide and Marriott, are reporting significant drops in timeshare sales For Marriott International, the final quarter of 2008 saw a 32 percent drop in sales. Starwood Hotels reported a 48 percent plunge in time shares in the fourth quarter, according to Time.
The timeshare (Tug) user group also recognized on its web site that timeshares are getting battered by the recession. Why is selling a timeshare so tough? The Tug web site points out that in addition to the supply and demand issue, another factor is that maintenance fees continue to increase. The reality, according to the web site, is that timeshares are virtually impossible to sell. But to give yourself a fighting chance, the web site urges sellers to work on the only aspects of a time share transaction they can control – price and advertising.
Do diligent research to make sure the price is reasonable, and not just an attempt to get back all the money you spent in the first place. What are other units in your building or in your area selling for. Be realistic and choose a competitive price. Remember the example from the Time article: a buyer checking out the resale market isn’t going to pay more for your unit than others that are being more heavily discounted. Choose some reputable timeshare publications and consider classified ads in craigslist or your hometown newspaper.
And then, according to Tug, you could do one last thing as you try to sell your timeshare: Pray.
