Timeshare Execs Bullish on Growth and Owner Satisfaction

published on June 13, 2019 by .

Fifty years old and going strong! That is the take-home message from the timeshare industry’s annual gathering of execs, sales and marketing folks who gathered here recently to celebrate the industry’s accomplishments during its tenth consecutive year of growth.

At the same time, the industry’s leading CEOs lambasted the emergence of exit companies that take advantage of longtime customers who want to get out of their timeshare contracts.  The CEOs also promised to step up their legal attacks to eradicate unethical exit firms and their lawyers.

The mix of good and threatening messaging — both of which were greeted enthusiastically by an audience of 1,700 industry reps — set the tone for the American Resort Development Association’s annual conference, known as ARDA WORLD.

The industry’s 2018 performance numbers, released June 4 from ARDA’s headquarters in Washington, DC, buttress the CEOs’ optimism about the future of timeshare.  The key metrics are:

  • Retail timeshare sales rose 7 percent to $10.2 billion in 2018, which represents a decade of growth since the crash of 2008.
  • Owner satisfaction, driven in part by the new “experiences” that developers are offering owners, reached 83 percent.
  • The average selling price for a one-week interval was $21,455 while maintenance fees continued to average about $1,000 per interval in 2018.
  • Timeshare occupancy rates hovered at 80.6 percent, which dwarfs the hotel industry’s occupancy rate of 66.2 percent.
  • More than 9.2 million US families own timeshares, including many that own multiple weeks or intervals.  Overall, these owners can vacation in 1,580 US-based resorts (half of which are based in Florida, the mothership of timeshare) plus hundreds more internationally.

As Diamond Resorts CEO Mike Flaskey said at ARDA World’s executive Q and A session, “It’s a great time to be in timeshare.”

Diamond Resorts is aggressively leaning on tech’s “big data” to learn about, understand, and create customized programs for customers.  Diamond’s also promoting “events of a lifetime,” onsite concerts and other special programs to entertain owners. A great side benefit of these new owner options, Flaskey said, is a huge jump in upgrade sales to existing owners. Other companies are actively chasing Diamond’s lead in creating special vacation experiences for owners, which they all cited as a mandatory part of their timeshare toolbox.

In addition to relying on high-tech tools, the industry is now being led by a new generation of CEOs who are younger, hipper and much tech-savvier than their predecessors.  In a symbolic sign of this transition within the upper ranks of the timeshare industry, ARDA’s 18-year CEO, Alan Nusbaum, officially retired at ARDA World, to be replaced immediately by Jason Gamel, former general counsel for Wyndham Destinations.

One of Gamel’s first jobs, (based on his recent public statements) will be promoting the industry’s “Responsible Exit” initiative, which is designed to help customers who might otherwise fall prey to the pitches of unethical exit-and-cancellation companies.

According to the execs who spoke publicly at ARDA World, companies are also, finally, making inroads to develop business models that should attract Millennials, the up-and-coming buyer generation that, to date, is allergic to lifetime timeshare contracts.  Diamond, for example, is already beta-testing a 10-year lease program, Flaskey said.

But it wasn’t all optimism at ARDA WORLD.  Several CEOs are seeing red at the rise of exit-and-cancellation companies that advertise heavily on the radio and Internet sites to solicit owners to help them (maybe) get out of contracts. While no numbers were provided to substantiate the threat posed by exit companies, all of the CEOs at ARDA World promised to press their legal attacks upon companies that (allegedly) interfere with customer contracts.

“The disruption that we have seen within our industry has come from meanness, has come from badness, has come from people that can’t get a job on Main Street that have gone over to the dark side,” Flaskey said.  “In our world, we have made a decision, we’re not going to sit back and stand for it. We have filed 11 lawsuits against these rogue third-party exit companies. Of the 11, we have gotten permanent injunctions to shut seven of them down. We’ve had two lawyers disbarred because a part of this whole scam are lawyers that are in the middle of it that are nothing but paper pushers.”

“In the end,” he added, “these (exit company) people are charging people from $5,000 to $60,000 to do something…that all you have to do is call my company, or any of our companies and we’ll give them a way to transition, or to have dignity to exit, and get out of their timeshare if that’s what they want to do, without these folks having to come in unethically and take money from them.”

Mike Brown, CEO of Wyndham Destinations and Tom Nelson, CEO of Holiday Inn Club Vacations, voiced similar concerns about the exit industry. Wyndham, is suing some exit companies for allegedly interfering with customer contracts. Nelson complained about the “fraudulent” claims made by unnamed exit companies in radio ads. Both men said they would support an industry PR campaign to blunt the negative advertising messages and promote positive stories about the industry.

Last fall, the industry unveiled the “Responsible Exit” program, which is designed to help educate customers about ways to navigate a transition out of their lifetime contracts.  Unfortunately, these programs are not universal, they are not guaranteed, and they don’t apply to all owners. In effect, almost every company offers some kind of exit alternative; each one is unique.

These issues keep owners up at night, particularly the elderly.  According to the execs who spoke at ARDA WORLD, these issues also keep them up at night, too. Combating the negative narratives pursued by exit companies, they said, is their number one priority for 2019.

Another plank of the anti-exit company campaign will be promoting the Responsible Exit program. Participating companies all claim to have workable exit programs for owners and, importantly, they ask owners to contact their home company, first, before engaging with any exit company.

They also urge owners NOT to sign up with any firms that require up-front fees for their services. The existing exit programs include surrenders, deed-backs, hardships and, in some cases, buy-backs.  But, as noted above, these programs differ company by company.


Author

Jeff Weir is a RedWeek contributor.

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