Ask RedWeek / January, 2020

What is a legacy resort?

I've heard my timeshare referred to as a "Legacy Resort." What does that mean?

Legacy resorts are the backbone of the timeshare industry — and if you've been an owner for 25 years or more, you're automatically an owner at a legacy resort. If you recently bought a resale on RedWeek.com at an older seaside or mountainside resort, chances are great you're also a legacy resort owner.

In almost all cases, legacy resorts, circa 1960 to 1990, are no longer affiliated with a major developer or travel club. They are single sites, managed by an HOA board of resort owners who are elected by the membership and rely, heavily, on an all-purpose general manager or a professional management company. Legacy resorts managed by experienced management companies tend to fare better, financially, than those that are managed by individual board members.

Legacy resorts also typically have "sunset provisions" in their governing documents that call for the expiration or termination of the timeshare association after a fixed term (e.g., 40 years). Many of today's legacy resorts are facing these imminent termination clauses and trying, with mixed results, to extend them. Others are just running the clock out to the end of their timeshare era.

According to the industry's lobbying arm, the American Development Resort Association, there are 1,580 timeshare resorts in the United States. While there is no direct count of legacy resorts, it is safe to say that the majority of those 1,580 are older, aging timeshares. Without drawing attention to it, industry insiders expect 10 or 15 percent to fail.

Many are still flourishing — particularly those in high-value, prime-destination vacation areas. But they all face common challenges, including an aging owner base that is dropping out, year by year, increasing defaults and foreclosures that put extra financial burdens on the remaining members. Many older resorts also need major repairs (new roofs, room updates, and plumbing) that are difficult to finance without a robust, and paying, owner base. One additional fact of life for older resorts: many members are averse to paying increasing maintenance fees to pay for repairs that are vital to their resort's survival.

That's a stark contrast to the overall developer health of the timeshare industry, where retail sales (of newer timeshares) have increased 10 straight years to a total of $10.2 billion in 2018, with higher numbers expected for year-end 2019. Almost all of those sales are packaged in points-programs that give buyers access to a network of vacation resorts. Legacy resorts, meanwhile, are typically tied to fixed-week, fixed-unit vacations that used to appeal to the majority of timeshare buyers. Today's buyers want flexibility, fun on-site experiences, and options for multiple vacations in numerous destinations. Fixed-week programs are nearly obsolete in 2020.

Points Replace Weeks as Timeshare Currency

The "points" product is just one of many changes in the timeshare universe that impact legacy resorts and their owners. Today, most major developers are experimenting with shorter-term lease and right-to-use products that do away with the lifetime-forever structures of original timeshare contracts. This is a direct response to a changing buyer marketplace populated by younger travelers who shy away from lifetime commitments.

Due to this sea-change in sales, the road ahead will not be easy for legacy resorts tied to the old business model.

To stay relevant, struggling weeks-based legacy resorts must find ways to replenish their owner base by attracting new buyers. This means, at a minimum, implementing resale and rental programs that bring new heads into their beds. HOA boards must also find ways to finance all current and future repairs, as needed, to keep up with an extremely competitive travel market. In the age of the Internet, with comprehensive timeshare resources such as RedWeek.com, the strengths and weaknesses of every resort are visible to owners, renters and potential buyers. This is why, industry experts say, many legacy resorts are aligning themselves with major travel clubs and developers — brand-name companies with resources and experience — to manage their way through 2020 and beyond.

4 Comments

  • Avatar for annee90
    annee90
    Jan 13, 2020 (10 months ago)

    What are the top 10 Marriott properties to rent

  • Avatar for phyl21
    phyl21
    RedWeek Team
    Jan 13, 2020 (10 months ago)

    You can view the top 25 resorts on this page:

    Top 25 Resorts

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  • Avatar for harryh113
    harryh113
    Jan 16, 2020 (10 months ago)

    I own 105,00 points with Club Wyndham access. This is fully paid off. I am interested to get out of the contract. I know I can go through the Ovation program to dispose of this "property" and just walk away. They have offered me another option (Limited Edition) that at first sounds good. The catch is I have to pay for another 6 months of maintenance fees. After that happens they say I will receive a new 3 year contract with no fees for the duration of the term, and after that time it will terminate. This will cost me about $450. Currently I have 21,000 points available, and I will not receive new points until 10/1/2020. Can anyone give me feedback regarding this choice? I'm also looking for another option if there is one.

  • Avatar for terryh218
    terryh218
    Jan 18, 2020 (10 months ago)

    Wyndham's buyout programs are some of the best in the industry - they're safe (no scams) and leave you with no negative credit rating plus the ability to still use your time for the add'l 3 years (as you mentioned) if you desire that course of action. If not, Ovation will give you a portion of your money invested back...

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