Ask RedWeek / January, 2017

What happened to the timeshare world in 2016 and what can we expect in 2017?

Happy New Year! With a new president on the way, we are likely going to see sweeping changes across the U.S. Can you share your overall thoughts on the timeshare industry in 2016, and what we can expect in the year ahead?

Happy New Year 2017 to all RedWeek subscribers, followers, and readers. May your maintenance fees stay manageable while your rentals and resale values increase.

If 2017 is anything like 2016, the new timeshare year will be chock full of changes that impact owners across a broad spectrum of issues.

So, what was last year like? It offered a lot of everything, from corporate consolidation and economic expansion to exit programs (for owners) and executives whose companies caught the wrong headlines. Here are some selected trends from the dearly departed Timeshare 2016 that are likely to continue in 2017.

Consolidations & Spin-Offs

There was major consolidation (and disruption) throughout the developer world as bigger companies gobbled up smaller ones (e.g., ILG bought Starwood, Diamond acquired Club Intrawest) while others quietly tried to take over high-value legacy resorts such as the still-under-siege Tahoe Beach and Ski Club in northern California. The industry also expanded, both economically and structurally, with several companies choosing "asset-light" strategies where, instead of building expensive new timeshares, they partnered with existing clubs and resorts to expand their inventory to timeshare owners. These moves seemed to improve cash flow while reducing long-term debt that would otherwise fund multi-year resort buildouts. Most of the major timeshare companies also expanded their footprint in urban areas (typically by taking over and renovating existing hotels) to boost inventory beyond the traditional week-at-the-beach family timeshare experience.

There were also several major timeshare spinoffs (Vistana, Hilton, etc.), where brand name hospitality companies jettisoned their timeshare businesses to become stand-alone entities. In addition to spinoffs, there were a few corporate takeovers, buyouts, executive firings, HOA bankruptcies, lawsuits and a sprinkling of timeshare legislation across the country.

Sounds like Wall Street, right? Nope, just another year in timeshares.

Mother Nature Struck Hard

Not to be outdone by economics, Mother Nature weighed in heavily on the timeshare landscape in 2016. The winds and water from Hurricane Matthew ripped apart numerous resorts along the eastern seaboard, while a late-November Tennessee forest fire in the Smoky Mountains scorched two-thirds of Westgate's Smoky Mountain Resort in Gatlinburg and forced the evacuation of 900 guests (with no injuries). To its credit (and the work of 1,100 employees), Westgate reopened part of the resort in mid-December while continuing a massive reconstruction project to replace 652 units and 70 of 90 buildings that were destroyed by the fire... and apparently don't plan to ask owners to foot the bill. The only major structures that were spared were the check-in building, swimming pool, and Wild Bear Falls Indoor Water Park.

Straightforward Sales Pitches, Same Demographic

Are timeshare sales tactics, one of the most criticized elements of the timeshare industry, going through any changes? This reporter deliberately attended a half-dozen brand-name timeshare pitches in 2016 and came away unscathed, but much better informed about some of the differences between the major retailers. The average minimal purchase point was $22,000 at all of the presentations, "discounted" by same day incentives from $30,000.

The tone of the sales teams was calmer and more straightforward than in prior years, which was a big positive. The most revealing part of the presentations was the overall demographic of the attendees, who were typically middle-aged or senior citizens willing to add to their timeshare portfolio. What the industry says it needs, going forward, is a new formula — and a persuasive message — that will fill those sales salons with younger couples and millennials. But they were in short supply at the presentations RedWeek attended.

Crime and Punishment in the Resale Market

On the resale front, criminal corruption cases continued to dominate news headlines as federal and state agencies chased fast-moving scammers in the third-party resale market. Most of these cases, including a Federal Trade Commission case filed in late December, were filed against individuals and companies who charged thousand-dollar upfront fees to help people get rid of their timeshares, then failed to deliver on their telemarketing sales pitches. In the FTC case, prosecutors alleged that the principals of Florida-based Pro Timeshare Resales bilked timeshare owners out of $15 million, then refused or ignored requests for refunds. In New York, meanwhile, the state Attorney General's high-profile investigation of possible fraud at the venerable Manhattan Club stretched into its third year (with no real end in sight as of year-end). For more information on the club's legal travails, check RedWeek's forums on the Manhattan Club.

Wyndham's Exit Program Gains Traction Among Owners

In a development that was monitored closely by the entire industry, Wyndham got positive traction in 2016 for its owner-exit program, called Ovation, that was initially rolled out quietly as an experiment in 2015. The program enables owners in good standing to relinquish their timeshares once and for all. While not every owner qualifies for Ovation, more than 20,000 club members successfully deeded back their timeshares to Wyndham through the no-fee program. Another 15,000 investigated whether it would work for them. The program's numbers jumped in 2016 due to Wyndham's conscious decision to promote the program on its website in 2016. Feedback from RedWeek owners who enrolled their week in Ovation was mostly positive, with owners reporting quick closings, no up-sale hassles, and immense relief to walk away from future maintenance fees. However, and as could be expected, some RedWeek members complained that the deed-back program only benefits Wyndham (by giving the company free inventory to resell). Others objected on grounds that their timeshare should be worth more than $0.

The vast majority of timeshare owners don't have access to Ovation, so they are generally on their own when grappling with the inevitable questions that hit them after 20 or 30 years of generally happy ownership: My kids don't want it, so what do I do with this timeshare? How can I get rid of it? Should I hire an attorney? I get calls from companies all the time who want my timeshare, but can I trust them? How much is my timeshare worth? Can I just walk away?

RedWeek to the Rescue for Sellers and Renters

This is the exact spot where RedWeek lives, and why it has 2.3 million+ subscribers, offering resale and rental services to owners who no longer use their timeshare intervals as much as they used to. This pool of owners is expanding every month as original buyers "age-out" or drop out of the active vacation world. The overall population of timeshare owners in the US, according to the industry's lobbying group, is 8 million spread across 1,500 resorts.

The good news about the overall market is that timeshare rentals are robust and continue to grow in popularity. Rentals provide a practical financial safety valve for owners to cover their (rising) maintenance fees. For people willing to use RedWeek's DIY or Full Service Rental program, renting is a smart way to go until the industry addresses the overall resale puzzle.

As many individual timeshare owners know, from practical experience on or by working with reputable realtors, the overall resale market was relatively flat in 2016 due to oversupply (which depressed pricing) and restrictions imposed upon resale buyers unilaterally by major timeshare developers. As a general rule, first-class timeshares in superb locations (i.e., Disney in Orlando, Marriott, Hilton, and Westin in Hawaii, Hyatt in Breckenridge and Lake Tahoe, and Wyndham's Bonnet Creek in Orlando), continue to sell on the resale market, but at nowhere near their original retail prices. Many intervals at older legacy resorts, in contrast, languish from the lack of a market.

The crime and constipation of the secondary market, according to longtime owner advocates, is largely a creation of major timeshare companies that, for years, have deliberately refused to provide loyal owners with a dignified way to get out of their timeshares. Owners who want to get out can pursue their own avenues of re-selling, but without a lot of developer support. Publicly traded timeshare companies openly admit (in quarterly and annual earnings reports), that a healthy resale market is a direct threat to their retail sales.

Wyndham's Ovation program is an innovative first start to making a change in the industry's approaches to the secondary market. One over-riding question for 2017: will other timeshare developers follow Wyndham's lead in providing solutions for longtime owners, or will they continue to deliberately hamper the resale market?

Resale Scams Continue

The resale market is also threatened, daily, by the cunning but unethical tactics of resale and transfer companies that prey on longtime owners who are desperate to dispose of their timeshares. The emergence of these scammers has actually served to achieve something that is rare in the industry: it has united developer, industry and consumer advocates on the need to educate owners about resale scams.

All responsible timeshare advocates caution owners to use common sense when dealing with third party companies who promise to help sell or rent their timeshare. Companies that charge $1,000 - $3,000, or more, in upfront fees should be avoided at all costs — and reported to local consumer protection authorities. A handful of attorneys who represent owners in contract beefs with developers charge similar fees, but often they deliver on their promises. These attorneys, in general, are overwhelmingly loathed by the developer industry — but that's because they tend to get their clients out of their contracts and threaten to expose unethical business practices in order to do so.

Name That Timeshare, But Call it Something Else

Here are some examples of high-level corporate changes afoot in the industry that may have trickle-down impacts on owners and timeshare travelers. The names are changing, so read carefully.

Diamond Resorts, a formerly public company that was profiled in the New York Times, in January, for using high-pressure sales tactics on buyers and legacy resorts, was bought out by a giant Wall Street equity firm, Apollo Global Management, and taken private. Since the buyout, Diamond's two top executives, founder Steven J. Cloobeck and CEO David Palmer, have stepped down with multi-million-dollar paydays for their services. (Oddly, though, Diamond still uses Cloobeck's voice message on its answering machine when the live operators are busy. And that message still identifies Cloobeck as founder and CEO.) Palmer will be replaced by Matt Avril, former head of Starwood's timeshare operation. In late December, Diamond announced the departure of two other executives, and the appointment of another Starwood alum, Kenneth Siegel, who will join Avril as executive VP, chief administrative officer and general counsel.

So what does it all mean? The new Diamond may start acting a lot like the old Starwood, including adopting Starwood's focus on high-end resorts and customer service (something that owners and Diamond critics say was sorely lacking from Diamond's sales-oriented corporate culture).

FYI, Starwood no longer exists. It was bought by the Interval Leisure Group (now ILG) in 2016, then rebranded as Vistana Signature Experiences, offering all Westin and Sheraton timeshares formerly owned by Starwood. That purchase put ILG on a fast-track to become the pacesetter in high-end timeshares, because it also owns the Hyatt Residence Clubs and Aqua Aston hospitality chains, along with other properties. ILG is also the corporate parent of Interval International, the world's second largest exchange company. That's a lot of timeshare firepower.

In a surprise move, Wyndham CEO Franz Hanning was terminated Nov. 28, one day after the New York Times ran a long story on a $20 million California jury verdict against Wyndham. The case was filed by a longtime Wyndham sales rep who claims she was fired, wrongfully, after she objected to some of Wyndham's sales tactics, particularly against elderly customers. While Wyndham plans to appeal the case (or settle out of court), the public PR damage has already been done. And as for Fanning, a likeable CEO if ever there was one in timeshare, he took the fall for an embarrassing development that reinforced negative perceptions about the industry.

Finally, in a move to gradually rebrand the entire industry and its points products, many timeshare companies deliberately dropped the "timeshare" word from their lexicon of travel terms. Hilton Grand Vacations, Marriott Vacation Club, Interval Leisure Group, Vistana Signature Experiences, Disney Vacation Club, Hyatt Residence Club — the list of non-timeshare speaking timeshare companies is endless. Instead of selling timeshares, these companies and an emerging group of travel-and-vacation clubs are now selling memories and experiences, resorts, family reunions, cruises, golf tours and guided trips to China through their ever-expanding points programs. In terms of language, it's all a bit fuzzy, but expect it to continue in 2017.

The Trump Effect

Donald J. Trump's election as president is not expected to have a direct impact on the timeshare industry — after all, he's in the real estate, casino and hospitality business. But his decisions with regard to reducing business regulation could have widespread consequences.

Here's one example: The Consumer Financial Protection Bureau, formed in the aftermath of the mortgage banking crisis of 2008, is the consumer watchdog agency that exposed the phantom sales operations at Wells Fargo Bank (which led to the ouster of the bank's CEO and many other executives). The agency was created to regulate financial, credit and lending practices. But in reality, it has started investigating overall business practices of some companies, and industries, ostensibly to protect consumers. One year ago, it launched an investigation of Westgate Resorts and started subpoenaing corporate records, including those governing timeshare sale practices. Westgate filed legal papers challenging the CFPB's authority to investigate its (and, potentially, the timeshare industry's) business practices. That's where the case sits as the world approaches inauguration day.

Last summer, in the midst of the CFPB probe, the Republican Party adopted a GOP platform that called for dismantling the CFPB and its supposedly over-broad regulatory authority. Without referencing the CFPB by name, Trump promised throughout the campaign that he would promptly roll back regulations that hurt American businesses.

RedWeek in recent weeks interviewed consumer advocates as well as industry leaders about their perspectives on Trump's approach to the CFPB and similar consumer regulations that impact business. They held nearly unanimous expectations: Trump and the GOP-controlled Congress will try to enact legislation that would limit the CFPB's authority and create a commission to oversee its activities (now, the CFPB director is only accountable to the president). They also predict Trump may fire CFPB Director Richard Cordray, perhaps during the first few weeks of his administration.

Trump's transition team has already spoken publicly about taking action to reign in the CFPB. The only question is when. Given Trump's proven unpredictability, the action could be anything, at any time. Regardless, the timeshare world will be watching.

So with that finale, have a happy new year, indeed. And pay attention to the calendar. Your 2017 maintenance fees are due, right now.

About the author

This answer was provided by RedWeek contributor, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of


  • Avatar for gilberta5
    Jan 10, 2017 (3 years ago)

    Thank you very much Mr. Weir for helping us all to understand a little better as to what's going on with timeshares in general. Gil Curtin

  • Avatar for myront8
    Jan 10, 2017 (3 years ago)

    Excellent article

  • Avatar for chrisb481
    Jan 10, 2017 (3 years ago)

    Very informative

  • Avatar for janicep35
    Jan 10, 2017 (3 years ago)

    Thanks for the enlightening overview

  • Avatar for geraldinea6
    Jan 11, 2017 (3 years ago)

    Wish that I had this information before getting rid of a timeshare - at a cost of $4500!! We only had 6600 points but in retrospect we're very much ripped off. Thought it was a good move because of who vouched for the company through advertisements promoting them, Dave Ramsey. Guess not!!!

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  • Avatar for donnaj24
    Jan 11, 2017 (3 years ago)

    Great information. Have had our initial timeshare for 22 years and have added more since. We bought them to use, not as an investment as some of the sales people tried to tell us. We have encountered many very shady salesmen, one of which was unbelievable rude, and called us stupid when we suggested his resort needed landscaping because it had no outside appeal. It has become an embarrassment to admit we own timeshares. People think we were duped.

  • Avatar for tomw374
    Jan 11, 2017 (3 years ago)

    Very worth reading!!

  • Avatar for deem89
    Jan 12, 2017 (3 years ago)

    So interesting. Thank you.

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  • Avatar for debrag63
    Jan 24, 2017 (3 years ago)

    Thank you, thank you, thank you for this balanced report on the state of timeshare ownership. I plan to print it and share with my husband and adult children, as we go forward on educating them about what they most likely will inherit.