2018 Timeshare Industry Statistics and What It Means for Owners
Coalition to Reform Timeshare Staff | September 17, 2019

The timeshare industry just released its annual report for sales and other performance stats, and, no surprise, the 2018 report supports developers’ contention that all is well within the timeshare universe.  At the same time, the report is silent on most of the issues that plague owners who express dissatisfaction with their timeshares and/or want to get out of their contracts.

Here are some of the key metrics, as reported by the American Resort Development Association (ARDA), the industry’s trade group and lobbying organization in Washington, DC.

• Retail sales increased 7 percent in 2018 to $10.2 billion as the industry recorded its ninth straight year of growth. Which means, barring a catastrophic change in the travel economy this summer, the industry is now enjoying its 10th consecutive year of growth.  Rental income grew 4 percent in 2018, and that $2.4 billion segment of the industry is growing as people realize that they don’t need to own a timeshare to use them.  Instead, they can rent.
• Owner satisfaction — which is not clearly defined — stayed steady at 83 percent. The report makes no attempt to identify the issues that might explain the industry’s 17 percent dissatisfaction rate.
• The average price for a one-week interval was $21,455, up slightly from 2017.
• Maintenance fees, meanwhile, averaged $1,000, another slight increase.
• Occupancy rates reached 80.8 percent, compared to 66.2 percent for hotels.
• More than 9.2 million families own timeshares, with many of them owning multiple intervals that are used within 1,580 timeshares based in the US and hundreds more in Mexico, Canada and Europe. Fifty-three percent, or 834 resorts, participated in the survey.  Nearly all of these, 759 resorts, said they belong to a family of 10 or more resorts.  This means that most of the older, smaller and independent resorts did not respond to the survey.

Here’s what the report left out.

Legacy resorts, representing 70 percent of all timeshares in the US, are struggling to find a sustainable business model. These are being led, for the most part, by HOA board members who are well-meaning but NOT experts in running vacation businesses.  Among their challenges: an aging owner base that is literally dying off and, in most cases, unable to sell or get rid of their timeshares.  Many HOAs have inadequate rental and resale programs to recycle timeshares that fall back into possession of the HOA, either voluntarily or through foreclosure.  Worse, HOAs get no support from the developer timeshare companies that are still selling intervals as if they are golden investments worth the average price of $21K.  Legacy resort timeshares sell for $500 to $1,000 — if they’re lucky.

In the eyes of the major brand-name developers, legacy resorts are invisible, minor nuisances to be tolerated and dismissed.  But they are a significant part of the industry’s reputation overall, revealing fissures in a secondary market that is OK for some owners, bad for most.  If you can sell a used car for a reasonable amount, why can’t deeded-week timeshare owners sell their weeks for 10 percent or 20 percent of what they bought them for?  Why do many of these weeks end up on e-Bay for only $1 and are still not selling?

Here are some answers to what’s happening in the timeshare market

First, there is no annual report from ARDA on the status of the secondary market, because all of the numbers would be bad — and they would underscore the ugly fact that timeshares are over-priced in the first place, sold at retail prices that collapse the minute they are sold.  This is a glaring gap in ARDA’s annual survey.  The survey also provides no information about the demographics of the timeshare universe.  This kind of data would help explain why thousands of older owners are trying to get out of their timeshares.  Individual companies talk about their recent successes in attracting younger travelers (under 40) but all of their reports are anecdotal.  They frequently tout numbers of recent sales to new buyers who are Millennials, but never provide a full picture of total ownership.  Our estimate — based upon what public timeshare companies say about their ownership base — is that the average timeshare owner is 55 or older, while a whopping 30 percent or more are over 65.  Moreover, 50 percent or more of all new sales go to existing owners.

Companies, and owners, are going online to monetize unused timeshares

In a trend that is bound to grow, timeshare companies and HOAs are aggressively using alternative travel sites to market inventory.  According to the survey, 47 percent of the resorts are using online travel agencies to put additional “heads in beds”.  The leader in providing alternative timeshare reservations is VRBO, which is partnering with 44 percent of the resorts.  Airbnb is right behind with 43 percent, followed by hotel leasing, 22 percent, and travel clubs, 18 percent.  This outreach complements resorts’ use of social media to advertise rentals — but only 65 percent are using social platforms to publicize rentals.  The rental market is big and getting bigger.  According to the ARDA survey, timeshare companies rented 12.1 million nights in 2018 for $2.4 billion, which is equivalent to 20 percent of its retail sales ($10.2 billion). This begs the question, why should people be locked in a lifetime timeshare contract if the resorts can simply rent it out? And why do resorts make it so difficult for someone to simply book their timeshare, when it is often easier to book as a non-owner on Airbnb?

Meanwhile, longtime timeshare owners are also taking advantage of online rental-and-resale sites to monetize, if not unload, their intervals.  RedWeek.com, one of the larger resale and rental sites, has more than 2.6 million subscribers.  According to RedWeek’s annual review of timeshare trends, the rental market is booming at topline timeshare resorts, but sales are consistently flat across the board. Bottom line, there are more units for sale on the secondary market than buyers. That depresses prices — as well as owners who always expected to get some of their money back when they needed to sell.  The resale market is also restricted by the arbitrary transfer fees and usage restrictions that major developers impose on resale properties.

Exit Industry Grows as Developers Drag Their Feet on Exit Programs

Three years ago, in response to owner demand and bad publicity, several developers introduced exit programs for their members.  But these programs have not solved the exit issues for many owners, which is why third-party exit companies have signed up thousands of members who are desperate to divest their timeshares.  The industry’s reluctance to embrace and resolve exit issues — as a consumer service — is also why the Coalition to Reform Timeshare launched its campaign to help consumers.

Rather than improve their own exit programs or work with legitimate exit companies, developers such as Diamond, Wyndham and Welk, among others, are actively suing exit companies for, allegedly, interfering with owner contracts.  ARDA, the official mouthpiece of the developer industry, has simultaneously increased a public relations campaign to “warn” consumers about the perils of using an exit company.  Seven of ARDA’s last 10 press releases, dating back to September 2018, are direct attacks against exit companies.  (ARDA has not attacked the Coalition, yet, but that announcement will surely come.)  Several of ARDA’s announcements are about legal crackdowns on fraudulent exit companies however their real goal seems to be to scare consumers away from working with any exit company – even though many exit companies legitimately help people out of their unwanted timeshare.

Industry rooted in Florida but has operations in 48 states

The timeshare industry started in Florida, and that’s where it still thrives as the home to 31 percent of all US timeshares. That’s also where the industry has the most clout, both politically and with local communities, because of its contribution to jobs and taxes.  According to the ARDA survey, there are 371 timeshares in the Sunshine State, which dwarfs #2, California, which has 134 timeshares.  They are followed by South Carolina, 113, and Hawaii, which has 100 timeshares.  The top ten also includes Colorado 74, Nevada 62, Missouri, 55, North Carolina, 53, Arizona, 49, and Texas, 48.  At the other end of the spectrum, three states support one timeshare each: Nebraska, Ohio and South Dakota.

The only states with zero presence — or value — on the timeshare horizon, are Kansas and North Dakota.  What these data points mean, in total, is that perennial timeshare industry issues — particularly high-pressure sales tactics and inadequate exit programs — impact people in all 50 states.  Which is why the Coalition’s call to reform the timeshare industry is relevant for people in every state of the Union.

“The timeshare industry, for over 50 years, has perfected the art of selling overpriced timeshares to thousands of people who, over time, cannot afford them,” said Brandon Reed, founder of the Coalition.  “Now it’s time for the industry to provide fair, reasonable and affordable exits for longtime owners.”