Timeshare (DOC) by sturesearcher

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									Contemporary Issues in the Timeshare Industry

Minh Phoung Lai (Sophie) and Bavisha Nemdharry (Sharon) Certificate in International Hospitality and Tourism Operations HTMi Switzerland

Travel is always a very important part in our life. It leads to the incessant development of tourism today and one of the most popular types is timeshare. Timeshare is a property that belongs to joint ownership of people who use it at different times (MSN Encarta 2009). A timeshare brings many benefits for people. Initially, owners have rights to use all facilities of their timeshare freely. When they do not want to use their timeshare, they can rent it out to others and earn money. For example, a person who owns a timeshare allows him to use it some weeks during the year. Nevertheless, only a few weeks are used and during other times, this location is vacant. So, in this period, the property can be rented to other users and it becomes highly profitable. In addition, the timeshare owners may exchange their vacations with others. In fact, around 80% of owners buy timeshare for exchange purposes. Timeshare has existed for five decades and it has strong effects on economy all over the world. This article will discuss the contemporary expansion of timeshare today.

Issues of Time-share Industry
Timeshare Development Overall, timeshare has a long and firm development. The first conception of timeshare originated in a ski resort in the French Alps in the early 1960’s. After some faltering projects by the 1970’s, timeshare became an increasing popular

holiday alternative (Timeshare Sales Today 2009). It then spread to the United States where after it spread worldwide. The World Tourism Organization has called timeshare one of the fastest-growing parts of the travel and tourism industry. Since the 1980’s, the annual rising rate of timeshare has been over 15% while those rates of hotel accommodations and tourism have been only 2% and 4% respectively (Goelder & Brent Ritchie 2006). In a report of The American Resort Development Association, there are over 5000 timeshare resorts in 95 countries. Most of them, about 1590 resorts, are located in United States while Europe shares the second position with around 1250 resorts (Goelder & Brent Ritchie 2006). However, the timeshare market there has shown signs of saturation whereas Australian has become the top list of US timeshare tourist with the most sought-after destinations currently (Gold Coast 2009).

Timeshare Attractions Owning a timeshare actually brings many benefits for people. Initially, timeshare today have numerous forms. They can be a hotel, motel, condominiums, town houses, single-family detached homes, campgrounds, boat or yacht. Therefore, this is quite flexible and attracts a larger range of customers. Furthermore, owners have rights to use all facilities of their timeshare during the vacation. It seems rather suitable for family or group holidays and in fact, over 80% owner are married while 80% of which have two or four children (Stroman realty inc 2009).

On the other hand, when they do not want to use their timeshare, they can rent it out to others and retain profits. In addition, timeshare owners may exchange their vacations with others. By trading the timeshare through exchange companies, people can travel throughout the world. Specifically, Resort Condominiums International has about 3,500 member resorts and Interval International has 1,800 member resorts. They are the most famous ones, which operate 1,600,000 exchanges per year (Timeshare Sales Today 2009). This leads to the popularity of exchanging timeshare today. Lastly, people can resell timeshare to others. Currently, the resale market of timeshare is very popular, especially when it has the participation of great hospitality chains such as Hilton, Marriot, Disney, and other companies in the United States as Hyatt, Four Seasons, Ramada, Accor, and Starwood (Goelder & Brent Ritchie, 2006). They invest and improve the value of timeshare. Currently, buying timeshare has become very common. Firstly, customers can find information about timeshare extremely easily. For example, surfing by Google just in 0.17 seconds, people possibly get 12,600,000 results for timeshare. It helps people choose the most appropriate locations. Secondly, there are a great number of prices for timeshare that are suitable to each type of customers. Normally, a timeshare costs about 10000 to 20000 dollar (Holiday 2009). As a result of this, the target market is upper middle or middle class. For example, in America, 95% timeshare owner owns their home and household income is 85,000 dollar (Goelder & Brent Ritchie, 2006).

However, through the timeshare resale market, customers can save more than 50% budget because over 50% original price goes toward marketing and sales fee (The Timeshare Market 2009). It is quite appropriate for middle class customers. Furthermore, sometimes, surfing on Internet helps customers buy substantial low price timeshares which just costs about 30% original price (Holiday 2009). The reason for this could be that these timeshares are undiscovered places. Thanks to this, the lower income class also can buy timeshare. The advantages from buying timeshare lead to customers’ satisfaction. In a survey of the National Timesharing Council, over 85% of ten thousand timeshare buyers said that they were satisfied or very satisfied with their choices. While about 40% comment that they like to purchase extra timeshares. Furthermore, there are some organisations such as the Australian Securities and Investments Commission that is willing to protect customers from fraudulent companies. It can image that buying timeshare can be a safe investment in future.

Influences of Timeshare Timeshare is a large industry, which strongly affects the economy. This leads to particular benefits for timeshare owners in the future. Firstly, the number of customers who buy timeshare is increasing. The United States is an example of that. In 2007, there were about 6.5 million owners while the new ones rose to 4.7 million (TravelDailyNews International 2008). This means people have more choices in exchanging vacations as well as buying resale timeshare.

Otherwise, the average price of timeshare resale has been increasing incessantly. Between 2003 and 2007, it grew from around 7000 to more than 9000 dollar (RPMLS.com 2009), and created a great profit for the United States, over 10 billion dollar in 2007 and employed more than 12 million persons. In Australia, although generally tourism has been decreased recently, the demand of buying timeshare is still very high. To illustrate, the occupancy rate at Gold Coast, a timeshare company, is almost 95% at this time. Consequently, this company provide a direct and indirect output of about 320 million dollar per year for local economy (The Timeshare Authority 2009).

Timeshare in the Future In general, it can be predicted that timeshare development will be rather optimistic. Although the economic crisis has affected tourism industry, there are many reasons that make timeshare market increase hopefully. Initially, demographic variables have positive influences on timeshare. Particularly, Baby Boomer and Gen X segments continue to mature that possibly leads to developments of resorts and family holiday. Moreover, the pre-paid nature of timeshare products makes customers believe their purchases are useful and hence, are more easily persuaded to buy timeshare. Besides that, numerous famous brand names of major companies such as Hilton, Marriot and Disney affect the customer in terms of their strong brand image and the loyalty towards these (Lodging Hospitality 2009).

When these companies continue investing for timeshare market, customers feel safe to buy timeshares. Geographic factorisation is also an advantage for expanding timeshare. Currently, nine unban locations and 18 vacation destinations in the United States which fall into top 100 tourist locales have not offer timeshare resorts yet. It probably leads to new promising timeshare destinations in future. Finally, more than 109 million American households who have 50,000-dollar income have not purchase timeshare yet. It puts them into prospective potential customers (The Timeshare Authority 2009)

In conclusion, timeshare industry has an important role in tourism today. It has improved quite strong since the 1980’s. Especially, it has created huge profits for the United States and tended to expand substantially in Australia recently. There are a great number of benefits of owning timeshares. Owners can buy timeshares with various prices depend on their financial abilities. They can enjoy the holiday, gift it or rent it out to get money. Moreover, they can exchange timeshare destinations and travel around the world or resale timeshare. Besides that, owning a timeshare probably creates profits over the long-term when the timeshare price tends to increase. Timeshare development influences the economy positively and creates job opportunities. Lastly, it can predict that timeshare market will continue improving in future thanks to demographic, geographic factor and consumer behaviour such as belief or personality segments.

It is clear that a larger portion of tourism suppliers and retailers should focus on the developments of the global timeshare industry so as to take advantage of an ever-increasing trend towards this choice in holidaymaking. It is expected that top destinations would be the focus of this expansion, but non-the-less, a look towards rising economies, outbound tourism and emerging locations would be necessary to harness these markets and potential clients. This clearly calls for a detailed research effort into this industry, where clear “first-mover advantages” may be found.

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