Banner days are back for the
timeshare industry. According to the recently published State of the Vacation
Timeshare Industry: United States Study 2015 Edition, in 2014, the last full
year for which data is available, the U.S. timeshare industry grew faster than
the economy. U.S. GDP growth in 2014 was 2.4 percent, while the study estimates
U.S. timeshare industry growth at a strong 4 percent. Total sales volume
increased from $7.6 billion in 2013 to $7.9 billion in 2014. Since 2010, sales
volume has been rising steadily. It was $6.4 billion in 2010; $6.5 billion in
2011; $6.9 billion in 2012; $7.6 billion in 2013; and $7.9 billion in 2014,
recording a compound annual growth rate of 4.3 percent over the five year
period. Timeshare sales volume peaked at $10.6 billion in 2007 and fell
significantly in the next two years due to the recession – hitting a floor at
$6.3 billion in 2009. Since then, the industry has undergone a steady
resurgence. 2014 marked the fifth straight year of increases in sales volume.
With sales on the upswing, re-sale growth has been rising as well.
Timeshares offer the opportunity
to own or have use of a vacation home for a set time every year on a recurring
basis. The American Resort Development Association (ARDA) calls them ‘vacation
ownership’ and explains in a promotional brochure: ‘Owning a timeshare is your
ticket to better vacationing. This means an ever-expanding choice of
accommodations, amenities, locations, pricing, use plans, and timeshare
exchange. You can tailor vacations to meet your lifestyle needs and travel
dreams at more than 5,000 resorts in almost 100 countries around the world.’
Many timeshare contracts give the purchaser a deeded interest in real estate
and grant ownership rights in the property at a fraction of its total cost. The
timeshare owner will pay an annual maintenance fee. The typical timeshare
arrangement is for a week or two. Longer periods are referred to as
fractionals. Large resort owners who develop the properties will usually offer
programs that allow timeshares to be traded. Someone who owns a timeshare to a
property in Florida may do a swap with someone who owns a timeshare to a
property in Hawaii. This is a large market, since, undoubtedly, preferences
change over time. As the old saying goes, variety is the spice of life.
The anecdotal evidence seems to
suggest that selling a timeshare is not so easy, however. Data on the resale
market is difficult to obtain, but, judging from the prices, it’s a buyer’s
market. According to Redweek.com (http://dtn.fm/2c3MG), which bills itself as
the largest online marketplace for timeshares for sale, ‘Timeshare re-sales…
are typically priced 30-50% below the original developer or resort price.’ A
story (http://dtn.fm/Pg0Jk) in Kiplinger backs that up: ‘With brand-name
developments, such as Disney, Marriott and Wyndham, you typically pay 30% to
50% less than the developer’s price. You’ll save more money buying from a
lesser-known developer – probably 50% to 70% off the property’s price when it
was first put on the market.’
There are two large exchange
companies, Interval International and RCI (formerly Resort Condominiums
International), that offer both timeshares by developers and those for re-sale.
Typically, timeshare owners are allowed to save or ‘bank’ vacation time for use
in a subsequent year. This is usually a prerequisite to trading the timeshare.
But FlexWeek (OTC: FXWK) allows owners to share and exchange their timeshares directly
with other owners and non-owners alike. The FlexWeek platform eliminates the
need for timeshare owners to bank unused weeks with existing high fee trading
networks such as RCI and Interval International. FlexWeek is a true
peer-to-peer network that empowers individuals to arrange travel with one
another based on true supply and demand metrics.
FlexWeek is a pioneer in the
global peer-to-peer (P2P) marketplace with the introduction of a unique
platform that allows timeshare owners to discover, book and offer unused
vacation time directly to the public and other timeshare owners. This approach
eliminates the need for timeshare owners to use costly trading platforms while
potentially reducing unused timeshare inventory.
For more information, visit www.flexweek.com
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