The timeshare industry is one of the fastest growing sectors in the travel and tourism industry. This growth has been attributed to several factors such as favorable demographics, technological advancements, and the increasing demand for a vacation-oriented lifestyle.
Despite the growth of this market, there are some challenges faced by the industry. These challenges include overcoming weaknesses in sales processes and costs, taxation concerns, and room amenities.
Sales and billing practices should be improved to reduce the cost of selling and maintaining property. Advances in Internet technology and use should be explored to provide new methods for reducing these costs and improving owners’ satisfaction.
In addition, the industry should continue to study owners’ desired amenities balanced against the accompanying maintenance costs. These efforts should also focus on attracting the right customers.
Another challenge is to develop a system for exchanging vacation weeks among owners. The exchange program is an important part of the vacation ownership experience.
The timeshare industry has grown from a niche market in the 1970s to a worldwide industry with more than 5,000 resorts and more than 2.5 million members, according to ARDA. The growth has been fueled by the emergence of exchange companies such as Resort Condominiums International (RCI) and Interval International.
With the emergence of these companies, many other hotels and resorts began incorporating timeshare features. However, the concept has not become fully accepted by the general public.
In fact, some critics of the timeshare industry say that the timeshare model is outdated and has little appeal to people who want to have a diversified vacation portfolio. They argue that the timeshare model is too restrictive and imposes a lot of unnecessary obligations on consumers.
Consumers are also concerned with the financial impact of vacation ownership and the ongoing maintenance fees. Some are considering switching to a different vacation product.
Although the industry is undergoing a transitional period of consolidation, there are still many opportunities for investors to pick up shares in companies that offer a variety of vacation ownership properties around the world. For example, Travel + Leisure has 245 vacation properties across the globe and could be an attractive option for investors seeking a high-growth equity strategy.
The Timeshare Market is forecast to grow at a CAGR of 5.7% from 2018 to 2022, rising from $68 billion in 2017 to $110 billion by 2022. The growth rate for the timeshare market is predicted to accelerate due to the millennial population and the rise of urban vacation ownership properties.
Nevertheless, the industry continues to face challenges, including changes in consumer behavior and an increase in competition from other hospitality companies. This, in turn, may affect the market’s growth.