The timeshare industry has seen enormous growth over the years. Despite economic recessions, inflation and political unrest, it continues to flourish. In fact, the US timeshare market hit $10.5 billion in sales in 2019, a 3% increase over 2018, according to the ARDA.
The future of the timeshare industry remains uncertain. This is especially true with the upcoming generations, who may not be interested in buying a vacation home on a scale comparable to their parents.
Today, major branded companies such as Disney, Hilton, Starwood and Marriott continue to grow in popularity, but they also face a tough business climate. As the millennial generation enters their prime, developers are trying to change their product offerings to appeal to this group.
They are also working to improve their marketing strategies. They are targeting younger buyers, who often value spontaneity and are less likely to commit to a lifetime contract.
In addition, resorts are tinkering with short-term products that appeal to this group of buyers, including floating weeks that include major holidays and rotating weeks that offer owners more flexibility in choosing the week they want to travel.
These products are also attracting new customers who might not otherwise consider owning a timeshare. Some of these buyers are looking for a better way to enjoy their vacations and not have to worry about maintenance fees or other expenses.
The timeshare industry is still dominated by independent developers, who account for seventy-five percent of sales, but the top brands are growing in size and strength. They have brought a degree of credibility and innovation to the industry that was lacking in the past.
There are two primary models for timeshare ownership: fixed weeks and rotating weeks (often mislabeled as flex weeks). Fixed weeks were the original model, allowing owners to select a specific week at the same resort each year, sometimes based on the high season, other times based on the low season.
Rotating weeks are now the most popular model, offering more flexibility for vacationers. These are usually sold as a right to use (RTU) contract, which gives the buyer rights for a fixed period of time, but when that time period expires, the owner returns their week back to the resort.
RTU contracts can last 30 to 99 years, depending on the resort and the agreement. In most cases, these contracts are deeded to the resort, but many of them can also be resold to third parties, such as other timeshare owners or exchange companies.
The resale market is a tricky business and owners are often left taking a loss on their purchases. In addition, they can be difficult to sell when they no longer wish to own a timeshare.