The timeshare industry is an increasingly lucrative and profitable segment of the vacation ownership (timeshare) market. The growing number of vacationers, increasing spending on travel and hospitality sectors and favorable demographics are some of the reasons for this growth.
Historically, the timeshare industry has been a very stable and profitable sector for resort operators. It has also proven itself to be a serious and growing economic catalyst for communities around resorts.
However, the current state of the timeshare industry has its share of challenges. First, the industry faces a serious threat from secondary markets for timeshare units. This is a major concern for timeshare companies such as Wyndham Destinations, Hilton Grand Vacations and Marriott Vacations Worldwide Corporation (VAC) because it poses an existential risk to their business model and ability to generate profits.
Another key issue is that the industry has not been able to fully overcome the problem of high maintenance costs. These costs have not been able to be offset by any substantial decline in occupancy rates.
As a result, the annual cost of maintaining the timeshares is very high and the owners are forced to reduce their spending on vacations.
This has led to the development of a large resale industry. These resale businesses offer buyers the opportunity to buy or sell timeshare units for less than their original purchase price.
These resale businesses are based on the fact that there is a great demand for timeshare units, and there are not enough new owners to purchase these units in the marketplace.
The industry is also reliant on expensive marketing efforts. This is the biggest expense that timeshare resorts must cover and accounts for a significant portion of the overall timeshare price.
In addition to this, the resale market is becoming more and more competitive with other types of accommodation providers such as hotels, vacation homes, holiday apartments, and resorts.
Despite these challenges, the industry is still growing at a rapid rate and is projected to grow at an average of 6% per year during the forecast period. In the United States, this industry is estimated to generate over $10 billion in revenues annually.
This is expected to increase significantly in the coming years as more people travel and spend money on vacations.
It is also expected that the growth of the tourism and vacation ownership (timeshare) industry will be primarily driven by the increase in international travelers. The growth in international travel is mainly fueled by the growing trend of travelling abroad for both business and pleasure.
While it is anticipated that the industry will continue to grow at an average rate over the coming years, the resale market may experience some challenges in the future. This will likely limit the growth of the industry and may cause some resale companies to go under or disappear altogether.
The tourism and vacation ownership (timeshare) market have seen considerable growth after the pandemic. The recent trends of international travel, favorable demographics and technological advancements have all contributed to the growth of the market.