New Sales of Timeshares Were Flat for 2010 June 14, 2011
Posted by John Stephens in : ARDA, News & Events , trackbackThis is where you find out if you’re a “glass half empty” or “glass half full” type of person when it comes to the state of the timeshare industry.
First, the facts. According to a report in the Orlando Sentinel, the American Resort Development Association (ARDA) has released industry sales figures for 2010 which indicate that sales of new timeshare products edged up ever so slightly – to $6.4 billion in 2010 from $6.3 billion in 2009. Now, in some circles, $100 million would be a significant amount of money. But when you’re talking about the kind of cash that the timeshare industry had been raking in pre-recession, it’s more of a statistical bump than a growth spurt.
The figures, detailed in ARDA’s 2011 State of the Vacation Timeshare Industry report, are based on a survey of timeshare resorts, developers and management companies compiled by Ernst & Young on behalf of ARDA.
“The good news is we saw growth. It was modest, but we saw it mostly in the end of the year,” said Howard Nusbaum, president of ARDA, who told the Sentinel that the increase in sales is a positive indicator for 2011.
Now, the glass half full person will say that an increase, even if it’s only about 1.5%, is still an increase and good news as the industry continues to claw its way out of the economic downturn. The glass half empty person says these essentially flat statistics show that we’re still in the muck and struggling to make it, with little job creation or growth in sight. And both views would be correct.
When compared to the industry high water mark of $10.6 billion in sales in 2007, these numbers don’t measure up and show just how far the industry has fallen. However, these figures do show that the bleeding has stopped, revealing the first industry growth in three years.
Probably the most interesting fact reported is that the average sale price for a new timeshare week fell 5.7% to $19,308, the first time that the price has actually fallen since 2002. Occupancy rates also dipped, from 79% in 2009 to 78% last year.
The ARDA spin is that the industry is focusing on improved fundamentals and getting qualified buyers to tour resorts, according to the Sentinel. However, they also admit that the industry continues to cannibalize itself by worrying more about how to upgrade existing owners rather than bringing new owners into the market.
For example, in 2010, 45% of all timeshare sales involved people who already owned a timeshare with the same developer, up from 38% in 2009. At some stage, this strategy will backfire on developers as they cannot continue to go to the same well of owners and remain a viable sales product.
Many of you will say that, even at $19,308, the sale price for a new timeshare is still way too high. And you’d be right, which is why you’re looking into the timeshare resale market by coming to this website. New sale prices include an approximate 55% markup to cover the sales and marketing costs of the developers, which is why timeshare resales are so much lower in price. Like the pre-owned car market, these added costs don’t exist on the secondary market, which is why the prices are so good.
And that brings me to the main point of this topic – sales. Perhaps the real reason that industry sales are not as high is because of the effect of the internet over the last few years. Maybe it’s not just about the recession, but the fact that consumers are much wiser about the industry than they were in 2007 and the added transparency brought by the internet has removed the mask from the industry to reveal the real market value of the product, which is much closer to the resale price.
But you already knew this, or you wouldn’t be here reading this. So have fun browsing the resorts advertised on the BuyaTimeshare.com website for your next awesome timeshare vacation by clicking here.
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