At Finn Law Group, our team tends to look at the timeshare industry through the lens of consumer protection and advocacy, but there are many other sides and outlooks on the industry that often fall just outside of our scope. What’s interesting is how often multiple perspectives all come down to focusing on some of the same core, consumer-focused issues.
For a case in point, we encourage you to give a read to Robert Shaw’s great piece at stock market site Seeking Alpha,“Does Timeshare Need a New Act to Attract Millennial Buyers,” which addresses the industry from an outside investor’s perspective.
In the lengthy piece, Shaw looks at the financial future of the timeshare industry and concludes that, to sustain growth, “timeshare companies need to look to new, younger buyers,” rather than relying, as they tend to now, on existing timeshare owners, who are primarily “baby boomers,” according to research from ARDA (the American Resort Development Association).
But how will the industry appeal to the skeptical millennials it needs to thrive? As Shaw writes, the answer comes down to “changing how the product is sold and lowering the price of the product.”
Drawing from an ARDA blog post, “What Next-Gen Wants,” Shaw points to four primary factors that, as the ARDA writers put it, “account for more than half of all decisions made among both Millennials and Generation X’ers when it comes to purchasing a timeshare property.” Those factors are:
1.) Commitment/Cost Balance
2.) Sleeping Capacity
4.) Exit Strategies
These factors encompass many of the issues that we most consistently see brought up in complaints about the timeshare industry. Consumers chafe against the intensity and inconvenience of the industry’s marketing tactics, and, as Shaw notes, “one of the major complaints of timeshare ownership is that it is overpriced and there is no appreciated value in the real estate. In addition, when it no longer fits their lifestyle, it cannot be sold for anything less than pennies on the dollar.”
What does this tell us? Taking a fresh look at industry best practices won’t just be in the best interest of consumers, but will be essential for the long-term health and viability of the resort companies themselves, who need a fresh pool of new entrants to the market, since, ultimately, “tapping into existing owners has a limit, if not simply age.”
Cultural, industry-wide shifts toward transparency, lower costs, greater flexibility, and a healthy aftermarket will be essential, Shaw posits, in order to “create more perceived value for the next generation.” Resort companies and their investors benefit by having a fresh pool of consumers willing to buy in, and those consumers, in turn, benefit, by facing a kinder, gentler, more consumer-friendly timeshare model. Win-win, right?
For more of Shaw’s thoughts on the shared vacation industry and its outlook for investors – including some fascinating writing on how resort companies can slash operational costs by switching to more high-tech systems – check out the full piece at Seeking Alpha.