Regular readers of our blog are probably familiar with ARDA, or the American Resort Developer’s Association, the political voice and lobbying arm of the timeshare industry.
Earlier this spring, ARDA held its regular ARDA World conference, the largest gathering of timeshare developers in the world. Jeff Weir, timeshare expert and chief correspondent for RedWeek, was able to attend this enormous soiree in person, as he recently detailed in an “Ask RedWeek” column.
We think it’s important to highlight some of the findings that Weir took away from this massive networking and educational event. In particular, we found our attention piqued by Weir’s account of one educational panel, dubbed “The Effects of Buyer Regret on Rescission: Recognizing, Revealing and Rectifying Regret,” which was led by Dr. Amy Gregory, an assistant professor at the University of Central Florida Rosen College of Hospitality Management, whose research focuses on “Vacation Ownership, Revenue Management, and Conjoint Analysis,” according to her website, Timeshare Education.
Dr. Gregory’s findings are staggering. Let’s look at some of the ones that Weir highlights:
- The average rescission rate is 15% – essentially identical to the daily average percentage of people who buy a timeshare following a sales presentation
- 85% of all buyers regret their purchase, citing reasons including money, fear, confusion, intimidation, and distrust
- 41% of buyers never thought they would regret their purchase, but ended up doing so; 30% were neutral prior to buying, but came to regret their decision
- 95% of all buyers go back to their resort and sales team for more information after the sale, usually within one to three days, seeking more information about maintenance fees, resale options, and pricing alternatives
In an interview with Weir after her presentation, Dr. Gregory also expanded on some important “regret-and-remorse” factors that drive timeshare buyers toward rescission. First, she cites the “price tag” as a big factor that inspires remorse, which is particularly telling when you consider that, according to research presented at this year’s ARDA World, the average price of a new timeshare is $20,040. Dr. Gregory also suggests that “intervening factors” play a huge role in persuading customers to cancel a purchase; in the case of timeshares, these factors include “negative feedback from a friend, finding conflicting information about timeshares on the Internet, frustration navigating company websites, or mixed messages from other sales personnel.”
Broadly speaking, Dr. Gregory’s findings provide concrete examples for what those of us who work with the timeshare industry have long known. Her information, for instance, reaffirms our belief that timeshare sales presentations, while effective at securing a closing, do not provide all of the information that a consumer really needs to make a confident, educated purchasing decision. Her research, too, singles out many of the same factors that our clients have come to us complaining about, including daunting maintenance fees and the anemic nature of the secondary market.
And, finally, Dr. Gregory’s report confirms our belief that the industry’s culture of unfriendly consumer practices will ultimately only result in the timeshare business “eating its young.” As Weir points out, getting a handle on “regret-and-remorse” could greatly benefit the developers themselves, who are losing value with each cancelled sale; as he notes, “if the industry reaches $10 billion in annual sales, that means an additional $1.5 billion in sales were cancelled.”
And don’t forget the consumer! Adopting a more open, forthright, and affordable approach to every aspect of the timeshare purchasing process will benefit buyers as well. As Dr. Gregory tells Weir, “from a buyer’s perspective, it will be a positive outcome if we can alleviate some of their regret at time of purchase.”
For more fascinating findings from the ARDA World event, we encourage you to read Mr. Weir’s full article for RedWeek here.
Have any questions or concerns? Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.