Vacation Timeshares Plunge at Record Pace as Americans Scale Back Spending

[marmar]

Vacation Timeshares Drop at Record Pace as Americans Cut Back
By Nadja Brandt


Sept. 29 (Bloomberg) -- U.S. vacation timeshare sales may fall the most this year since the industry gained popularity in the 1970s as consumers forgo spending to ride out the recession.

Sales may drop 30 percent this year from 2008, said Howard Nusbaum, president and chief executive officer of the American Resort Development Association, a Washington-based trade group. The market “will be a challenge for at least the next 18 months,” Patrick Scholes, senior equity research analyst at FBR Capital Markets & Co. said this month.

“Timeshares are just very, very discretionary items,” said Chris Woronka, an analyst at Deutsche Bank Securities in New York. “It’s the perpetual vacation. I am prepaying for the ability to take a vacation every year. Under the current circumstances, people are more reluctant to pay for that.”

U.S. timeshare sales dropped 8.5 percent last year to $9.7 billion from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs, according to an Ernst & Young LLP study prepared for ARDA. The decline was the industry’s first since 1975 and is being driven by tighter credit, a higher personal savings rate and the loss of 6.9 million jobs since the recession started in December 2007. ............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601093&sid=axqN.SR9bsRs

[ddeclue]

1. Welcome to Florida Economics 101!

:cry:

[SoCalDem]

2. I guess I never understood the whole timeshare thing..

Why pay monthly to "buy" a week somewhere? I know they have organizations that trade locations for your time, but why not just save so much a month, and then make reservations where you want to go...seems much simpler and probably a lot cheaper too:)

[safeinOhio]

3. I'm ready to vacation

Just bought a 15 foot travel trailer for $600.00. YeeHaw!

[Fire1]

4. It makes more sense if you buy it outright and pay maintenance

fees once a year.

[exboyfil]

5. The maintenance fees are often as much as it costs to

rent it for a week. In many cases a timeshare has no residual value. Timeshare companies have written in the right of first refusal on all offers to purchase to try to prop up the value.

I remember when I was a 20 something going to my first presentation. Boy was it exciting until they got to the price. It was more than half the cost of my house at the time for a week. I immediately backed away and said I wanted my free stuff (probably tickets to Disney for my wife and me). They immediately came in with the extra special offers etc... At that point I smelled a rat.

Since then I have gone to a bunch of timeshare presentations for the free stuff, but not for some time now. My time has become more valuable than the free stuff to me. They also get real snotty when I tell them I am not interested or can get the same timeshare for 10% of your asking price off the internet exchanges.

We have rented timeshares a few times (along with staying on property as part of the compensation for the tour). I like it, but I can't see being an owner. For the last few years we have gone with weekend trips locally to save money for the kid's college. Owning a timeshare would have obligated us to either go someplace expensive (airfare, food, and a car), try to rent it out, or eat the $600 annual maintenance fee.

[Fire1]

6. I've been coaxed into going for those presentations but

always turned them down. NOTHING could ever beat the deal I stumbled into almost ten years ago. We bought when timeshares were at their lowest value for the prime summer season and watched the resort update and renovate every year. The timeshare is in the western part of the state and we live in the southeastern part. So, getting there is really not a big deal. I'll wait out the market and sell for three times what I paid for it or hand it down to my son.

[exboyfil]

7. Good deal for you

The fact that you can get to it easily is a real selling point. For a family of four it costs $1000 to even get to Florida. If you can jump in the car and get there on a tank of gas it makes for a wonderful vacation.

Way to go in not paying retail.