Posted on March 05, 2021
Timing is everything when it comes to selling real estate. For instance, try selling commercial real estate to companies in the current COVID climate when vast number of employees continue to work from home. On the other hand, home sellers in Florida are sifting through multiple offers as people flock from the north to the Sunshine State. But when it comes to timeshares, is now the best time to sell a timeshare?
Because timeshare is essentially a travel product and the industry does not exist in a vacuum, it is important to view the potential for timeshare vacations considering what is happening in the overall travel industry.
It is impossible to look at travel without considering the effect COVID has had on travel patterns and tourism-relates facilities. Now that vaccines are being applied to millions of Americans, consumer confidence is lifting toward a return to more normal vacations.
COVID infections and hospitalizations have dropped consistently in the U.S. since early January, with even the Washington Post reluctantly admitting this. According to the Post, daily cases dropped about 74 percent between January 12 and February 15, with numbers continuing to slide since mid-February. CDC numbers show that the daily cases dropped from a high of about 248,000 per day on January 12 to the current total of 62,500 as of March 3.
These dropping numbers continue to give travelers confidence that the summer travel season will be as normal as it can be, with the Biden Administration recently announcing that every American asking for a vaccine shot will be able to get one by May. All of this is good news for the timeshare industry as vacationers look to the qualities and benefits that make timeshare accommodation so attractive to travelers.
Assessing trends can be tricky in our current environment, when even a slight COVID hotspot can induce lockdowns. But the good news is that momentum seems to be building toward decent, if not outright optimistic, vacation trends in the short and medium term.
The U.S. Travel Association reports record highs in travel optimism among Americans, with 56 percent of people excited to travel in the near term and 60 percent showing a readiness to travel. Even more important in the current climate, 54 percent of Americans perceive travel activities as safe, which reflects the impact the industry’s safety efforts have had on vacationers.
As travel pertains to timeshare, one major advantage that the timeshare industry has on its hotel counterparts is the pre-paid nature of timeshare vacations. Most owners pay their maintenance fees at the start of the year, meaning they are already invested in taking a vacation this year.
Timeshare industry occupancy figures reinforce this fact. Last summer, Wyndham timeshare resorts showed a 77 percent occupancy rate over the Labor Day weekend and Bluegreen timeshares posted rates over 60 percent going back to last June. Meanwhile, last July hotels were hovering around 47 percent.
This shows the consistency of timeshare owners to take vacations even in the midst of uncertainty, as similar trends also emerged following the 9/11 attacks and the 2008 financial meltdown.
The result is that timeshare resorts are committed to welcoming their owners and this bodes very well for owners looking to sell, since prospective buyers are looking for safe vacation accommodations with trusted brands that they know will be maintained and kept clean. Safety and cleanliness have emerged as a major factor, which is one of the reasons outlets such as Airbnb are scrambling since they have trouble guaranteeing the heightened safety protocols necessary in today’s market.
Every one of the major brands have released increased safety measures to put their owners at ease, with programs such as Hilton Clean Stay, Wyndham’s Vacation Ready and Diamond’s Standard of Clean initiatives. Given that timeshares also feature kitchens where families can prepare their own healthy meals, this is a major advantage for sellers to highlight.
Most of the U.S. is just now limping into Spring following a difficult Winter – with some areas reeling from the effects of the record cold front that knocked out power to millions in the south. Most Americans were already feeling the effects of pent-up demand for taking a vacation due to the COVID restrictions of the past 12 months. Add in the impact of Winter and millions of people can’t wait to get to their favorite vacation destination.
To highlight this point, Trivago just released a travel survey revealing that 38 percent of Americans would give up sex for a year if they could take a vacation now. As many as 25 percent would give up all of their savings to travel and 50 percent would leave their jobs in order to vacation.
Keep in mind that it is a lot easier to respond to an anonymous survey than it is to actually carry out any of these actions, but the point is that people would even consider these actions in order to go on a trip.
Now is the time many families start planning for their summer vacations. According to Google Trends, vacation-related searches are now at their highest point since last June when many vacation destinations such as Florida were emerging from business shutdowns.
With these families looking ahead to summer, timeshare sellers would be wise to take advantage of the uptick in demand to get their timeshare out in front of potential buyers.
Like any industry, there are always opportunists waiting in the wings to pick up bargains during a down market. It happens with the stock market, real estate market and even the automotive industry as prices drop to meet demand.
With timeshares, there are owners looking for deals to increase their existing portfolio, whether adding points to their current allotment or purchasing a week to add to their existing week. Some owners have been known to look up the person who has the week either right before or right after their existing week of ownership and offer to buy so they can extend their vacation time.
For sellers, the timeshare resale market has always featured lower prices because of the nature of the product. Similar to the auto industry, the product is considered a use product which drops in value once purchased from the resort because of the marketing and sales costs included in the resort price. Those costs can add up to 50-60 percent of the overall price of a timeshare sold at the resort, so removing those costs will give a seller a better starting point for pricing their timeshare on the resale market.
This resale dynamic actually helps sellers in a down market because the resale prices usually remain consistent regardless of the economy. Rarely do resale prices fluctuate in response to economic conditions, so the issue is not one of pricing but whether there are consumers looking for timeshares.
Even with the unprecedented nature of the pandemic we have seen buyers purchasing timeshares. As a licensed brokerage with agents working on commission, we are still going strong a year after the pandemic first hit so we wouldn’t be able to survive without buyers looking for timeshares.
The short answer is yes. Because of the extreme variety of timeshare products and programs, the level of buyer activity can be diverse depending on variables such as asking price, week or season of ownership, type of ownership and size/type of unit.
Our platform fielded just under 80,000 offers placed from buyers last year even in the midst of the pandemic. Demand has picked up this year and we’ve hired more agents to keep up. With the momentum building, and for reasons already stated, we are optimistic that activity will only increase as we make our way through Spring.
For owners, it is a good time to think about selling and we can provide a no-obligation consultation to answer questions. Keep in mind that in most states a licensed agent is the only one who can legally price a timeshare on the resale market apart from the owner or the resort, so it makes sense to contact us to get an idea of what your timeshare is worth.
Give us a call on 877-624-6889 or reach out through our Contact Us page and we’ll be happy to discuss your situation with you.