The World of Timeshares
September 2010
One of the more interesting forms of tourism is what is often called the Timeshare. Timeshares are a form of tourism that fits in midway between a hotel/motel and outright ownership. In the timeshare system, a customer purchases an apartment or condominium for a specific period of time. Thus, the ownership may be considered to be more temporal than physical. First pioneered in Europe during the 1960s, the timeshare industry has spread across the world with a plurality of these now being in the USA. Many tourism locations like the idea of timesharing. They produce a steady stream of visitors and the location is assured that customers have a high probability of returning. A number of large tourism hoteliers and corporations have developed timeshare properties. There are also variations within the timeshare industry. For example three common forms of timeshares are:
- “Fixed Timeshares” is the classical timeshare system in which the timeshare owner controls the “property” for a specific week during the year as defined by a contract.
- Rotating weeks produce a system in which the owner’s week may rotate throughout a season or a year.
- Floating weeks are ones in which timeshare owners “compete” for times each year. In this system the timeshare owner has a greater potential to change his/her vacation time on a yearly basis
- Vacation clubs and points programs are a system in which the members share timeshares in a multitude of locations and have the option to go (depending on availability and points) to any location within the system
Other tourism locations have begun to wonder if timeshare is all benefits without other costs. Timesharing then has both costs and benefits. Here are just a few of the many things that need to be considered regarding timeshares.
Some of the disadvantages of timeshare:
- They often do not produce a bed (hotel) tax. This means that tourism industries that depend on revenue from room taxes, now must service people who are not paying taxes to a tourism entity such as a CVB or tourism office.
- Potential for poor security. Because timeshares are technically private property, there is no way to assure that doors are not left open, keys are controlled or the property is not being used for some illegal purpose.
- Lack of overall property control. In most cases, timeshare property owners can sublease their property to others, give the timeshare as a gift to another person, or trade with a timeshare customer/owner at another location. While this mobility provides great advantages to the timeshare owner, it produces further security challenges for the property manager.
- Many timeshares come with fully equipped kitchens, thus limiting restaurant usage. This means that timeshare owners may choose not to frequent local restaurants. Also as timeshare owners may be repeat visitors on a regular basis, the chance that they will spend a great deal of money on souvenirs is highly reduced.
Some of the advantages of timeshares are:
- Advantages for the timeshare holder may become disadvantages for the community. For example timeshares provide owners with limited costs and expenses associated with ownership such as taxes and insurance and a person’s stake in the property can be bought or sold by the owner, the ability to rent out the property without the controls normally associated with a hotel. While all of these apparent advantages can be of help to the timeshare buyer, they may create multiple downturns in the local tourism industry.
Among the advantages of timesharing for a local community.
- Customers are forced to use their vacation period or lose it. That means that not only is the patron forced to take a vacation each year, but also the local community has a pretty good idea as to how many people to expect in the area.
- Timeshares may attract a great number of visitors. Many timeshares come with at least two bedrooms. These are ideal for young families or couples traveling together. Many of these people might not visit a particular locale were it not for the opportunities afforded them by the timeshare experience.
- Timeshare may be a way to get people to know your location who would otherwise have not come. Because timeshare owners feel an obligation to justify their purchase, they have a tendency to speak well of their properties and as such become walking advertisements for the local community.
- Timeshares produce jobs for the local population. Timeshares often arise in locations that might not be able to afford full service hotels. They also can be combined with a hotel to assure a regular cash flow in places where hotels may suffer from levels of seasonality challenges.
How much is too much?
Each community will have to decide for itself how to take advantage of a timeshare program. Here are at least a few things to conside:
- See the timeshare owners as on-going tourists. That means provide them with updated information regarding eating establishments, attractions, transportation, and weather conditions.
- Encourage the local police department to meet with the timeshare office on a regular basis. Because timeshares owners are constantly in motion, they often feel as if they are locals but act as if they are visitors. Your local tourism security police unit (TOPPs) along with your local fire marshals should meet with the administration and produce a series of safety and security literature that should be placed in each unit.
- Make sure to list the local CVB/Tourism office telephone numbers and when the office is open to the public. Just because these people are not paying a room tax does not mean that they do not add to the local economy. Market to them, make sure that they are aware of local events occurring while they are in your community and encourage them to become part of your on-going email distribution lists.
