Real Estate

Timeshare information shows system failures

It all depends on how you look at it. Whether you are looking from an industry perspective or a consumer perspective, the timeshare industry can present a very different look depending on your point of view.

Reading through Diamond Resorts’ second quarter financial report, it is clear that their initial public offering last month is having an impact on the way they present their message. From an industry perspective, it is a very optimistic outlook with the main indicators high. Total revenue, sales, rides generated, and price increased, which is a constant theme among timeshare developers from big brands during this reporting season.

The growth figures are impressive, but must be considered in light of recent acquisitions this year. Still, a 43 percent increase in total revenue is more than just a pocket change at a time when the global economy is booming.

Long live tourism! And the discretionary spending that it brings.

But from a consumer perspective, there are standard flash points that need to be checked and they have been a point of emphasis for years in this industry.

Diamond reported that the average transaction price rose nearly 30 percent to just over $ 16,000. Good news for the developer, bad news for the consumer. Your reasoning? Due to the sale of larger point packages and higher sales to new customers rather than existing owners.

So let me see if this is clear to me. Their sales increased because owners need to buy more points (whose monetary value Monopoly is arbitrarily determined by the developer) and because they can get away with new customers who don’t know the difference like existing owners.

Good … for the developer. For the consumer, not so much.

But this is not to say that the product is not worth it. The value of any product is determined by those who are willing to pay for it, and to be fair, its average price is about $ 4,000 less than the general average price for an industry-wide range. But there are better ways to buy than this.

Especially when you look at your selling and marketing expenses, the amount of overhead that went into generating that sale in the first place. Diamond says it’s 50.7 percent of the total price, and they applauded that it’s down from 57 percent at this time last year. Which means that of that price of $ 16,000, $ 8,000 will pay the expenses, which is your money.

Owners often wonder why timeshare prices on the resale market seem depressed, but this is the main reason. Think in terms of car sales – buying a new car covers marketing and commissions, and used cars are significantly lower on the resale market. The same goes for timeshares.

Again, this is not a hit to the developer, it’s just that there is a better way to buy timeshare than through the developer. And that’s online through sites like buyatimeshare.com. I saw a Diamond Resorts Cypress Pointe Grande Villas in Orlando right now for $ 7,000, but people need to know that the option exists and many don’t until they are already exposed to the product.

The good news for consumers is that Diamond only closes about 13 percent of its touring patrons, which means 87 percent leave the resort without shopping on the spot. Research backed by the American Resort Development Association not only shows that 32 percent of all timeshare sales occur through the resale channel (up from 17 percent in 2010), but the number of people attending sales presentations has decreased. This would indicate that those buyers, once they have gone on a tour, are looking for other channels of purchase than through the “just for today” atmosphere created at the resort.

Again, the more awareness you create about savings by buying timeshare on the resale market, the better.

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