The Timeshare Concept
The timeshare industry is over 60 years old and, according to statistics released by the ARDA International Foundation in 2016, generates revenues of over $19 billion per annum in sales and $57 billion in economic output. There are 22 million timeshare owners worldwide, of whom some one and a half million reside in Europe alone. Yet few realise what timeshare is and the extent of its contribution to the economies of Europe and to providing year-round tourism and employment.
Timeshare provides holidaymakers with a unique combination of consistency and choice. Consistency, in that holidaymakers can purchase the rights to their preferred holiday resort into the future. Choice, in that these rights can be exchanged, through international exchange companies, for other high-quality holiday resorts around the world or through the advent of points based timeshare clubs, which offer a great degree of flexibility.
The Timeshare Industry
The timeshare concept began in Europe in the 1960s as an innovative way to increase holiday choice. Instead of booking a week or two at a resort every year or purchasing a holiday property outright, timeshare offers holidaymakers the ability to buy rights of occupancy at a property, typically in multiples of one week, for either a set period or in perpetuity. It puts a holiday home within the reach of millions who could never afford to buy a property.
Once consumers have purchased their holiday time, they can either use it themselves, pass it to friends or relatives, or rent it out.
The Exchange System
The exchange system allows owners to exchange their timeshare week for either another week at the same resort or for a week in another resort within the exchange network in over 120 countries around the world. Exchange companies often provide their members with associated services – flights, car rental, insurance etc – at competitive prices.
Points Systems
The popularity of exchange led to a new flexible product whereby consumers buy points instead of a slot in a particular resort. These points then act as a holiday currency. Each time the consumer wants to take a holiday, they choose the size of apartment, duration and location they want and pay accordingly from their allocation of points.
Timeshare in the 21st Century
Timeshare has come a long way since the first resort was developed in the 1960s and is now a robust industry that provides millions of people with quality holidays each year. With over 1300 resorts in EMEA (Europe, Middle East and Africa) and one and a half million owners, the ARDA International Foundation report of 2016 indicates that it generates $10.6 billion in direct economic output annually. And with high occupancy levels, averaging at 76% year round, the industry is an important contributor to economies in parts of Europe that traditionally suffer from high unemployment.
High End Products – As the needs and aspiration of buyers has evolved over the years, so has the industry and vacation ownership, as it is called, now includes high-end concepts such as fractional ownership, condo hotels and destination clubs. These developments, which are marketed to high net worth individuals, frequently include services such as 24-hour concierge service, airport lounge access and a personalised travel service.
Fractional Products – There has also been a rise in the development of fractional properties for those whose pockets are not so deep and this is proving to be a successful concept for RDO members, some of whom have moved away from traditional timeshare sales to focus on this market.
Short Term Ownership – It is no surprise that today’s buyers have less of an appetite for the long-term ownership that appealed to their parents’ generation and the industry has responded to this by developing short-term ownerships, typically of a five to ten year duration. Buyers then have access to quality accommodation around the world.