The Timeshare Sector's Rebirth
Over the past two years, the economic depression has had an undeniable negative effect on the tourism industry. But nonetheless, experts maintain that despite tougher times, the timeshare segment of the industry was able to endure the market collapse better than expected.
Although significant drop in sales was experienced by the timeshare industry in 2008 and 2009, many developers point out that this was part of a strategy (purposely reduced sales) whose aim was to maintain cash flow in the face of the severing credit market condition. Not being able to paralyze timeshare development, the higher default rate among timeshare owners and the growing number of owners seeking relief from their obligations over the past years was rather expected given the prepaid nature of the program. In a weakening economy, renting vacation units in timeshare resorts became a widely-accepted alternative to costly hotel vacations and provided a significant amount of relief to timeshare owners who are in dismal economic straits.
Naturally, reduced consumer spending affects vacationers too, although this is perhaps one of the reasons why timeshare industry was able to resist the economic downturn since vacationers became inclined to use timeshare units (owned or rented) as an alternative to expensive hotel vacations. Rising fuel prices also had effect (negative or positive) on the industry as it influenced many vacationers to go for closer destinations.
Despite the prediction of ARDA's Chief Executive Officer, Howard Nusbaum, that timeshare sales will most likely remain flat in 2010, new resorts continue to be built, especially by larger developers. In fact several U.S timeshare properties are set for opening this year, together with many others in popular destinations like Mexico, China, and parts of Europe. One good example is Wyndham Worldwide Corporation’s launching of Wyndham Vacation Resorts at National Harbor, the timeshare chain’s first resort in Maryland, in February. The development’s location conforms to the new trend among timeshare owners to stay in urban areas inside the country. To date, more than 75% of the eleven-story property’s 250 units have already been sold.
Further, hospitality titan Marriott launched a new timeshare property in Florida, Marriott’s Oceana Palms located in Palm Beach County, on January 15, 2010. To date, the development has one 19-story tower composed of 75 units, with more to be added. Once completed, the resort should have a total of 169 units.
With experts believing that the US economy is starting to slowly recover, so too will timeshare get back on its feet. Although the timeshare industry was slow to feel the effects of the economic depression in the country, it should not take long for it benefit from the improving economic situation.
Source: Free Articles from ArticlesFactory.com
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