Consumer Advocacy
Orlando Area Timeshare Resale Market in Shambles
While most timeshare experts will tell you that vacation properties are not a wise investment of any kind, consumers continue to be taken in by sales representatives with big promises. The city of Orlando has one of the oldest and largest timeshare circuits in the United States – but some buyers are feeling remorse over purchases that continue to cost them money.
Two timeshare owners, Pete and Sharon Bissinger, were interviewed in an Orlando Sentinel article. They enjoyed their Kissimmee property for 15 years before deciding to sell, and the difficulty quickly tainted their fond memories of the vacation spot. "We found that it was nearly impossible to find a buyer," said Peter Bissinger, "People wanted $395 and more just to list the time share on the Internet. And when we paid, we never heard from anybody again."
This bait-and-switch tactic has sadly become the norm in today's timeshare resale market, with magnates such as Wayne Stroman (link) and the Royal Holiday Club (link) making lofty claims (and asking high upfront fees) their actions fail to make good on. The president of the American Resort Development Association, Howard Nusbaum, has even gone so far to compare timeshare resales with the oft-parodied used car market of the American 1960s.
"The secondary market for time shares is where the auto industry was 40 years ago," Nusbaum said. "I think the problem is that people confuse this product with other real-estate products. [But] this is a use product. It's like a car: It depreciates." In fact, timeshares depreciate so rapidly and so intensely that very few owners have been able to break even on their investments, let alone earn a profit. The Bissingers, after attempting several other escape routes, deeded the property back to the timeshare company at no cost. And even this cutting of losses is a "luxury" offered to few timeshare owners with ironclad contracts.
The truth is that timeshare developers are more concerned with selling new properties than with managing old, pre-owned ones – simply because the profit margins are much higher on "new" units, and resales often offer unwanted competition. Buying a timeshare directly from a developer or resort company means paying astronomical mark-ups; partly the result of overhead from "free weekend getaway" deals and expensive sales presentations, but supply and demand (as well as, arguably, greed) play into the equation as well. There exists a vast market for new timeshares today, considering that families often aren't comfortable venturing into the shadowy territory of resales. Some timeshares are also purchased on impulse during the execution of high-pressure, predatory sales tactics. And, as the Orlando Sentinel suggests, some consumers just simply aren't aware of the hazards involved.
Some executives of timeshare companies, such as David Siegel of Westgate Resorts, claim that they always offer a caveat to new customers about the difficulties of reselling. Unsurprisingly, Westgate does not take back the deeds of unwanted timeshares and has no official resale program. "It's a conflict for developers, because they have their own inventory to sell," Siegel claims. "We tell owners that it is not an investment, and that they are really prepaying their vacation. We tell people, 'we won't sell it for you and we won't rent it for you'." He adds, "But if they have to sell, we say go to friends or neighbors or advertise it in the paper."
Of course, seldom is the case where any of those solutions have proved an adequate resale strategy. And most individuals would probably feel awkward "selling" unwanted property to their friends and neighbors. But some Orlando timeshare owners have traveled so near to the end of their rope that these suggestions no doubt sound viable. Meanwhile, timeshare companies continue to dismiss the dangers of their wares.
"Resales are a byproduct of the industry," says Marriott Vacation Club spokesman Ed Kinney. "People have products that don't fit their needs. We know that."
Quotes from "Resale woes leave Orlando-area time-share owners in limbo" by Christopher Boyd, published in the Orlando Sentinel, December 17, 2007.
