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   Market Still Going Strong

Timeshare Resale Market Keep Industry Afloat

Last month our Timeshare Industry Update noted that despite a downturning economy, the timeshare industry remains strong and has experienced only growth in the last decade. A new study by the American Resort Development Association (and prepared by Ernst and Young LLP) showed that, indeed, sales of new timeshares increased by 6 percent in 2007, totaling $10.6 billion domestically. Although this is not as wide a gain as has been seen in previous years, it still leaves us with a mystery: how can timeshares keep selling?

"The continued growth of the timeshare industry in today's economy is a direct indication of strong consumer satisfaction and demand," says Howard Nusbaum, ARDA president and CEO. "Vacation ownership, with its flexibility and spacious accommodations, continues to be a preferred travel choice for American families."

But the companies who buy the timeshares from dissatisfied and resell them for a fraction of their original price tell a different story. Despite the the fact that hard numbers on timeshare resales are impossible to calculate, it is estimated that this sub-market represents a steadily growing chunk of the larger timeshare behemoth alive in America today.

These companies do a great deal of business over the internet as well, which is equally difficult to track with accuracy. In 2005, only 7.2 percent of buyers purchased a previously-owned timeshare, according to the ARDA. This may seem miniscule, but this proportion totals in the hundreds of millions of dollars, and resales are estimated to have increased exponentially since then.

As the owner of one resale company put it, "[We had roughly] a 22 percent increase over last year at this time. In 2007, we presented $274 million dollars in offers to timeshare owners for the purchase or rental of their timeshares, which tells you that people not only enjoy timeshares, but they especially enjoy buying them at the resale price."

Quotations found in "Timeshare Sales Up Despite Economy" by Timeshares Daily Staff, Copyright 2008