Apart from the requirement to pay annual maintenance fees, that only ever seem to go up; the other massive complaint is the sales methods used by timeshare developers and their sales teams. Too much pressure, too much time, too many lies are some of the main grievances. The pattern of these complaints hasn’t changed over the years, so why do sales directors still utilise methods that are patently annoying their prospective clients and as we will see later, don’t seem to be working anymore.
From our point of view the timeshare concept is in dire need of a full overhaul, in the past the product has had many tweaks but despite these, timeshare fundamentally remains the same. You’re expected to pay a large sum to get in, you have a contract that in some cases lasts 50 years or more and you can expect high and rising annual maintenance fees, then when you decide it’s time to quit it proves extremely difficult to get out of.
Sales methods
Turning to sales methods, we have already mentioned this is a major complaint levelled by consumers, however, if these supposed “tried and tested” methods really work, then the sales management and reps don’t need to change, or do they? Developers are quick to publish figures extolling the monetary value of their new timeshare sales, which on the surface look really impressive, but if you dig deeper cracks appear.
Diamond resorts recently published their second quarter 2021 results and as expected there are a whole host of telephone numbers relating to the volume of sales. Contained within the report was a graph showing Key Performance Indicators (KPIs) which we found of particular interest because it paints an entirely different picture of sales successes. Below we publish the said graph; we will then take a closer look:
Firstly we need to explain the jargon:
- Tours – This is resort speak for the number of timeshare sales presentations.
- Close Rate – This is the percentage of “prospects” that purchased timeshare.
- Average Transaction Size – Pretty well self explanatory.
- Volume Per Guest – Average calculated by dividing the total sales by the number of tours.
Simply looking at Q2 2021, 47,882 people sat through a sales presentation. Out of these only 17.6% actually purchased, that’s 8,427 meaning that 39,455 people were “toured” but decided not to buy, that figure alone speaks volumes.
We fail to see why a 17.6% closing rate is so low, why if the product is that good and so desirable didn’t more people buy? Bearing in mind the “prospects” are financially qualified before being invited to take a tour, so it can’t all be down to affordability. Maybe it’s down to sales methods, or seeing through a product that has basically gone past its sell by date or a combination of both.
According to the graph, those that did purchase spent an average of $25,696 (£19,000) each, but using the Volume Per Guest maths it means that diluting this by those who didn’t buy represents an average spend of just $4,517 (£3,342). This doesn’t even cover the marketing costs.
Our thoughts
We can only assume the 39 odd thousand that chose not to buy didn’t go through many hours of hell just to get a free gift. We must also assume that those very same people actually do go on holiday which is maybe why they were exploring a different way to holiday. Either way 82.4% decided not to buy a timeshare with Diamond.
The USA is the timeshare capital of the world. Overall the population of the states is estimated at 328 million. The American Resort Development Association (ARDA) proudly professes that there are 9.6 million timeshare owners in the states, impressive but the reality is that only 2.9% of the entire population own a timeshare.
The Future
We go back to what we said earlier, the product needs to be redesigned to reflect current holiday makers’ requirements. Honest presentations of the facts, features and benefits in a timeframe acceptable to those attending a presentation. This is what it is, this is what it does and this is what it costs. Could this possibly increase sales, maybe but we fear this will never happen.
Both the timeshare concept and the archaic sales methods have existed for over five decades but as far as timeshare developers are concerned “if it ain’t broke, don’t fix it” this mind set seems to be alive and well and living in timeshare land, or is it cloud cuckoo land.
When it’s considered that the majority of timeshare resorts are accessible through the various online platforms, why would anyone pay in excess of $25,000 (£18,300) to buy a flawed, expensive and long term product?
Speaking of online platforms, Glenn Fogel, CEO of Booking.com commented on the lacklustre year that was 2020, he stated:
“Despite this travellers still booked 355 million room nights through our platforms during 2020, and we remained profitable by generating approximately $880 million”
$880 million only relates to the profit created by the commission earned, not the actual value of the holidays booked. 355 million room nights represents nearly 51 million weeks. It’s our guess that the timeshare industry must be very jealous of these figures. Fogel went onto say:
“Even though 2020 represented a 55% decline in bookings over 2019 it still represented gross travel bookings for the year valued at $35.4 billion.”
At this point, we rest our case.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk